Economic Restructure: Businesses Need Both Capital and Information

 

Economic restructure was underlined by Prime Minister Nguyen Tan Dung at the sixth plenary meeting of the 12^th National Assembly. This is considered one of five major solutions of Government for 2010 to bring the economy from the recovery period to growth. In the process of economic restructure, corporate restructure is defined as an important content. Accordingly, State-owned groups and corporations must take the lead in renovating technologies and upgrade their growth models.

 

Businesses need both capital and informationAccording to economic experts, Vietnamese enterprises have managed to sustain in the context of economic slump. Several companies started reshuffling their governing apparatuses as well as upgrading their technologies to embrace new opportunities. However, not many enterprises have done this. The survival of most companies with existing structures is attributable to the strength given by the stimulus package of the Government, especially interest rate subsidy. When the world economy enters a new period of development following the crisis, old corporate structure of Vietnamese enterprises is a challenge against themselves and the economy as a whole because competition is obviously more severe.

 

In that context, the Government’s decision to continue stimulus packages, with reducing interest rate subsidy and orientations for corporate restructure, is very essential. In fact, Vietnam lacks necessary resources to carry out large-scale restructure, especially companies with limited finance. Nonetheless, specialists recommended that businesses need oriented information in addition to financial support. A significant proportion of Vietnamese enterprises is very puzzled in corporate restructure, especially in technological and equipment renovation, to edge up their competition in the future.

 

According to experts, the government is preparing a national economic restructure plan, featuring the direction of businesses into advantageous industries and fields. However, the progress of this plan is rather slow. Meanwhile, enterprises not only need capital but also government-oriented information. Thus, businesses hope the Government to introduce both vehicles.

 

Important factorsRecently, the Prime Minister has placed high determination in macroeconomic restructure, with focus on public administration and administrative procedure reform. Vietnam expects to trim down 30 percent of administrative procedures as well as fees involving administrative procedures. This move is regarded a breakthrough and necessity to improve the business environment.

 

Besides, at recent seminars, economic specialists urged continued investments for economic infrastructure development and speedier educational reform to create a high-quality human resource to meet the requirements of the economy in the upcoming time.

 

In the preparatory process for economic restructure, high quality human resources, efforts to improve business environment and economic infrastructure upgrading are fundamental requirements as they support Vietnamese enterprises during the restructuring process.

 

In Vietnam, leading State-owned enterprises, large private enterprises and foreign high-tech companies have invested in Vietnam but activities of these companies are limited to small areas. The spill-over effect of large companies’ technologies on small and medium-sized enterprises, FDI companies and domestic enterprises is humble; thus not benefiting the development of the entire economy. The linkage of enterprises will be a very important task in the time of national economic reshuffle and individual corporate restructure. To do so, this requires the orientation of the Government on the one hand and the role of business associations on the other. A supporting industry development strategy is also an important element to strengthen the linkage and this is also an orientation of the national economic restructure process to reach a higher position in the global value chain.