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Building faith in business

Recently, in Ho Chi Minh city, Prime Minister Nguyen Xuan Phuc chaired the Vietnam Enterprise conference 2016 with the topic “Vietnam enterprises – the motivation of national economic development”. The conference attracted over 10 thousand enterprises as well as leaders of departments in the whole country to join both online and offline.​


Understanding enterprises

At the conference, there were many ideas concerning about the business environment nowadays, which is the most important factor to help Vietnam to overcome the difficulties and take opportunities

Chairman of Vietnam Chamber of Commerce and Industry  (VCCI) – Mr. Vu Tien Loc said that in the past 15 years, Vietnam had 914 thousand new enterprises but to the end of 2015, there were only 513 thousand are still operating. More seriously, only 43% of those 513 thousand were having profit. In quarter I of 2016 alone, the number of enterprises which stopped operating and were dissolved increased 14% more than the last period. Although it was normal when an enterprise stop operating and to be dissolved   in the market economy but those numbers were not normal and they showed the difficulties in the business environment.
One of the reasons given by Mr. Vu Tien Loc is that the capital costs and tariffs are too high. “At the moment, costs and tariffs in Vietnam account for 40.8% of enterprises’ profit. This is the highest cost level in the region”. – said the chairman of VCCI
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Prime Minister Nguyen Xuan Phuc giving speech at the enterprises conference  
 
From the reality above, VCCI Chairman recommended the Government to promulgate a whole term resolution for the national action plan to develop enterprise. Accordingly, the next 5 years shall be determined to be the national enterprise startup years, 5 years for the whole nation to focus on developing enterprises, guarantee to complete 2 missions: to help enterprises strengthen their belief and lift up their spirit, recover from difficulties for further development.
Representative of Truong Hai Auto Company (THACO) – Mr, Tran Ba Duong suggested the government to be the effective assistants, the consumers to be the effective supervisors… to enhance economic development; in additional, enterprises shall actively integrate with ethics and dare to apply innovative technology.
 
 Ms. Mai Kieu Lien – Representative of Vinamilk Jsc. express: “The government shall consider the enterprises to be served, not to be managed”.
Another frequently discussed issue in the conference is “how to eliminate licenses for specialized operations” to simplify and standardize administrative procedures. Mentioning the integration situation odd Vietnam, the U.S., Japanese and Korean enterprise associations expressed their hope for the Vietnamese government to improve the competitiveness and business environment by strongly improve institution and administrative procedure reforms and ad the same time, apply global accounting standards. Agreeing with the idea, Mr. Tran Bac Ha – Chairman of the Managing Board of Bank for Investment and Development of Vietnam (BIDV) said that under the provision of laws, there shall only be one guiding decree, no additional circular as many licenses for specialized operation to  incur, causing difficulties on the enterprises.
 
 
VCCI recommended completing 2 urgent missions
 
Following the policy orientation for the next 5 years. VCCI recommended the government to focus on2 urgent missions: The first one is to have strict policy-administrative solutions to deeply reduce risks and costs, especially unofficial costs to remain enterprises’ safety and capability. The second one is to have complete market economic institutions with new motivations to solve difficulties and build comfortable business environment, helping enterprises to develop.
 
 
The government helps enterprises overcome difficulties
 
At the conference, all the ideas proposed by the enterprises were straightly, openly and responsibly answered by the government and Prime Minister Nguyen Xuan Phuc himself.
 
Confirming enterprises development to be the top priority, Mr. Nguyen Chi Dung – Minister of Ministry of Planning and Investment said, specific actions shall be made to solve difficulties and strongly facilitate the enterprises. The Ministry shall strongly implement new contents in the Law on Investment (Amendment) and Law on Enterprises (Amendment)  as well as in the  National Constitution 2013 on respecting everyone’s right in freedom of enterprise, following the idea: “Freedom in doing legal business for everyone”. 
 
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 The conference broadcasting venue from Dong Nai province, chaired by Mr. DInh Quoc Thai – Chairman of Dong Nai People’s Committee.
 
