New solutions for the private and state economic sectors to promote economic growth

The draft Political Report submitted to the 14th National Party Congress sets the goal of becoming a developing country with modern industry and high average income by 2030; realizing the vision of becoming a developed country with high income by 2045... Striving to achieve an average gross domestic product (GDP) growth rate of 10% or more for the 2026-2030 period...

These are very ambitious but completely correct goals, in line with the context of the Fourth Industrial Revolution and before the aging of Vietnam's population, we have a golden opportunity for growth. To achieve that goal, we must revive and promote growth for both sectors: the private economy and the state economy because these two economic sectors are contributing 72% to total social investment.

Private economy and state economy are the contents mentioned in the resolutions of recent congresses and in the draft documents submitted to the 14th National Party Congress. Following the achievements, the Politburo recently issued Resolution No. 68-NQ/TW dated May 4, 2025 on private economic development, which is the most important document in the recent period. The Resolution is a "historic turning point" to liberate resources, remove institutional "bottlenecks", help the private economy make a breakthrough, contributing to the implementation of the goals by 2030 and 2045 as set out in the draft.

The two economic sectors, private and state, are the main driving forces, in which the private economy contributes about 52% ( world average about 70%), the state economy contributes 20% (before 2021 it was 24%). The operational efficiency of the state economy is still low, leading to slow accumulation of in-depth investment. In the period 2011-2022, state-owned enterprises reduced the proportion of capital and total profit contribution (respectively decreased from 33% to 20% in terms of capital, 42% to 24% in terms of profit); when compared with private enterprises (increased from 51% to 60% in terms of capital, 25% to 38% in terms of profit) and foreign direct investment (FDI) enterprises (increased from 16% to 20% in terms of capital, 32% to 38% in terms of profit).

Illustration photo: baochinhphu.vn

Through that we can see some of the following problems:

Firstly, weak competitiveness and low position for domestic enterprises. In the period 2010-2024, domestic enterprises reduced the proportion of export turnover from 53% to 29%, import from 56% to 37%, the shift in export and import to FDI enterprises. In 2024, in the surplus of 25 billion USD, FDI contributed 49 billion USD, domestic enterprises had a deficit of 24 billion USD and tended to continue to increase.

Second, domestic enterprises have not yet participated deeply in the global production and supply value chain, mainly focusing on producing low-value, low-value-added goods for domestic consumption rather than export. Large FDI enterprises have difficulty finding domestic suppliers.

Third, the investment efficiency contributing to the growth of the state-owned enterprise sector is not high. According to the ICOR (effectiveness according to invested capital) data of the General Statistics Office, state-owned enterprises have the lowest efficiency with an ICOR of about 10.3 compared to private enterprises of about 7.6.

Finally, the solid position and international competitive foundation for Vietnamese enterprises are weak and not bold enough to participate in international investment.

Military Commercial Joint Stock Bank (MB) is an enterprise with 50% of equity capital belonging to military enterprises and state-owned enterprises, a combined economic and defense unit established in 1994 under the policy of the Central Military Commission. Currently, MB is the bank with the largest customer base in the industry with 34 million customers and 150,000 enterprises; MB ranks 5th in scale with total assets of more than 1.3 million billion VND, charter capital of more than 81,000 billion VND (basically self-accumulated). MB's strategy focuses on serving customers through investment in technology and digital platforms (with 3 platforms: AppMB, BizMB, Charity) with the current leading transaction scale expected to be 15 billion transactions in 2025 (the digital channel transaction rate is nearly 100%). Every year, MB contributes about 10,000 billion VND to the state budget; Participate in State-Government programs to contribute to promoting economic growth and stabilizing the country's macro-economy.

From MB's business practices with large-scale customers in all economic sectors and through research on draft documents submitted to the 14th Party Congress, I propose the following 4 basic solutions:

First, effectively promote domestic enterprises through: (i) promoting public investment to create seed capital and spillover, (ii) ensuring a legal environment that firmly protects ownership rights, business freedom and protects enterprises, creates new investment opportunities, encourages participation in new projects, production projects, highly encourages enterprises to invest in expanding production and business, especially deep investment in technology and core technology. The State and Government have issued important policies to promote technology and infrastructure for enterprises; invest in management and technology talents, prioritize domestic enterprises to master national platform projects, strictly implement the Party's policies and State laws on science, technology, and digital transformation.

Next, enhance the position and promote Vietnamese enterprises to participate deeply in global production and service chains through: (i) determining the position of Vietnamese enterprises in a number of key industries (information technology, agriculture, textiles, mechanics, ports-logistics, bauxite and basic metals...), (ii) preferential policies on tax, investment in science, technology and research, (iii) FDI impact using Vietnamese partners, technology transfer and taking advantage of signed FTAs.

In addition, improve the investment efficiency of state-owned enterprises through the following mechanisms: (i) The State/Government guides and decides on strategies; state-owned enterprises apply private-like governance mechanisms and follow advanced international standards/practices, linking income and position with business results to attract talent; (ii) state-owned enterprises are in charge of important projects, especially projects with national advantages.

Finally, build competitiveness and position for Vietnamese enterprises, focusing on management capacity, innovation spirit, research and application of science and technology, product/service quality for export, bold investment abroad. The goal is to create over 1,000 pioneering enterprises internationally, in which the State should seek strong support for 100 pioneering Vietnamese enterprises to compete internationally (in advantageous industries such as information technology - digital transformation, mechanics, telecommunications, garment, maritime transport and emerging industries such as green energy, shipbuilding, basic materials with high value and potential in the country and neighboring regions), along with (i) foreign policy to protect and support Vietnamese enterprises investing in foreign markets, (ii) special mechanisms from capital, talent, attracting investment from the Central (national-level enterprises) to provinces/cities (key local enterprises).

When it comes to business, we are talking about competition: Strong competitive capacity, scientific and technological capacity, learning capacity, innovation and taking advantage of new opportunities, reinforced by the new national spirit, bring Vietnam into a new era, an era of strength and prosperity...

Major General LUU TRUNG THAI, Party Secretary, Chairman of the Board of Directors of Military Commercial Joint Stock Bank

Source: https://baolangson.vn/giai-phap-moi-cho-khoi-kinh-te-tu-nhan-va-kinh-te-nha-nuoc-thuc-day-tang-truong-kinh-te-5063476.html