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Senior economist’s advice to businesses, policymakers
Pham Chi Lan, a senior economist, remarked in a Tien Phong interview on the occasion of Vietnamese Entrepreneurs’ Day on October 13, that no other businessmen in the world are experiencing such difficult days as Vietnamese entrepreneurs.
Pham Chi Lan, former Deputy Chairwoman of the Vietnam Chamber of Commerce and Industry and Vice-Director of the Institute for Development Studies (IDS), explained that Vietnamese businessmen have suffered from two “storms.” The first occurred between late 2007 to the end of 2008, when high inflation, input material prices increased and escalated bank interest rates put heavy burdens on businesses. The second is the present “devastating” global financial crisis, ongoing since the end of 2008.
Tien Phong: Do you think that the storms are too violent and are more than Vietnamese businessmen can stand?
Pham Chi Lan: The storms can be seen as serious challenges that only the best businesses survive. The two storms have devastated many Vietnamese businesses.
A lot of severely-hit businesses have been dissolved or merged into other businesses, while many others must be restructured.
Some businesses can withstand the storms, but I don’t think there are many, maybe 20 percent of the businesses.
TP: What have Vietnamese businesses learned from the two storms?
Ms. Lan: They have learned valuable lessons. First, only businesses with good corporate governance can survive crises. Second, businesses with stable human resources can better cope with difficulties. Third, and this is a big lesson, export is not the only way for businesses to develop. Fourth, businesses need to cooperate with each other to reach their targets.
TP: Do you think that Vietnamese businesses have completely escaped the storms?
Ms. Lan: Optimistic experts claim that the second storm is over. However, no one can dare to say that the economy has recovered. It will take several years to achieve a full recovery. Vietnamese businessmen have escaped the storms, but big difficulties are still ahead.
TP: What role the Government has been playing in the financial crisis? Do you think that the Government is the mainstay for Vietnamese entrepreneurs?
Ms. Lan: The Government has done well to support businesses and help them overcome difficulties.
The Government implemented its eight-measure package to deal with high inflation, which led to sharp decreases in bank loan interest rates, down from the record-high interest rate of 20 percent.
It also launched its five-measure package to deal with the economic downturn, providing interest rate subsidies as well as tax reductions and exemptions. A lot of enterprises have benefited from these packages and overcome their difficulties.
TP: What do you think are the biggest worries of businessmen now?
Ms. Lan: They are interested in the second demand stimulus package of the Government, so that they can set up business plans of their own.
They also want to know how the Government will allocate resources. Ineffective resource allocation will damage the development of the national economy.
TP: How would you advise businesses, businessmen and the Government of Vietnam?
Ms. Lan: I would like to say more about the national resource allocation. The Government should have a clear plan and not let the strength be used in an unproductive way.
The Government also needs to pay special attention to developing agriculture.
Agriculture demonstrated its importance in the national economy especially during the crisis. It was agriculture that could deal with the crisis and rescue Vietnam’s economy.
Vietnam is an agriculture country and, therefore, the Government needs to focus on developing agriculture. This will help develop industries, including farm produce processing, which feeds 60-70 percent of Vietnamese people.
VietNamNet, TP
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