Businesses’ fighting spirit has never been this low: economists

  • November 24, 2015

While Vietnam makes every effort to strive for trade liberalization internationally, it has limited liberalization internally, according to Pham Chi Lan, a renowned economist.

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Pham Chi Lan, a renowned economist.

Lan, who participated in a workshop on Vietnam’s joining the ASEAN Economic Community (AEC) held by CIEM some days ago, noted that more barriers to Vietnamese businesses have been erected, though the government has vowed to remove any obstacles that hinder business development.

“Vietnam spent many years trying to solve problems and remove barriers, but not many things have been done. The existing bottlenecks have not been removed, while new ones have appeared,” Lan commented on Bizlive.

The economist emphasized that the administrative procedures businesses have to follow in Vietnam are complicated and burdensome, while management agencies, with their power, can create difficulties for businesses.

Meanwhile, Vietnamese businesses have been burdened with heavy fees and charges. Citing the examples that an egg bears 14 types of fees and a pig bears 51 types of fees, Lan commented that businesses have to live in an environment with unfavorable conditions.

“Vietnam has been trying to cut tax to remove tariff barriers to goods from other countries when signing a series of free trade agreements (FTAs). However, it has created new barriers for domestic enterprises,” Lan said.

An analyst, agreeing with Lan, said he was worried about Vietnamese businesses’ integration capability, though a report says Vietnam ranks second in readiness for joining AEC.

He noted that state-owned enterprises (SOEs) have not shown their interest in integration. What SOEs are interested in is accessing ODA (official development assistance) from Japan and the EU.

Meanwhile, foreign invested enterprises (FIEs) have been taking the initiative in getting adapted to the new circumstances. Vietnamese private businesses still have not been interested in the issue, even though they have been warned that they will bear the most pressure.

The analyst said it is because 70 percent of Vietnamese small- and medium-sized enterprises do not export products; therefore, they do not feel hard pressure like export companies.

He went on to say that private businesses now have many problems to worry about in the immediate time, while they don’t have time to think about the problems that will arise in integration.

“They are meeting big difficulties every day because of the unfavorable business environment. And they are worried about the record high number of dissolved businesses,” he commented. 

Despite impressive economic growth figures, the number of dissolved businesses remained high in the first 10 months of the year.

A report from the Business Registration Administration showed that 7,641 businesses in the last 10 months fulfilled procedures to stop their operation.

Kim Chi


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