PM kicks off private sector talks

The national-level dialogue of Prime Minister Nguyen Xuan Phuc and the business community, entitled “Walking in the step of businesses,” has kicked off. The PM promised to help enterprises tackle their woes. Below are some of their issues.

PM kicks off private sector conference/discourse/talks
The conference is a highlight event for the Vietnamese private sector
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Phuc told more than 2,000 delegates, including representatives of enterprises, ministries, and local and international organisations, that since his last meeting with the business community in Ho Chi Minh City in April last year, the local business climate has remarkably improved.

“However, these achievements are still humble and are just the first results. There still exist numerous obstructions affecting enterprises’ performance,” Phuc said.

“We would like to receive your proposals and frank, hearty, and constructive advice, so that the business and investment climate can be further bettered,” he said. “The government will also enact a directive on better implementing Resolution 35 on improving the local business and investment environment.”

Resolution 35, issued in May 2016, reflects the government’s determination to support and develop the business community. It requires ministries and state management agencies to drastically reform procedures to facilitate enterprises’ operations.

Resolution 35 has also set the goals of raising the number of enterprises to one million by 2020 from the 515,000 at present. The private sector will contribute about 50 per cent of the GDP. Social labour productivity will increase by 5 per cent annually.

According to a survey conducted by the Vietnam Chamber of Commerce and Industry in late 2016, 75 per cent of surveyed enterprises see the “positive impacts” of Resolution 35, and 25 per cent said that they were left unaffected.

The business community shared their issues with the PM at the dialogue

Nguyen Thi Nga - Chairman of BRG Group

As an enterprise’s owner, I am so thankful for the huge support from the PM and the government. Without them, the business community could not have become a driver of national growth.

Nevertheless, we see some obstacles facing our business.

First, to turn the private sector into an important driver of the economy, we wish the government would introduce some resolutions or documents to materialise the Resolution of the Fifth Party Central Meeting’s spirit, so that the private sector could be supported just like other economic sectors in Vietnam. It would recognise the important role of the private sector, especially as it accounts for nearly 40 per cent of the GDP at the moment.

Second, regarding the PM’s previous commitment to abolish the criminalisation of civil and economic relationships, the PM said this is one of the government focuses and this policy is mentioned in Resolution 35.

We proposed the government to work out a detailed legal framework, regulations, and documents to protect companies, not criminalise their economic violations, so that companies will have a chance to fix their mistakes. This will enhance companies’ belief in the government and could also encourage investors to act with more confidence.

Jens Ruebbert - Chairman of EuroCham

 

Today we have a unique opportunity to do this and to take this partnership and friendship between Europe and Vietnam further with the coming EU-Vietnam Free Trade Agreement, also known as the EVFTA. The EVFTA is immensely important and will provide fantastic opportunities to both sides. EuroCham is firmly committed to make the implementation of the agreement a great success and to fill it with life. Therefore, we are not only promoting the FTA in Vietnam, but also in Europe, in particular during our visit to Brussels and other European capitals in September this year. We believe that with the EVFTA, we will see a "new strong wave" of European investment into Vietnam, while when it comes to trade, the export-import turnover is expected to increase by 50 per cent in the next coming years. We would like to also raise the importance of our SMEs which constitute more than 70 per cent of our members, reflecting the backbone of European businesses and economies. Hence, as part of our strategy towards a successful implementation of the FTA, EuroCham is closely cooperating with VCCI on an action plan to bring European and Vietnamese SMEs closer together, not only in the large business hubs of Vietnam, but in the provinces as well.

At EuroCham, we have been following your guidance and implementation of Resolution 35 with great attention. Since 2016, we have really seen positive efforts and changes, and a very modern, open-minded, practical, and constructive approach. Overall, your government has been clearly business-minded, having the good of the people at heart, a stance that we truly welcome. This year, EuroCham published the 9th Edition of its yearly Whitebook, the Chamber’s compilation of issues and recommendations from our Sector Committees towards building a great business environment in Vietnam. Among them, much work has been put into identifying key topics and provide recommendations from the perspective of business professionals, in particular in the areas of healthcare, food safety, green technology, education, intellectual property rights, and the Vietnamese legal and tax framework.

We believe their practical experience in doing business in the country constituted a valuable input, one that may help the government assess the formulation, application, and enforcement of regulations and policies. Retrieving information from the ground and on how things are working is to collect actionable facts that can be used to ultimately improve the business environment in Vietnam.

Karashima Hiroshi - Chairman of the Japan Business Association in Vietnam

More transparency and fairness in the implementation and interpretation of laws and regulations must be promoted in Vietnam.

