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Vietnamese businesses will develop despite ‘earthquake’ and ‘tsunami’
Despite warnings that 2009 will bring many difficulties, which can be described as the ‘earthquake’ and ‘tsunami,’ experts still believe that Vietnamese enterprises have strengths to help them through the crisis.
At the forum “Big enterprises and the prospects of Vietnam’s economy,’ held by VietNamNet newspaper and VietNam Report in Hanoi on January 2, 2009 on the occasion of the announcement of Vietnam’s top 500 enterprises, Dr. Dinh Van An, Head of the Central Institute for Economic Management (CIEM), identified six factors that he believes can help Vietnamese enterprises survive and develop during the difficult period.
The first factor, according to An, the most difficult period of the crisis has passed, and the major world economies have all been trying to apply measures that have never been seen before in history to minimize negative impacts. It is highly possible that the global recession will be settled by the end of 2009 or early 2010.
The other five factors come from the inner conditions of Vietnam’s economy. Vietnam has not deeply integrated financially into the world. Vietnam is an agricultural country, with 70% of the population living on agriculture, and 97% of businesses being small- and medium-sized enterprises, which can quickly adapt to new circumstances.
As Vietnam’s exports have been narrowed due to importers’ belt-tightening policies, the country has been focusing on stimulating the domestic demand. The Government’s demand stimulus package will bring big opportunities to businesses. Meanwhile, Vietnam is still considered one of three countries that have an attractive investment environment, thus catching the attention of foreign investors.
Other favorable conditions have also been cited, including the people’s high expectations on economic development, good cooperation among the state, enterprises and people, and the improved management capability of the Government.
Dr. Adam Mc Carty, Chief Economist of Mekong Economics, also thinks that Vietnam will bear less of an impact from the global economic recession thanks to the current conditions of the national economy. However, he stressed that it is impossible for Vietnam to completely escape from the crisis.
How to escape the crisis?
Former Deputy Prime Minister, Vu Khoan, who attended the forum, said that the most suitable attitude for businesses right now is to keep calm, not be discouraged, and prepare well for the upcoming difficult period.
Khoan said that now is the right time to restructure the national economy to make it healthier. Businesses need to restructure capital, organization, technologies and products.
“If we can do these things now, we will survive and develop, otherwise, we will lag behind and remain backwards,” Khoan said.
A quick survey of the participants at the forum showed that most of them think the national economy will see a 5-6% growth rate in 2009. Meanwhile, 1.4% of participants are more optimistic, forecasting a growth rate of over 6%, while 16% are pessimistic with the forecasted growth rate of less than 5%. Regarding the inflation rate, most of them think that the rate will be between 10% and 20%.
When asked about the development strategy adjustment to help adapt to the new circumstances, most of the big enterprises in Vietnam said that they will develop new products and services. 21% of businesses said that they will cut down operation expenses and restructure.
Regarding turnover and profit, 29% of businesses said that turnover will not decrease, or even increase, while the remaining said turnover will decrease. Meanwhile, no business said it will make major changes in the workforce. No job cuts proves to be the choice of the majority of businesses, while 29% even said they will employ more in 2009.
Nguyen Nga
vietnamnet
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