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Lending a hand to enterprises to overcome difficulties
The government should take measures to stimulate consumption, support domestic market and reconsider tax policies to improve business environment.
According to a survey on the business environment in 2008 by the secretariat of the Business Forum, most enterprises were worried about business activity this year and have devised solutions to improve the business environment in the future.
2008: Enterprises meet difficulties
2008 was a challenging year for Vietnam’s economy. After the enormous growth in 2007, Vietnam’s economy has faced great challenges after the Doi Moi (Renewal) process and has encountered a lot of difficulties in the past year such as high inflation, trade deficits, unstable exchange rates, and the stock market downturn.
According to the survey, most enterprises are clearly aware of difficulties lying ahead and hope for a better environment next year. Enterprises said that high inflation is the main reason for the increase in bank interest rates. The sharp increase in borrowing costs and the price of raw materials has also affected Vietnamese enterprises and the demand of both local and international markets has decreased remarkably, directly affecting turnover and production activities. Currently, enterprises are focused on tapping available resources to maintain major business areas and traditional markets, reduce costs and narrow the scale of business operation. They also plan to improve the management work and training of human resources for long term development.
Solutions for the business environment
To improve the business environment in the next year, Vo Quoc Thang, President of the Ho Chi Minh City Young Entrepreneurs Association proposed that the government gather opinions from businesspeople when issuing macro-economic policies. It is also necessary to speed up the reform of administrative formalities.
Pham Thi Loan, chairwoman of the Hanoi Businesswomen’s Association, said that it is necessary to take into account the consequences of reduced investment in public works. The government should increase investment in infrastructure development, particularly electricity and transport, as well as in rural areas overall. Monetary policy should be tightened in a flexible manner to help businesses gain easier access to bank loans, she added.
According to Vu Duy Thai, chairman of the Hanoi Industry and Trade Association, the government needs to intensify measures to promote consumption, support the domestic market and review tax policies. It is very important to consider economic targets carefully so that they can be successfully met.
A representative from the Australian Business Association in Vietnam said that creating a stable business environment is a decisive factor in developing Vietnam’s economy, particularly in the current global economic slowdown. Laws and documents on law implementation should be issued in accordance with a roadmap to ensure benefits for investors.
Alain Cany, chairman of the European Chamber of Commerce (EuroCham), suggested Vietnam escalate the equitisation of State-owned enterprises (SOEs) and announce specific plans for strategic partners. The equitisation of SOEs plays a key role in the development of the national economy, as well as in issuing and following international rules in such important fields as business administration, he said.
Michel J. Pease, chairman of the US Chamber of Commerce (AmCham), considered corruption the biggest challenge to Vietnam’s progress. He described corruption as a national danger, saying that anti-corruption should be the primary task of the Vietnamese government.
Vietnam’s commitments to building an effective, dynamic market economy can be fulfilled when businesses record a high growth rate. Many enterprises believe that with the current orientations, the country will achieve positive economic growth in 2009 despite global economic turmoil.
VOV
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