Good progress: A worker harvests flowers at a nursery in My Tho, Vietnam. The country’s economy is likely to grow 6.3% in the first quarter and at a faster clip of 6.5% in the April to June period. — Bloomberg
HANOI: Vietnam needs to promote the development of national corporations as an important force to drive economic growth, experts say.
Developing enterprises, including large corporations, have been considered an important solution to improve production capacity and build an independent and autonomous economy.
It’s time to further promote their role in this period when the Vietnamese economy needs added impulse to recover from the Covid-19 pandemic and global economic slowdown, according to the Planning and Investment Ministry.
The ministry said that Vietnam has orientations to develop national enterprises and large-scale enterprises to play leading roles in key industries and fields and be capable of performing strategic tasks leading the industrialisation and modernisation process.These policies demonstrate the message of the party and the government that Vietnam will develop a business community with unique identities and brands to build an independent and self-reliant economy, Planning and Investment Minister Nguyen Chí Dung said.
International experience from countries which achieved success in industrialisation have shown that large corporations and national corporations played an important role in the early stages of economic reform.
They would help create an ecosystem to lead the development of small and medium enterprises (SMEs) and enable participation in the domestic and international value chains.
According to Tran Toan Thang from the ministry’s Development Strategy Institute, the 500 largest private enterprises in Vietnam have an average workforce 160 times higher and total assets 376 times higher than the rest of the private sector.
Despite accounting for a modest 0.075% of the total number of private enterprises across the country, the top 500 have been creating jobs for 12% of the labour force, have 28% of the total assets, 18% of revenue and contributed 18.4% of the state budget from the private sector.
Compared to foreign direct investment and state-owned enterprises, the top 500 have greater impact, he said.
He cited statistics that every 1% increase in investment capital of the top 500 raises investment by the domestic private SMEs by 0.45%% in the first year and 0.26% in the following years.
This means that the investment of large corporations promotes the investment of smaller enterprises as their suppliers or satellite enterprises.
Emphasising that every economic sector is equal in a transparent and competitive environment, Thang said each will need separate policies to promote their development.
Vietnam has policies for cooperatives as well as micro, small and medium enterprises, he said, adding that specific mechanisms should also be raised for large corporations.
The power of large corporations contributed significantly to the development of major economies such as South Korea, Japan and China, he said.
Without strong government support through different measures and policies, it would be difficult to have globally famous private brands with capitalisation of hundreds of billions of dollars like Samsung, Huyndai, LG, Daewoo, Toyota, Hitachi, Mitsubishi, Honda, Huawai, Alibaba and Tencent, for example, Thang said. — Viet Nam News/ANN
