Some light amid the economic gloom

You say you are confident that Vietnam’s business environment is improving. What are factors behind the confidence?

In the year ending May, the number of new business setups rose 5 per cent against the same period in 2012. This is also the first time there was a hike in new business setups since early 2013.

Also in May, there were only 570 businesses going dissolved and 3,020 businesses facing cessations in operations, down 27 per cent and 15 per cent against those in April, respectively.

In addition, in the past month more than 500 businesses temporarily halting operations resumed operations, hiking the number of businesses coming back into operations from early 2013 until present to 8,792 units.

Albeit there were still modest numbers of new business setups and those resuming operations, these were initial positive signs reflecting that businesses regain faith into future development.

Is there a deeper meaning to this data?

These figures were meaningful in current context if more careful analyses were taken.

Accordingly, new business setups were shed 14 per cent on-year in the first three months of 2013, it was down slightly only (1.2 per cent) in the first four months and hiked around 5 per cent in the first five months over corresponding period in 2012.

Similarly, the number of businesses temporarily halting operations jumped more than 26 per cent on-year in the first three years. It hiked nearly 17 per cent in the first four months and only rose 13 per cent in the first five months of the year.

But businesses coming back into operations decreased in number in May compared to April. True?

According to government figures reported to the National Assembly during the on-going session, around 8,300 businesses temporarily halting operations in 2012 had come back into operations in the first four months of 2013, averaging 2,000 units a month, quadruple the number of firms resuming operations in May.

It is encouraging that there were a large number of processing and manufacturing businesses coming back into operations.

Does this mean the government measures for market support set in Resolution 02/NQ-CP began to work?

Government measures set in Resolution 02/NQ-CP were to hike the confidence of the business community into the market and the management of the government, diverse state agencies and localities.

These measures were fairly comprehensive and set in a timely manner. However, their slow enforcement in the first three months had influenced enterprises’ confidence.

This slow implementation had one objective reason that the traditional Lunar New Year (Tet) fell in February, so that production and business was almost delayed this month due to long Tet holiday.

Enforcement has proven effective since March which led to improved confidence of the business community, cultivate the hope we would be in a position to successfully implement the targets set in national socioeconomic development plan this year and in the forthcoming years.

To solidify confidence of businesses, from now until the year end instead of setting new measures we must concentrate efforts into handing wide ranging measures set in Resolution 02/NQ-CP to maximise efficiency.