According to a Japan Bank of International Cooperation-led survey on Japanese companies, Vietnam is ranked fourth among the countries with the best investment outlook in the mid-term. The top suggestion fed-in by Japanese firms looking to invest in Vietnam is to improve transparency, operational standards, and the interpretation of Vietnamese laws.

The catalyst for effective investment in Vietnam is to clarify interpretation and implementation of laws and regulations.

Jonathan Moreno - Chairman of AmCham Vietnam

AmCham would like to express our appreciation for the intentions and results of the government’s Resolution 35 on supporting businesses. This effort, as recently noted by our partners at VCCI, “demonstrates the government’s commitment to action and integrity in service of business in order to make businesses a real driving force of the economy.”

The American business community is proud of our contribution to the development of the Vietnamese economy. Trade between our two countries surpassed $52 billion last year, up 16 per cent year-over-year. We are confident that the upward growth trend of trade and investment relations between the US and Vietnam will continue, and can strengthen.

A new US President took office recently, and while we regret that the Trans Pacific Partnership Agreement has stalled, AmCham believes there are new paths forward to increase trade and investment between the US and Vietnam.

Among other things, we support a free trade agreement between our two countries. For an FTA to move forward, it will need to be viewed as fair by all parties. The American business community in Vietnam stands ready to do our part to make this goal a reality. Our first step takes place later this week, when AmCham, VCCI, and the US Chamber of Commerce will join officials from both governments to emphasise the importance of the US-Vietnam economic relationship and to hold in-depth discussions on ways to further develop trade and investment between our countries.

For Vietnam to maintain competitiveness in the US and other global markets, your Excellency has correctly identified the importance of managing the costs of doing business. In order for Vietnam to take full advantage of the markets that are open to it, non-productive red tape must be controlled.  Vietnamese and foreign-invested businesses alike need a supportive environment to thrive, and as you well know, that means their relationship with the administrative agencies should be mutually supportive. You have had great success in the past with Project 30 and other administrative procedure reform initiatives. Our enterprises have appreciated these initiatives and today we would like to urge some specific additional procedural reforms.

AmCham supports the APEC activities in Vietnam this year that also present a great opportunity to highlight Vietnam’s economic progress.

Le Van Kiem - Chairman of Long Thanh Golf Investment and Trading Joint Stock Company and the Vietnam Veterans’ Business Association

To implement highway projects, we need a huge amount of capital, which domestic banks cannot supply.

Our company has been cooperating with a big Japanese firm in infrastructure construction. We have agreed that the Japanese partner will provide us with billions of dollars to implement some of our projects. Also, we will purchase some BOT projects managed by state-owned companies in order to cooperate with the government to implement them. However, one of the difficulties when implementing these projects is that they have to be constructed over a long period, at the risk of heavy exchange rate fluctuations.

Thus, we expect to receive the government’s guarantee in terms of exchange rate, whereby in case of big fluctuations, investors can extend the period during which they can collect tolls.

Nguyen Van De - Chairman of Hop Luc Corporation and chairman of the Thanh Hoa Business Association

The government should increase the number of personnel that work directly with enterprises. State employees are too often not available at work. Please encourage the competitive selection to fill in state employment positions so that capable state employees can rise up, just like the prime minister orders.

The government should not join in business fields that the private sector is capable of handling. They should create equality between public and private hospitals, ensuring that the process of examination and treatment as stipulated by the Ministry of Health and the Vietnam Social Insurance Agency is consistent. In addition, the government should amend regulations on providing healthcare services to the poor, as well as regulations on allowing people to receive healthcare services at any hospital, not just the hospital they registered on their medical insurance plan.

The government should specify the responsibility of localities in receiving and handling the complaints of enterprises.

Nguyen Van Than - Chairman of the Vietnam Association of Small and Medium Enterprises

The small and medium business community in Vietnam is facing many difficulties, but costs are the biggest obstacle.

Although many steps have been taken to improve the business environment, compliance costs remain high, accounting for a large proportion of companies’ business cost structure. Especially, unofficial costs mainly related to procedures in land access, taxation, and customs, remain a big problem.

This has negatively affected the cost of production, inadvertently pushing up the price of the product, directly affecting the benefits of consumers. There are many reasons leading to the appearance of these unofficial costs. In terms of public servants, unprofessional, irresponsible staff with low wages ask companies to pay these fees despite the clear regulations of the government. Meanwhile, the enterprises themselves believe that making such payments is necessary to gain their targets easier.

 

By Thanh Tung