The Prime Minister’s Meeting with Business 2016, themed “Vietnam businesses - Nation’s motivation for economic development” and slated for opening on April 29, is a governmental message on providing the most favourable conditions for starting a business, doing business and promoting business development in both quality and quantity. On this occasion, Vietnam Business Forum has an interview with Mr Pham Viet Khoa, President of Fecon Foundation Engineering and Underground Construction Joint Stock Company. Le Sang reports.
In the spirit of making Vietnam a haven of business start-ups, you have led FECON from its very starting steps (June 2004) to the present position. Could you please share FECON’s entrepreneurship lesson?
My friends and I established FECON in 2004. At that time, we gave up official positions in the State administration apparatus with stable incomes to set up a business. Our most valuable capital at that time was knowledge learned at school and six years of experience with construction work.
With the thinking that a house had to be built from the foundation, we decided to engage in foundation construction. We also determined that we did not undertake separate products or services as most companies were doing but we chose to provide solution packages for ground and foundation, from surveying, testing, designing and production to construction, monitoring, ground and foundation maintenance. After more than 10 years of business with a lot of difficulties and challenges to overcome, particularly in during economic slowdown in 2008 - 2009, we proved that the deep specialisation in the industry is one of important factors for FECON to pass through the rough storm.
According to the General Statistics Office (GSO), over 20,000 companies had to suspend operations or dissolve in the first quarter of 2016, equal to 84 per cent of new start-ups in the period. According to Dr Nguyen Dinh Cung, Chairman of Central Institute for Economic Management (CIEM), this situation was not normal. How do you think about this?
2016 started with certain difficulties since the world was faced with security uncertainty, migration crisis in Europe and slowing growth of some major economies. Meanwhile, Vietnam has joined various free trade agreements and the competition is becoming fiercer and fiercer when they are not actually ready for broad integration and our labour productivity is still low.
Rising corporate bankruptcies show that, in addition to general economic difficulties, our environment for business has not improved, including heavy tax and fee burdens; market demands for products and services is volatile; the business climate is not stable; administrative procedures are cumbersome; and access to financial services is hard. Hence, I hope that the government will have stronger moves in support of the business, particularly in finance, production space, business market stability, and information transparency for enterprises to develop.
As for businesses, I think we need to prepare appropriate business strategies, define key business scopes, improve corporate governance and prepare human resources to confront difficulties.
From the perspective of business, what do you expect from the new government?
With the new enthusiastic, dynamic and engaging government, like many other companies, we very much expect robust economic growth where the business community plays an important role.
In the inaugural speech of the Prime Minister, we have seen a good sign with the message “We cannot let enterprises be exhausted.” I hope that this will be expressed strongly by action in the near future. And, the Government will listen to what enterprises say, create a fair environment for all businesses, have clear specific policies and preferences, and support them to deal with emerging issues.
Many free trade agreements will go into force during the term of this government. This progress will require institutional and regulatory adaptations as well as appropriate development orientations. I hope that the Government will create breakthroughs for the business and investment environment in Vietnam.
Do you have any ideas to share on this occasion?
Business start-up is a long-term important movement of the economy since the business community shapes the economy. For that reason, to develop the economy strongly and sustainably, expanding the business community is a prerequisite task of the whole society.
In my opinion, start-ups will need sufficient policy information concerning business and investment activities, especially policies in support of small and medium enterprises in rural areas or agricultural enterprises. Besides, they also need support in industry development strategies and corporate governance from well-reputed organisations.
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