Developing the Private Economy – A Driver of Sustainable Growth

Recognizing this, the leadership of the Communist Party and the State has issued numerous directives to create favorable conditions for the private sector while eliminating prejudices that hinder its growth. However, for this sector to truly become a driving force for economic growth, stronger and more synchronized solutions are needed, from policy formulation to practical implementation.

The Role of the Private Economy in the National Economy

The private economy accounts for a significant proportion of Vietnam’s GDP, contributing approximately 42-45%, with a rising trend. According to reports from the General Statistics Office, the private sector generates over 85% of jobs in the economy, playing a crucial role in raising incomes and ensuring social stability.

The flexibility and adaptability of private enterprises have enabled Vietnam’s economy to overcome multiple challenges in the face of globalization and international competition. Particularly in the post-COVID-19 era, private enterprises have demonstrated impressive resilience, making significant contributions to the country’s economic recovery.

Challenges Facing the Private Economy

Despite its crucial contributions, the private economy still encounters major challenges:

Small-scale enterprises with limited access to capital
Most private enterprises in Vietnam are still small or medium-sized, with limited access to financial resources. According to data from the State Bank of Vietnam, only about 30% of private enterprises can easily access bank loans, while the majority struggle due to a lack of collateral or failure to meet lending requirements.

A business environment that remains challenging
Although the government has implemented numerous administrative reforms, legal and regulatory barriers still exist, making it difficult for private enterprises to operate. Issues related to taxation, business registration, land access, and licensing procedures remain persistent obstacles.

Lingering prejudices against the private sector
General Secretary To Lam recently emphasized that it is essential to change perceptions and eliminate all biases against private enterprises to create a truly favorable environment for their growth. However, private enterprises still face challenges in competing with state-owned enterprises and foreign-invested enterprises (FDI), which often receive more favorable treatment in terms of policy support.

Solutions to Promote Private Economic Development

To make the private economy a true engine of growth, comprehensive solutions from multiple stakeholders are necessary:

Improving the business environment
The government must continue to streamline administrative procedures, eliminate unnecessary regulations, and create a more business-friendly environment. Enhancing transparency in taxation, land access, and intellectual property rights protection will ensure a fair and efficient business climate.

Easier access to capital
The State Bank of Vietnam and financial institutions should implement specialized credit programs for private enterprises, particularly SMEs. Additionally, expanding capital markets and developing the stock market can provide private enterprises with alternative financing options beyond traditional bank loans.

Enhancing competitiveness through technology and innovation
Private enterprises must focus on adopting advanced technologies, improving productivity, and integrating into global value chains. Collaborating with foreign enterprises, investing in R&D, and improving product quality to meet international standards are crucial strategies for long-term competitiveness.

Government support for workforce training and digital transformation
The government should introduce policies that support private enterprises in workforce training, digital transformation, and management capacity building to enhance overall efficiency and competitiveness.

Conclusion

Achieving this requires close cooperation between the government, businesses, and economic support organizations. A transparent, fair, and open business environment will enable private enterprises to reach their full potential and become the driving force of Vietnam’s economy in the years to come.