Private Sector Economy in Vietnam: Investing a Few Million USD Could Yield Billions USD

Private Sector Economy: A Key Growth Driver for Vietnam

The private sector economy in Vietnam has made significant contributions to the nation’s development, accounting for over 60% of total social investment. Despite starting with an investment of just a few million USD, businesses in this sector have the potential to generate billions in returns due to the rapid growth of industries, exports, and technology in Vietnam.

Engineers operate advanced machinery at a modern manufacturing plant, exemplifying the national enterprise's commitment to nurturing the growth of smaller businesses through innovation and support.

Opportunities and Potential in the Private Sector

According to experts, investing in Vietnam’s private sector offers an attractive opportunity for high returns. With just a few million USD invested, investors can see returns of billions due to the robust development of various sectors such as technology, exports, and manufacturing.

Key Investment Opportunities:

1. Technology and Innovation: Domestic technology companies in Vietnam are growing rapidly, offering vast potential for investors.

2. Exports and International Trade: Vietnam, with its strategic position as a major manufacturing hub in Southeast Asia, continues to be a prime destination for global investment.

3. Agriculture and Manufacturing: The agricultural and manufacturing sectors in Vietnam are undergoing significant transformations, thanks to the adoption of technology and improvements in labor productivity.

   
   

The Importance of Policy Support for the Private Sector

However, the private sector still faces several challenges, particularly in terms of policy and legal frameworks. While Vietnamese entrepreneurs are passionate and ambitious, they need favorable conditions from the government to develop their businesses.

Associate Professor Dr. Trần Hoàng Ngân discusses the pivotal impact of the private economic sector, emphasizing its contribution of 60% to total social investment capital.

Challenges and Solutions:

• Legal Constraints: While Vietnam has made many improvements in its legal environment, current regulations still fail to create sufficient incentives for sustainable business growth. Many of these regulations focus more on control rather than fostering innovation and growth.

• Policy Improvement Needed: Some policies, although seemingly supportive, still lack implementation in practice. Businesses need actual, tangible support from the government, not just promises on paper.

Strategic Long-Term Vision for Private Sector Development

Experts, including Professor Vũ Minh Khương from the National University of Singapore, emphasize the importance of a long-term strategic vision for the growth of the private sector. This vision should include clear goals for 2030-2045, focusing on:

• Industrial transformation: Focusing on breakthrough sectors such as technology, creativity, and innovation.

• Shifting from small-scale production to cooperative models: Creating cooperatives and consortiums will help address fragmentation and encourage participation in global supply chains.

Ms. Lý Kim Chi emphasizes the role of policies in advancing the private sector during a conference discussion.

What Do Vietnamese Businesses Need?

Lý Kim Chi, Chairwoman of the Food and Beverage Association in Ho Chi Minh City, affirmed that when the Party and Government introduce policies to support the private sector, the business community is optimistic and expects these policies to have positive results.

However, for policies to be effective, businesses must feel real, practical support from the authorities, not just administrative paperwork. Recently, the Prime Minister instructed a 30% reduction in administrative procedures, but some ministries still create regulations that increase costs and bureaucratic hurdles for businesses.

Transforming Individual Businesses into Enterprises

Currently, Ho Chi Minh City has about 400,000 individual businesses, with over 20,000 running effectively and sustainably for decades. If these businesses are supported and encouraged to transition into formal enterprises, with better connection mechanisms, the city will have a robust business force. For other regions where individual businesses are not as strong as in Ho Chi Minh City, cooperatives and business groups can help reduce fragmentation and encourage more active participation in supply chains.

Conclusion: The Huge Potential of Vietnam’s Private Sector

Vietnam’s private sector is opening up vast opportunities for investors, where a small investment of a few million USD can yield billions in returns from the growth of this sector. However, to unlock its full potential, Vietnam needs to improve its policy environment and create favorable conditions for private sector development and global integration.

The private sector’s development will not only contribute to economic growth but will also create jobs and play a vital role in the country’s fiscal development. Along with the growth of technology and industries, the private sector will continue to be a key driver for sustainable economic prosperity in Vietnam.

Source: tienphong.vn