Experts make suggestion for sustainable business development

At the forum on sustainable development of businesses for the community’s sake, held on December 11 in Hanoi, experts said that the majority of Vietnamese businesses have not set a clear vision and strategy towards sustainability. They have an ineffective corporate governance system and not built corporate culture.

According to the Institute for Brand and Competitiveness Strategy, Vietnam has seen a decline in the number of state-owned enterprises, accounting for 0.44 percent of the total number of businesses throughout the country in 2018.

However, the performance of state-owned enterprises has not met its potential, while competitiveness remains limited. The enterprises have not created momentum for economic growth nor played a leading role in the economy.

In addition, mechanisms and policies for non-state enterprises remain inconsistent and unclear, resulting in difficulties conducting administrative procedures. Most of them are small- and medium-sized enterprises, with limitations in terms of technological level, administration and financial capacity. In particular, the linkages among businesses remain loose and they do not meet requirements in order to participate in supply chains.

The number of foreign-invested enterprises is increasing due to the government’s attractive and preferential policies. They have made significant contributions and created motivation for economic growth. However, linkages are still missing between domestic businesses and FDI companies.

The Institute for Brand and Competitiveness Strategy has proposed to further promote restructuring of state-owned enterprises toward equitization and sales of state-owned enterprises’ capital that the state does not need to keep or control, including those doing business effectively. In particular, it is necessary to have clear separation of state ownership and regulatory functions.

Non-state enterprises should continue to amend mechanisms and policies in a synchronized manner and cut red tape. Among the recommended steps are promoting the startup movement, supporting small- and medium-sized enterprises, and encouraging the formation and development of multi-ownership private economic groups.

The state needs to complete the next-generation FDI strategy and promote FDI attraction focusing on output quality and contributions to the domestic sectors. These include the value chain, added value, application, and transfer of high technology, as well as research and development and innovation.

Nguyen Anh Duong from the Central Institute for Economic Management (CIEM) proposed solutions for sustainable business development. Specifically, state management agencies need to study international practices on corporate social responsibility to integrate into Vietnam’s policy framework, and strengthen dialogue with businesses on regulations and practices that can affect sustainable development.

The business community needs to learn from experience on sustainable development associated with the international economic integration process.