Administrative reform first on companies’ list

What is the business community expecting from the upcoming meeting with the PM?

The business community’s hope lies in the name of the meeting itself—“Vietnamese companies, drivers of growth.” We believe that the government aims to make Vietnamese companies the drivers of growth in the next five years. But it is not easy to achieve this aim.

The old administration had big plans to increase the companies’ competitiveness and improve the business environment. However, as of now, Vietnamese companies are still encountering a lot of difficulties.

Only when the Vietnamese government will strive to be just as competitive as the governments of other member states of the trade pacts that Vietnam has joined will Vietnamese companies be competing on even ground with their foreign counterparts.

VCCI is going to submit a proposal to the PM on a national programme on developing companies. What will this programme include?

The priority remains reforming administrative procedures. Vietnamese companies can only play the same game as international companies when the domestic business environment proves equal to the world’s, with administrative procedures that meet world standards. Vietnamese companies cannot compete when they have to keep up with complicated, opaque, and costly administrative procedures.

The second goal is to decrease the cost of doing business in Vietnam. Domestic companies are subject to a lot more fees than their regional competitors. They cannot make big investments. Instead, they have to strive for quick and high profit, which is a more risky endeavour.

Third is to decrease the cost of financing. The current interest rates imposed on companies have all previous bad debts factored in—ad debts that banks incurred earlier while dealing with companies that operated inefficiently.

It is unfair when new companies, mostly small and medium in size, have to pay for the mistakes of companies that have long gone bankrupt, those operating inefficiently, and the bad lending decisions banks made in the past. There must be some way to resolve the bad debts immediately, instead of letting it build up like this.

So you intend to keep administrative reforms a priority?

There needs to be major change. The government should make it so that all administrative procedures truly reflect the spirit of the Constitution, the Law on Investment, and the Law on Entreprises, that “people and businesses are free to conduct business in all areas not prohibited by laws.”

The government should do good on its commitments in Resolution 19/NQ-CP, so that Vietnam can reach the standard of ASEAN members, and then countries in the Trans-Pacific Partnership. The government has to devise a roadmap of the process of improving the business environment, reforming administrative procedures, and enhancing national competitiveness, as well as set quantitative goals to meet.

We will ask that this programme be forwarded to the National Assembly, to increase the NA’s role in supervising and pushing the administrative reform process.

In short, companies need concrete actions that are consistent with the spirit PM Phuc talked about, which is to make companies the drivers of growth. If we have a good plan but the people who implement it fall short in efficacy or enthusiasm, then we will not get the desired results.

How about the goal of having 1.5 million-2 million companies in 2020 that VCCI often mentioned?

This goal is not out of Vietnam’s reach. At the moment, we have about 4.6 million households doing business. If we can get one quarter of these to register, we would have a sizable number of businesses. But the important thing is that the government should make procedures easy for these informal companies. If we can achieve this, the Vietnamese business environment will become more transparent and meet world standards.

There should also be policies to encourage companies to cooperate or merge. This is how small and medium-sized companies can compete.

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