Newly ratified SME support law expected to boost economy

The National Assembly has officially ratified the Law on Support for Small and Medium-sized Enterprises

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During the past days, the NA added to the draft composed by the Ministry of Planning and Investment a few points regarding the subject of support, criteria to identify SMEs, resources for support, and the role of funds.

The law is going to be effective from January 1, 2018. SMEs now account for over 95 per cent of the number of companies in Vietnam. The law is expected to push the growth of the Vietnamese private sector in order to meet the target of one million operating companies in 2020.

Minister of Planning and Investment Nguyen Chi Dung earlier said that the law was designed carefully based on the needs of SMEs and that it is a “transformation” in the spirit of the government, from seeing companies as subjects to be controlled and managed to becoming the subject and serve in order to grow together.

At the question and answer session with the NA regarding the socioeconomic situation of Vietnam in 2017, on June 9, Minister Dung said the government is determined to meet the target of 6.7 per cent GDP growth this year, and the only way “is to take advantage of all the potential and opportunities available,” as the government is committed not to pursue growth at all cost or to exchange the environment or macroeconomic stability for growth.

The minister said that this year the global as well as domestic economic backdrop has improved compared to last year. The weather was better, pushing a recovery in agricultural production, enabling the sector to grow by 3.05 per cent this year. Meanwhile, manufacturing and processing may grow by 13 per cent, services by 7.79 per cent, exports by 10 per cent, and domestic consumption by 10 per cent.

“These are the basis for the 6.7 per cent growth rate,” Dung said, adding that other bases are the key projects being accelerated, public and private investments, as well as official development assistance (ODA) and foreign direct investment that are being disbursed fast.

The prime minister issued Directive 24/CT-TTg dated June 2, 2017 detailing solutions to push economic growth in two groups (long- and short-term solutions). The long-term solutions focus on macroeconomic stability, controlling inflation, restructuring the economy, reforming the administration, and increasing productivity, as well as expanding both the domestic and international markets.

The short-term solutions focus on removing difficulties that companies are encountering when doing business and accelerating the disbursement of investment capital.