Not Giving Way to Difficulties

A business leader can usually be compared to a soldier. When the economic downturn worsened in the past year, these business leaders have successfully led their ships of business out of the devastating storm to enter the ocean of integration and success.

Amid difficulties caused by the global financial and economic crisis on the Vietnamese economy, the

Vietnamese business community suffered substantial impacts. Exports slumped as demand shrank in importing markets and governments of many countries adopted trade remedy policies to protect their domestic production while foreign low-priced products increased their presence on the local market. Prices of inputs like electricity, gas, oil and coal were volatile, the stock market plunged steeply and real estate market was freezing. Many foreign investment funds withdrew their capital from the Vietnamese market. As a result, companies had to cut jobs and scale down production and many, especially SMEs, did not have enough work or fell into stagnation. Until now, there is no accurate number of collapsed companies in the wake of economic crisis, but according to a report sent to the National Assembly in late June 2009 by the Ministry of Planning and Investment, the country had about 2,500 companies dissolved (an average of 450 companies collapsed each month). In addition to economic losses incurred by the business community is social subsequence caused by economic crisis like layoffs that lead to an increase of poorer people and tax revenue reduction budget revenue that will affect public investment.

 

However, the macroeconomic picture is not completely dark. The Vietnamese economy was directly affected by global world but it only declined, not falling into recession as other countries, and still maintained positive growth before surging in the last months of the year. But, importantly, in the context of economic recession, the business community never retreated but grew up. In particular, in 2009, over 83,000 new enterprises were set up, representing a rise of 28.3 % over 2008. And, with this growth, Vietnam is expected to have 540,000 companies by 2010, over 8 % higher than the initial target of 500,000. Most enterprises have passed the most difficult period and started scaling up production. Labour shortage has happened to many industrial parks.

 

To obtain this result, the business community, apart from its own efforts, activeness and creativeness, has received enormous supports from the Government through the stimulus package worth up to US$8 billion, together with a number of macro policies. In addition, the economic crisis not only brought about adverse effects but also good opportunities for many companies. Many took advantage of excess production in other nations to purchase cheap materials, technologies and equipment. At the same time, the economic difficulty was also a chance for enterprises to restructure their operating apparatus, improve the quality of human resources and map out suitable strategies for the new condition.

The Vietnam Chamber of Commerce and Industry (VCCI) - a national organisation representing and supporting the business community - always doubles its effort to help the business community overcome difficulties. Last year, VCCI actively participated in lawmaking process, being a member in seven law-drafting committees and a member in legal document editing committees and sending 45 direct comments to lawmakers. In addition, VCCI held 230 conferences and seminars to seek comments on policy and legislation from nearly 40,000 attending businesses, (a rise of 13 % in meetings and 33.3 % in attendance in comparison with 2008).

 

VCCI continued joining efforts to improve the business environment. The survey for provincial competitiveness index (PCI) continues to attract the great interest of the business community, government agencies, local authorities and the society. The PCI is built on 10,000 surveys with 44,000 businesses under diverse forms and insight study in 360 enterprises to build database. VCCI basically completed the attention-grabbing PCI 2009 Report.

 

In addition, VCCI actively participated in public administration reform, especially the reform of administrative procedures; continued to maintain the dialogue mechanism between businesses and government agencies, for example, coordinating with the Ministry of Finance, the General Department of Taxation, the General Department of Customs to open conferences and dialogues with enterprises on tax and customs procedure reforms, working with the State Bank of Vietnam to host the dialogue conference with businesses on removing obstacles in the bank-business relationship after the government launched policies to support interest rates.

 

In 2009, VCCI received 310 visiting delegations with 12,360 enterprises (up 3 % in events and 19 % in attendance compared with 2008), and organised 95 delegations wit 5,200 Vietnamese to visit foreign nations (up 22 % in events and 8.3 % in attendance from 2008) to attend international conferences, market surveys and trade fairs, including the large-scale accompanying to State and Party leaders, for example, businesses convoying the State President attend to the 64^th UN General Assembly and to visit Cuba, Chile, Spain, Italy and Slovakia; delegations accompanying the Prime Minister to visit United Arab Emirates, Qatar, Kuwait, China, South Korea, Kazakhstan, Denmark and Hungary. Many business contracts worth billions of US dollars were signed during and after these official visits.

 

Besides, VCCI held nearly 500 seminars, conferences, discussions, business match meetings for more than 75,000 Vietnamese and international enterprises (up 16.3 % in events and 56 % in attendance from 2008) to support enterprises to approach market, find partners and access business and investment opportunities; hosted 11 exhibitions in the country with 2,600 attending enterprises.

 

Specifically, in a response to the government’s appeal for business support, VCCI has stopped collecting fees for C/O from March 1, 2009 but the quality of C/O certification is always improving and more professional. In 2009, VCCI issued 498,300 certificates of origin (C/O) for exported goods, down 9 % from 2008 - a result of declining export or some enterprises applied for certificates from the Ministry of Industry and Trade).

 

VCCI said Vietnamese business forums received strong supports from government agencies and enterprises because of its high effect. Besides, forums were also incorporated with symposiums on business development and market penetration guide. Business forums helped enterprises to have a direct channel to exchange information with foreign business communities. This form of communication is rated an effective general investment and trade promotion model.

 

However, despite many efforts, VCCI still had many shortcomings in its activities. For instance, it lacks national-scaled programmes or projects to support businesses to develop resources, restructure and deepen international economic integration. Its activities were improved but the quality was not always satisfied.

On the other hand, limited resources and insufficient infrastructure caused more difficulties for VCCI as workload increased steadily, especially after implementing the free C/O policy. Many programmes and projects depend on assured financial resources, thus not creating the activeness in implanting these programmes and projects. The network of collaborators is also thin and unprofessional while it is not easy to find capable and experienced experts.

 

2010 is the last year of the five-year socioeconomic development plan from 2006 to 2010; so, this year will be a year of decisive significance for the completion or excess of socioeconomic development targets and perfection of personnel apparatus at all government levels. The degree of completion will lay the groundwork for governments of all tiers to map out the next five-year socioeconomic development plan. Before this opportunity and, maybe, a challenge, activities of VCCI in 2010 will focus on improving the business environment, especially at local levels, to support businesses to restructure, provide information and training for enterprises basing on current international development trend, enhance internal management capacity, develop human resources, renovate technologies, build and develop corporate trademarks.

 

Notably, in 2010, VCCI will complete the draft scheme and resolution on Vietnam Entrepreneurs with the content focusing on “Promoting the role of Vietnamese entrepreneurs in the process of industrialisation, modernisation and international integration” to submit to the Politburo; build and organise the execution of action plans of VCCI and the business community when the scheme and resolution are adopted. This is considered the most important task of VCCI in 2010 and in the following years.

 

Besides, VCCI will continue to maintain and promote activities of business forums and established business councils (China, Africa, Japan, EU, US, Russia, Ireland and ASEAN); set up and implement activities Vietnam - India Business Forum, Vietnam - GMS Business Forum and launch Vietnam - US and Vietnam - Russia e-commerce portals. It will propose the Government a scheme to organise regional economic forums like the northern coastal economic forum, northwest economic forum, central economic forum, Central Highland economic forum, Mekong Delta economic forum, etc.

 

At the same time, VCCI will organise events on the occasion of Vietnam’s takeover of ASEAN Presidency; VCCI’s undertaking of ASEAN CCI like ASEAN BIS 2010, ASEAN BAC Dialogue with ASEAN Leaders ASEAN Business Award (ABA), etc.