Cooperation - A safe playing ground for enterprises

According to current statistics, Vietnamese small and medium-sized enterprises account for 97 percent of total enterprises nationwide. New Vietnamese small and medium-sized enterprise associations, as well as other associations of commodity categories, aim to meet cooperation and integration demands, creating a safer and fairer playing ground for enterprises, especially when has become an official WTO member. PhD. Nguyen Van Than, permanent deputy director of Small and Medium-sized Enterprise Association was interviewed on this issue.

Could you please let me know how small and medium-sized enterprises of have operated since ’s official entry into the WTO?

2007 witnessed 38,550 more enterprises registering with capital totalling VND303 billion, up 320 percent against 2006, contributing to national GDP growth. Despite the rapid increase in number, the majority of newly registered enterprises are small and medium-sized. Due to limitations in capital, labour pool, technology and the infrastructure system, the operation of such enterprises has not brought pleasing results. 

In the current economic context, Vietnamese enterprises, especially small and medium-sized ones, are subject to direct and indirect influences from integration. Fortunately, despite tremendous difficulties and challenges, small and medium-sized enterprises have been aware of the importance of cooperation in business operation. Through this cooperation many effective solutions have been implemented, driven by great pressure from competition to expand market-share and improve quality and efficiency.

During integration process, both opportunities and challenges are waiting for Vietnamese enterprises. Enterprises should make best use of the former and minimize the latter, since the success of the whole economy largely depends on them.

Despite being an official WTO member, economy is not yet considered a full market economy. In your opinion, what do enterprises need to do so that economy can be recognized as a real market one?

has achieved its major goal in its first year of WTO membership: economic growth reached 8.5 percent, there are more opportunities to export commodities and the flow of foreign investment into the country significantly increased. has improved the legal environment and reduced state interference in economic sectors, becoming more compliant with international practices and WTO requirements. The economy, however, has not yet been considered a full market economy.

This an interesting question, since macroeconomics exercises are often for policy makers or economic managers at the state level, not for enterprises themselves. In my opinion, as an entrepreneur, enterprises should first and foremost equip themselves on their own. Besides necessary factors for the enterprises to maximise production and trading capacity, they need to perfect themselves and further equip themselves with knowledge and understanding of markets, consumption trends, brandnames, laws, legal procedures, rules and regulations and business cultures appropriate to their individual business environment and market to improve their strategic vision, thereby bringing long-term, effective and sustainable results.

How do you think when consumer goods producing enterprises in Ho Chi Minh City enjoy more development than those in Hanoi ?

Among more than 200,000 granted with licences to operate nationwide, 30 percent (approximately 60,000 enterprises) specialise in consumer goods producing and trading.

The higher development of Ho Chi Minh-based enterprises compared to Hanoi-based ones affirms their advantages in market, production and trading capacity and ability to forecast market trends.

In market terms, Ho Chi Minh City is the strongest economic hub of the nation. This market has the biggest number of consumers and highest consumption demand. Consumers are of all ages, genders, payment capacity and living standards. These give the Ho Chi Minh City market outstanding advantages over Hanoi , which is smaller and home to stricter consumers.

In terms of internal factors within the enterprises, it is obvious that Ho Chi Minh-based enterprises have better conditions for improving production and trading capacity than Hanoi-based ones. With a pool of high quality personnel, better capacity of investigating and meeting market demands, as well as the application of modern technology in production and distribution, especially their ability to push demand, enterprises in Ho Chi Minh city have had further development against those in Hanoi. Mutual searching, sharing and studying among domestic enterprises is, therefore, of great importance to raise the economy to a higher position on the international market.

 Thi Van – Nhu Oanh