We need "leading figures" to guide us.

The private sector is identified as one of the key drivers of growth. Vietnam needs strong corporations with regional and global scale. These will become the "leading cranes" guiding small and medium-sized enterprises, as well as the entire economy, to reach greater heights on a foundation of self-reliance.

The Hai Van road tunnel expansion project is being undertaken by Deo Ca Group.

During the period 2016-2023, the private sector recorded impressive growth rates of 6-8% per year, significantly exceeding the average growth rate of the entire economy, especially compared to the state-owned sector (28% of GDP) and FDI (20% of GDP). Looking back over the past 40 years, Dr. Le Duy Binh, Director of Economica Vietnam, believes that the private sector in Vietnam has experienced remarkable development, transforming from a small and fragmented economic component into a crucial pillar of the economy. The private sector contributes approximately 60% of GDP, 98% of total export turnover, and creates jobs for about 85% of the country's workforce.

The "giant" economic conglomerate and its essential position.

Vietnam now possesses a strong private sector with sufficient capital, technology, and management capabilities. Prominent brands such as Vingroup, Thaco , Hoa Phat, etc., not only master technology, lead in innovation, and build sustainable development ecosystems, participating in fields such as green transformation and digital transformation, but also address major national challenges, contributing to building an independent and self-reliant economy. The growth of these enterprises has significantly supplemented resources for the economy, while simultaneously reducing the burden of investment from the state budget and promoting the restructuring of the economy in conjunction with the innovation of the growth model.

In South Korea, chaebols like Samsung and Hyundai have played a pivotal role in transforming the economy from an agricultural to an industrial one in just a few decades. Despite challenges, in 2024, South Korea's per capita income surpassed $36,000 for the first time. It's clear that nations aiming for international prominence need powerful conglomerates to compete globally. Only large, influential corporations can invest in technology, research and development (R&D), and improve product and service quality.

Mr. Ho Minh Hoang, Chairman of Deo Ca Group, stated that the Group is ready to undertake major upcoming projects of the country. Over the years, Deo Ca has placed special emphasis on developing and upgrading its human resources, proactively training personnel at various levels and in diverse fields throughout the system, planning and investing in future human resources, and cooperating closely with domestic and international training institutions.

However, the Vietnamese business community is facing many difficulties and challenges, and has not yet fully played its pioneering role as expected. The linkages between large and small businesses remain quite limited. The proportion of small and medium-sized enterprises (SMEs) participating in the supply chains of large domestic businesses is still not high. This results in a less robust ecosystem connection.

In terms of scale, financial strength, and global reach, Vietnamese corporations still lag far behind their regional competitors. A mere glance at Thailand reveals a significant gap. Thanks to effective global development strategies, robust infrastructure, and strong capital mobilization capabilities, Thai private corporations have established a solid position in the international market.

According to the WEF's 2023 Global Competitiveness Index (GCI) report, Vietnam ranked 77th out of 140 economies assessed, a drop of 3 places compared to the previous year. Thailand, meanwhile, ranked 30th. This is partly due to Thailand possessing many corporations strong enough to compete internationally, while Vietnam relies heavily on foreign direct investment (FDI).

Considering only the domestic market, corporations like Vingroup, Hoa Phat, and Masan are playing a dominant role in the private sector. Vietnam aims for the private sector to become the leading force, pioneering technology application and innovation, contributing approximately 70% of GDP by 2030. This goal will be difficult to achieve without the significant growth and breakthroughs of these leading corporations.

Thai conglomerates like CP Group and PTT are not only active in Southeast Asia but also expanding globally, mastering technology and dominating many important sectors, from agriculture to telecommunications and energy, with annual revenues of tens of billions of USD. In fact, these Thai giants also own many leading businesses in their home market of Vietnam. Beyond their diverse sectors, they also have an advantage in the processing and manufacturing industry, which accounts for a large proportion of total Thai FDI in Vietnam.

Clearly, a sufficiently strong economic conglomerate should not only dominate the domestic market. Their investment capacity and scope must extend to other countries. Many Vietnamese conglomerates have sought opportunities abroad, but their investment projects have not been truly impressive and have not yielded the expected profits. It seems that the game of large, large-scale conglomerates has only seen the participation of Vietnamese conglomerates at the level of "observers."

Paving the way for businesses to break through.

One of the tasks and solutions mentioned in Resolution No. 68-NQ/TW of the Politburo on the development of the private economy is the formation and rapid development of large and medium-sized enterprises, and private economic groups of regional and global scale.

The practical demands necessitate accelerating the scaling up and enhancing the competitiveness of businesses, supporting innovation, digital transformation, access to credit, market expansion, increasing the participation of private enterprises in key national projects, and diversifying and improving the effectiveness of cooperation between the State and the private sector.

At the seminar "Bank Capital Contributes to Promoting the Private Economy," Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management Research (CIEM), shared that Vietnam needs to prioritize the development of 3-5 diversified conglomerates with a scale exceeding $20 billion in the next 10 years. To achieve this goal, the economy must be built on a solid foundation of small and medium-sized enterprises (SMEs). Each class of businesses, from startups to SMEs and large enterprises, will develop naturally and gradually create large corporations.

While Dr. Le Dang Doanh emphasized a changing factor in investment thinking, Vietnamese businesses are currently spending too little on research and development (R&D), with a rate of less than 1% of revenue (large corporations in Thailand like SCG invest 3-5%). Sharing the same view, Professor Nguyen Dinh Duc, Chairman of the University Council of the University of Technology, Vietnam National University, Hanoi, shared: In the 1960s, South Korea and Vietnam were in relatively similar situations, with average per capita income of only about 200 USD per month. However, unlike Vietnam, South Korea was ahead and chose technology as a central element in its development strategy.

The business environment is considered the most important factor in promoting the development of the private economy. Therefore, simplifying administrative procedures is necessary, but more importantly, ensuring transparency and openness in the implementation of policies is crucial. Businesses need clear and easily understandable guidance on relevant processes and procedures. In addition, the State needs to build a fair and transparent dispute resolution mechanism to create confidence for businesses participating in the market. Reducing transaction costs in business is more important than reducing compliance costs, as this allows businesses to focus more on production and business activities and expand their market scale.

Ms. Nguyen Thi Nga, Chairwoman of BRG Group, shared the sentiments of businesses in general and BRG in particular: “I propose policies to provide financial support for carbon neutrality and construction projects, including tax breaks and streamlined administrative procedures. There should also be research and innovation centers to strongly encourage businesses to adopt clean technologies and renewable energy. This will significantly contribute to the goal of reducing greenhouse gas emissions that the Prime Minister has committed to internationally, with the aim of achieving the Net Zero target for Vietnam by 2050.”

In some cases, drastic policies, even "breaking the rules," are needed to pave the way for businesses to thrive. The state should not replace businesses, but rather create conditions for them to develop, compete fairly, and integrate successfully.

NGUYEN NGOC

Source: https://nhandan.vn/can-nhung-seu-dau-dan-dan-dat-post880190.html