Realistic Assistance to SMEs

 

In recent years, SMEs increased in number reaching a total of over 365,700 companies with registered capital of nearly VND1,448,000 billion (US$85 billion) and 3.7 million household businesses, employing 50.1 percent of workforce in business sector, making up 29 percent of total capital and over 40 percent of GDP.

 

The role of SMEs has been established in socio-economic development. The State lendsstronger support, developing SME promotion centres, promoting legal and financial supports, upgrading competitiveness, technology, new products, intellectual property, market information, etc. For their parts, SMEs must make good use of such assistance and SME centres must involve SMEs in such programmes.

Mr. Nguyen Dinh Luong, former Chief negotiator of Vietnam-US bilateral trade agreement      
The economy develops on the strong foundation of business community. The State, therefore, must organize administrative mechanism in service of the people and businesses so that the businesses can devote their whole strength to business activities. The State must introduce strategy, competitive advantage and orientation for economic development, what should and should not do, for instances, building roads or manufacturing cars. It is impossible to develop all industries in a weak economy and small capital. The State must develop a legal environment with equal participation of all economic sectors without any discrimination. In a review of legal documents issued in the past five years, Ministry of Justice disclosed on November 26, 2008 that 6,900 documents were improper. The shortcoming in the past has created the habit of begging-and-giving, overlapping and impracticality. A favourable business environment requires correct policy. In the conditions of increasingly deep integration, business activities are closely associated with the global chain of value, the restrictions on 3 percent of expat workers at enterprises, on advertisement and registered capital, together with recent monetary regulations of 25 percent in interest rate are obstacles that may cause bankruptcy to series of enterprises.

 

There are many SME promotion programmes. However they are unrelated to SME association and almost unknown to businesses. SMEs must take part in the programmes to recommend and improve the State policy. The low percentage of businesspersons in the National Assembly makes it difficult to adopt realistic policy.

 

Mr. Nguyen Quang Thuat PhD, Director General of Investment. Import-Export Corporation (Foodinco):
With two storms – inflation and deflation in early and late 2008, Vietnamese businesses have suffered losses and faced danger of bankruptcy. The losses caused by high interest rates aimed at controlling inflation at home and by global financial crisis reducing export prices. If it is single loss for world businesses, it is double for Vietnamese. The loss and depression of o increase businesses lead to the loss of the banking system. The US$6-billion-package to kick-start demand is a good news to businesses, however, might also lead unfairness and dependence of businesses. For examples, tax reduction can only be applied to profit-making businesses. It is no help to loss-making businesses. It can be best applied to reduce interest rate of banking loans. Besides, it can be applied in such sectors as agriculture and food processing having direct impact on socio-economic development.

 

Mr. Truong Phuoc Anh PhD, President of Da Nang Young Entrepreneurs Association and Director Viet Tin company:       
In the mean time, it is impossible to discuss on strategy or long-term plan of businesses. We must discuss on immediate measures to save businesses first to make them survive, then later to long-term plan. Fighting inflation in early, then deflation in late 2008 demand a review of the State management. We must have better assessment and forecast of the world economic recession to prevent Vietnamese businesses from being panic and refrain from investing in business especially with current lower production cost and favourable banking interest rates. The negative attitude of businesses may cause more difficulties for the economy. Therefore, the assistance of the State must be adequate and more realistic to businesses that are really in difficulty.