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Private sector must drive growth
The private sector needs to make increasing efforts to become a motive force in the nation's economy, according to a research by a working group on the implementation of the Law on Enterprises.
Over 83,000 private enterprises were established under the law in 2009 alone, bringing the total of number of registered firms nationwide to 460,000, said the group's report, citing Ministry of Planning and Investment statistics.
Total capitalisation of private sector firms rose from VND38.7 trillion (US$2.1 billion) in 2000 to VND657 trillion ($35.5 billion) in 2008, while the average equity in private enterprises rose from VND1.2 billion to VND5.2 billion during the same period.
The average firm now has assets worth VND14 billion and sees revenues of VND17 billion per year.
During the ten-year period between 1999 and 2008, the private sector was the largest creator of jobs, adding 4.3 million jobs to the economy – four times as high as created by State-owned enterprises during the same period.
Nevertheless, the number of large-scale private businesses remained modest, noted Dau Anh Tuan, a member of the working group. Of the 500 largest companies in 2009, private enterprises accounted for just 29 percent, and most of those were former State-owned enterprises that had been equitised, he said.
The private sector remained plagued by inadequate investment in production technology and research, as well as a lack of long-term business strategies and inadequate management capacities, Tuan added.
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