On the occasion of the Lunar New Year 2007, Vietnam Business Forum discussed with Mr. Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI), about the development of the Vietnamese business community, and VCCI contribution to this development.
How do you evaluate the quality and quantity of development among the Vietnamese business community and entrepreneurs in the past years?
The 10th Party Congress has decided to design and implement a national strategy for business development. The government has also set a target of 500,000 businesses by 2010. The correct and timely policy is to develop a strong force of businesses and entrepreneurs for economic integration. In the past years, due to the renovation policy, the Vietnamese business community has undergone vigorous development. Vietnam now has over 200,000 enterprises, growing by 40,000 enterprises a year, together with some three million registered business households.
Though most enterprises are small and medium sized, with few large and medium sized enterprises operating efficiently, Vietnam is developing groups and corporations, both State-owned and private. Even large companies are being transformed into multi-ownership organisations, allowing private sector investments. This orientation is crucial. While developing a bigger community of small and medium sized enterprises (SMEs), there must be large enterprises to serve as a network of pillars supporting all Vietnamese businesses.
Therefore, in the coming years, the mobilisation of State and private resources for the development of big economic centres is equally important, with the development of SMEs, to create jobs and increase GDP. To ensure strong, fast and sustainable development there must be big enterprises engaged in modern science and technology. In particular, big enterprises will create Vietnamese distribution networks in domestic and international markets.
Among three million registered business households, many are relatively large scale and operate as enterprises, if the government simplifies administrative formalities and applies suitable policies to encourage them, they may register and operate as enterprises. Consequently, the target of 500,000 enterprises by 2010 is within reach.
WTO membership will create both opportunities and challenges, what is your advice to the Vietnamese business community?
With WTO membership, Vietnamese businesses will have a larger potential scale of operation. They can access international resources with more credibility and without discrimination. At the same time, with lower material prices, they can reduce production costs and increase their competitiveness.
However, they will confront certain hurdles. First, enterprises accustomed to protection and tax privileges will face difficulties on a level playing field. Furthermore, they are also weak on understanding international law, trade barriers and market information. With WTO membership, Vietnam has a road map for improving the business environment and business conditions should become more predictable. Therefore, beside upgrading management, boosting development and applying new technology, they must build business culture and long-term business planning.
Human resources will also be a pressing issue. The Vietnamese labour market is young and big, but unskilled. The Vietnamese education system currently fails to meet market demand, with a serious shortage of high standard human resources. Trained workers make up only 30 per cent of the total. Vietnam lacks a skilled workforce for high technology and medium and high-level management. The fight for skilled workers will be very hard in the coming years. In such a fight, foreign enterprises with international experience, flexible salary systems and better business culture will be winners.
High technology and value-added services will generate more profit for the Vietnamese market. However, Vietnamese businesses are not strong in these fields. Those are opportunities for foreign businesses.
You have pointed out that information and labour are important, but also the weaknesses of Vietnamese businesses, how can VCCI assist businesses in those fields?
VCCI continues programmes assisting businesses in information. It has organized training courses to upgrade businesses knowledge on foreign markets, avoiding trade barriers, accessing new technology and business methods, and improving business management. In addition to direct training, we also provide businesses with information via our data bank and website, as well as CD’s and books. Those activities will be promoted in the coming years.
Regarding training, VCCI and the Ministry of Education and Training have signed, and will jointly implement an agreement promoting education reform in Vietnam, linking the actual demand of businesses with colleges and training schools. If successful, it will help graduates and trainees attain the knowledge and expertise enterprises really need, even without further training or re-training.
What are VCCI’s plans for the New Year?
We will step up many activities in the New Year such as developing the business community in both quality and quantity, promoting the establishment of business groups, training and assisting businesses with integration information, honouring and awarding high-performing businesses nationwide, promoting trade and investment, establishing business forums with important markets like the US and ASEAN, and organizing Vietnam Days in foreign countries.
We will also step up programmes and initiatives to increase business competitiveness. We will develop supporting services such as designing new products, quality management, R&D, distribution networks, supply chain management, etc.
VCCI will also focus on developing harmonious business relationship, reducing disputes between employers and employees. In coordination with related authorities, we will organize networks of employers within the framework of business associations. Together with related authorities, VCCI will enhance the role of labour unions at enterprises to find the causes of work strikes and ensure the interests of both employers and employees.
In particular, VCCI will focus on the government objectives to accelerate administrative reform and improve the business environment in Vietnam. VCCI will continue the analysis and evaluation of business environment at local levels so as to advise and assist in the improvement of administrative formalities and management at those localities. Based on those surveys, we will make annual reports on the development of the Vietnamese business community.
Reported by Nguyen Thoa
Vietnamese