Answering all requests from enterprises about financing, Minister of Finance – Mr. Dinh Tien Dzung confirmed to improve finance effectiveness in stock market and insurance; to determine by 2020 to put Vietnam business environment and competitiveness on a par with the top 3 countries in ASEAN in some regular international targets such as: Tax payment time, customs clearance time reduction… The Ministry shall continue to have total review on tax payment rate in Vietnam to maintain equality, fairness and suitability comparing to the other countries in the region and worldwide. Mr. Le Minh Duc – Governor of the State Bank of Vietnam said that the Bank shall work with large commercial banks and Credits Operations to apply maximum reduction in managing costs, leading to interest rate reduction, facilitating enterprises in attracting capital. Besides, the State Bank shall maintain macroeconomic stabilization by stabilize the exchange rate and the foreign currency market, solve the bad debt issue, resulting in minimizing risks and costs for enterprises
 
 
 Strongly improving administrative procedure reform and enhance competitiveness are two vital factors, Minister of Industry and Trade – Mr. Tran Tuan Anh confirmed to try their best to facilitate the enterprises in solving administrative procedures which were under Ministry management; and to get advices from the Government to establish new policy frameworks meeting the integration demand.
 
Giving the conclusion speech at the conference, Prime Minister Nguyen Xuan Phuc admitted that the current business environment was still not convenient enough to help our country to develop. The law and legal document implementation was still having delay or unclear, causing difficulties on enterprises; no effective mechanism was made to encourage enterprises to thrust; too many unofficial fees and duplicated investigations…
 
 
About maintaining macroeconomic, Mr. Nguyen Xuan Phuc ordered all managers and operators to take all their responsibilities to serve people and enterprises. Local authorities shall frequently have conversations with local enterprises to identify and solve difficulties. Mr. Prime Minister also ordered to eliminate all inappropriate business regulations, including eliminating licenses for specialized operation, prohibiting any additional business regulations that are unauthorized or go against the provision of law.
 
10 solutions established by the Government for a more convenient institutions and business environment for all enterprises.
 
- The government shall protect enterprises’ legitimate rights, preserve the right of freedom of enterprises following the provision of laws. All enterprises shall have the right to run all kinds of business as long as they do not go against the laws.
 
- All kinds of enterprise with all shapes and sizes (except for some special kinds of enterprise such as price stabilization enterprises…) are equal in finding capitals, resources, lands, markets and business opportunities.
 
- The Government shall assure the policies durability so the enterprises and investors can feel safe to invest. Especially, The government shall maintain macroeconomic, assure a friendly, secure, safe and convenient environment to help enterprises develop.
 
- Shall each policy or legal document promulgated by State Management Agencies be specific to one topic, one responsible agency and the head of the agency shall always be responsible for his decision.
 
- All regulations about condition shall be quantified, transparent and easy to understand so that the investors and enterprises can evaluate their capabilities to meet the requirement with the least cost and legal risks in doing business.
 
- All the Government’s regulations shall be followed voluntarily by people and enterprises. The Government shall take responsibility for any difficulties incurred, considering the Government to be the assistants and serve people and enterprises responsibly
 
- Small and medium size enterprises shall play the important roles in offering jobs, raise the social income, especially,  be the motivation for revolution and creativities in the enterprise; and shall have private support policies to facilitate the enterprise in development and integration.
 
- With small and medium size enterprise accounting for 98% of all enterprises, Mr. Prime Minister stated that Vietnam Government’s leadership shall always consider private enterprises the motivations for economic development.
 
- Penalization in economic relations shall be effectively prevented to build trust in enterprises and investors. The Government, Ministry of Public Security shall not apply penalization in economic except for the seriously illegal situation, which shall be strictly prohibited
 
To the highly risky enterprises, public service enterprises (security and defense services) shall be managed with appropriate management mechanism.
- From reducing to completely eliminating all kinds of licenses for specialized operation and unreasonable costs. All decrees and Circulars shall be promulgate following Enterprises Laws and Laws of Investment; and the Prime Minister ordered to validate it from July 1st, 2016 and eliminate all regulations that go contrary to the new regulations ratified at the conference.
 
(Excerpt from Mr. Nguyen Xuan Phuc’s conclusion speech at the conference)
 
 
 
Anh Quang
 

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