Part 5: Sustainable and effective development of private economic sector

Part 4: Private economic sector makes more important contribution

Over the past years, the private economic sector in Binh Duong has been developed strongly, contributing significantly to the province's socio-economic development and renovation. In the coming time, Binh Duong will continue to reform the administration and increase support and create favorable conditions for private enterprises to develop effectively and sustainably.

Economic development leverage

Along with the dynamic development of the economy of the province in general, the operation of the private economy has been continuously expanded, of which the private enterprises have had strong development in quantity and diversity in the industry as well as in executive management. Private enterprises in the province have made great contributions to the socio-economic development of the province.

According to the Department of Planning and Investment, since the beginning of the year, the province has attracted VND 20,802 billion of business registration capital of domestic enterprises, an increase of 39.7% over the same period in 2016. Of these, 2,527 are newly registered enterprises, 469 with capital increment. So far, the province has 28,075 domestic enterprises registered for business operations with a total registered capital of VND 211,478 billion. Since the beginning of the year, the province has attracted more than US$ 1.7 billion, accounting for 119.4% of the plan in 2017. Of these, the first 90 projects newly invested with US$ 1.01 billion, 46 projects adjusted for capital increment of US$ 651 million. Up to date, the province has 2,939 FDI enterprises with a total registered capital of US$ 27.43 billion.

Private economy in Binh Duong Province is effectively developed. In this photo: Production of power generator at Sang Ban Mai JSC is on-going. Photo: Xuan Thi

To continue attracting investment from various economic sectors, including the private economic sector, Binh Duong province has issued the program and plan on renewing investment attraction in the period of 2016-2020 across the province, altogether with that, well tasks and solutions have implemented to improve business investment environment and reform investment procedures and support of start-up businesses. One of the highlights of Binh Duong province in attracting investment from investors is the index of competitiveness, the province's administrative reform. In the spirit of companion with enterprises, Binh Duong has recently implemented a number of support measures, including the implementation of the "one-stop shop" coordination mechanism; developing policies to support flexible investors, reforming administrative procedures; creating a business environment, investment ventilation etc. Thereon, the procedures are resolved quickly in transparency under the one-stop mechanism for investors.

According to many investors, these solutions are a prerequisite for Binh Duong to continue to create favorable conditions, openness and transparency, and to help the private sector to develop more strongly in the future. Binh Duong is becoming a pole of investment attraction in the eyes of domestic and foreign investors. Thus, billions of US dollars has been poured into Binh Duong, creating abundant capital flows to the province's economic development.

More measures needed

Binh Duong's breakthrough success is the shift of the economic structure in the right direction and the choice of industrial development to spur economic development, including the consideration of private and FDI enterprises as players of economic growth. The lasting solution for this strategy is that the province has built up 28 industrial parks as leverage for development. Up to date, Binh Duong has attracted a series of large-scale projects, gradually entering the global supplying chain.

Looking back on the pathway of private economic sector development in the province in recent years, despite the strong development, businesses in the province still face many difficulties and are in need of more attention and support from all agencies and sectors. Weaknesses of private enterprise in Binh Duong can be seen as a strong increase in number not in the size of enterprises as small and medium ones. Some enterprises were born in the short term due to lack of capital, technology and strategic vision for business development.

According to many experts, nowadays, the majority of private enterprises in the province are of small scale, mainly household businesses of low technological level, governance, financial capacity, product quality and competitiveness. The structure of the industry is unreasonable, lacking of linkage with other economic sectors. These enterprises also have difficulties in accessing loans for most of them have not enjoyed preferential tariff for FDI enterprises do under the fierce competition from FDI enterprises.

Tran Thanh Trong, Vice Chairman of Binh Duong Business Federation, said that the Resolution of the 5^th Plenum of the Central Committee of the Communist Party of Vietnam in the 12^th tenure on the development of the private economy was considered to be dynamically as the new force for development, showing the fact that the role of the private sector is being recognized and placed in a position of merit. The current issue is to quickly concretize the mechanisms and policies set out in this resolution, such as land policy, financial and credit policies, support policy on training, science and technology, Labor policy, salary and support for information, trade promotion and so on.

According to Trong, the private economic sector and enterprises play such an important role, but policy makers and managers, in their perception and practice, are not aware of such role. And, they have not come up with the right solutions to create a strong driving force for economic development. The business environment is not favorable for the private economic sector to develop. Therefore, in the coming time, Binh Duong should pay attention to more support and help private enterprises so that they shall be really developed as expected.

Next: Part 6: Starting-up movement promoted

Reported by Khanh Vinh – Translated by Vi Bao