Chairman’s Insights May 6th 2019
Vietnam Private Sector Economic Forum 2019
Last Thursday I attended the subject meeting, in Hanoi, the plenary session being chaired by Prime Minister Nguyen Xuan Phuc. The morning session composed of 6 thematic conferences all chaired by leading political figures from the Government, Cabinet office and Central Economic Commission. The themes were attracting market segments of tourists with high spending power (which I spoke at); Completing Institution and Fundamental arrangements for the digital economy in Vietnam; Tapping into CPTPP….; Facilitating medium and long term capital flows; creating sustainable value chains for agriculture, forestry and fisheries; and new business models and innovation in Vietnam plus a panel discussion with Businesswomen on the aspirations for a prosperous Vietnam.
In his address PM Phuc stressed that the private sector played a crucial role in the national economy and should be given more impetus for development. The Government’s target was to have 1 million private enterprises by 2020, (author: this maybe a little ambitious compared to the 700,000+ today and the recent annual increase of approx. 100-130,000). The private sector today accounts for 42% of GDP and employs 82% of the labour force. However, it was still operating below its true potential and ways were needed to help local companies become part of the global supply chain; for family companies to grow and become part of the business community; Innovation in technology together mindset and attitude; to create breakthroughs in the business environment and adopting legal regulations to enable new technological development and also structures with specific reference to PPP.
He commented on the need for a level playing field to facilitate the development of the private sector alongside an efficient state sector, with progressive entrepreneurs with a need to maintain integrity and transparency and to fight against corruption.
National Assembly Vice Chairman Phung Quoc Hien emphasised the need for enforcement of legal regulations and the removal of duplicate regulations and to better enable growth by reducing the cost of compliance and there should be a an extensive review of the legal system, especially areas related to institutions, civil servants, the investment law the ownership law and intellectual property laws and the land law.
MPI Minister Nguyen Chi Dzung called for policy stabilization with the need for consistency in both the legal documents and the legal system and assured the audience that the MPI would be working to remove duplication and inconsistencies across laws and regulations and that there would be specific policies introduced to cover the transition period. He went to great length to stress that laws and regulations will NOT be retroactive and any negative impact of new laws and regulations on existing business except where matters of National Defense were involved and that these would need the Prime Ministers approval.
Speakers from the Private Sector included Madam Thai Huong the founder of TH Milk her main message was for the Government to focus on creating agricultural, forestry and fishery chains with high commercial value meeting the requirements of the key markets; Madam Nguyen Thi Phuong Thao CEO of Vietjet, who called for the Government to hasten the restructuring and equitisation of SOE’s and commercial banks with the aim of easing the negative impacts on macro-financial stability and growth; Mr Don Lam CEO of Vinacapital who talked about the imbalance in medium and long-term funding and the need for policies for the development of the capital markets to reduce the dependence on banks and the need for transparency in the markets.
In summary a continued dialogue with the Government who clearly wish to remain as being pro-business and determined to reduce the amount of regulation and bureaucracy on business and the associated costs.
Kenneth M Atkinson