Vietnam’s goal by 2030 is to have two million businesses: a matter of quantity and quality again!

Vietnam has set a goal to have two million enterprises by 2030. Head of the Central Economic Commission – Tran Tuan Anh said the above information when working with the business community on “building and promoting the role of Vietnamese businessmen in the period of accelerating industrialization, modernization, and international integration” on September 15, 2022.

Although Vietnam’s goal of having one million enterprises by 2020 has not been achieved… the Central Economic Commission still sets a target that by 2030, it will try to have two million enterprises.

Dr. Le Dang Doanh, former director of the Central Institute for Economic Management from 1993 to 2002, when answering Radio Free Asia on September 16, said:

If by 2030, according to the World Bank’s assessment, Vietnam’s agriculture will still be about 18% to 20%. At this rate, Vietnam’s economy has not yet adapted to the requirements of a developed industrial economy.

Accordingly, the rate of agriculture must decrease below 10%, which means that Vietnam’s agriculture grows 1.6% to 1.8% each year, then industry and services must grow at a rate of about 16% to 19%. The new percentage can reduce the agricultural rate to less than 10% so that Vietnam can be recognized as an industrialized country by the world.”

Also at the meeting with the business community on September 15, Pham Tan Cong – Chairman of the Vietnam Federation of Trade and Industry said that Vietnam currently has 860,000 businesses, creating jobs for 14.7 million workers and contributing over 60% of GDP. This number is still far from Vietnam’s target of one million enterprises by 2020… could there be two million enterprises by 2030?

Economist Dr. Nguyen Huy Vu in Norway on September 16 said that Vietnam’s goal of having two million businesses is quite high:

By 2030, the population of Vietnam will be about 100 million and the number of people of working age will be about 50 million. With the target of two million businesses, that means an average of one business for 25 working-age people. That number is quite high but not impossible. What is more important is the quality of the business. The quality of the business determines the position of the economy and the standard of living of the people.”

But in order to improve the quality of businesses, according to economist Dr. Nguyen Huy Vu, the government needs to invest and reform a lot of things, from education, vocational training, science and technology, infrastructure, etc. financial system, and capital markets. Based on that, businesses will optimize operations and improve quality. Mr. Vu continued:

All these reforms require the ability to run the economy. But what has happened in the past few decades proves that the Communist Party’s ruling elite is incapable of implementing these reforms, and therefore the goal of the number of enterprises as well as the quality of enterprises. Businesses will also be promised with numbers on paper.”

Dr. Le Dang Doanh said that the ratio of enterprises per 1,000 people in Vietnam is currently too low, making it difficult to achieve the target by 2030. He cited:

If a country wants to have a high-income level, it must have about 24 businesses per 1,000 people. Compared to Hong Kong, where an 18-year-old can participate in between 1.4 and 2.8 businesses. Therefore, Vietnam needs improvement and help to increase the number of enterprises.

Currently, Vietnam has about five million household economic households and these households are considered informal economies, that is, they do not have to comply with the law on statistical accounting, receipts and vouchers, and flat tax payments. i.e. paying taxes on the basis of business owners negotiating with tax officials. People will easily negotiate with each other to benefit both sides, only the state budget will suffer. So Vietnam needs to upgrade five million households into businesses that can attract more workers and contribute more to society.”

In addition, according to Dr. Le Dang Doanh, not only the quantity, but the quality of enterprises is also very important. Because currently, Vietnamese enterprises are small and medium-sized, even very small, ie micro-economy, it is difficult for such enterprises to participate in integration. Mr. Doanh continued:

I would like to emphasize that Vietnam has a very correct policy of diversifying and multilateralizing international economic relations so as not to depend on any one partner. Vietnam has signed 15 free trade agreements and participated in many trade blocs in the region and around the world. Therefore, Vietnamese businesses can benefit a lot.

However, households that do not have the capacity to enter into contracts with international partners do not have the capacity to participate in international value chains.

Therefore, Mr. Doanh said that it is necessary to quickly upgrade the linkages of household businesses to become large enterprises, and too small businesses must also link together… in order to have sufficient capacity for international integration. economic.

Minister of Planning and Investment – Nguyen Chi Dung in March 2021 once said that state-owned enterprises must demonstrate the role of a key and key economic component. Meanwhile, there are currently 12 projects with trillions of losses under the Ministry of Industry and Trade, such as DAP Factory No. 1-Hai Phong; DAP No. 2-Lao Cai; Ninh Binh Fertilizer; Hebei Fertilizer; Dung Quat Shipbuilding Industry; Vietnam-China Steel Factory; Dinh Vu Factory; Thai Nguyen Iron and Steel Company… All 17 commercial banks and 1 financial company are providing credit for these 12 projects, with a total outstanding balance of nearly VND21 trillion ($900 million). In addition, banks also provide credit to related investors of nearly VND23 trillion dong.

Although there are still many state-owned economic groups operating inefficiently, Dr. Le Dang Doanh said that Vietnam has reduced the monopoly situation in the state-owned enterprises:

Currently, the number of state-owned monopoly enterprises has decreased significantly, for example, there are private aviation companies such as VietJet and Bamboo Airways, and a number of other fields have also been opened. However, the control of companies or monopolistic groups in Vietnam has not been fully regulated by law and the supervisory authority has not been promoted as expected.”

Therefore, according to Dr. Le Dang Doanh, in order to promote private enterprises, and help state-owned enterprises to develop higher and control monopoly, it is necessary to have a legal framework and supervision to control. monopoly control, fair competition, etc. on that basis can improve the efficiency of enterprises in Vietnam. (Translated)

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