New jobs in the non-State sector accounted for only 26.1 per cent of the total in 2000 but now account for 60 per cent, according to Fulbright’s economic expert Huynh The Du. The contribution by the private sector (excluding households and individuals) to GDP, meanwhile, remains quite low, at only 10 per cent. “This rate is not as high as expected,” Mr. Du told the conference.
However, Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said the private sector is not only comprised of 700,000 registered enterprises but also includes household and individual enterprises and foreign-invested enterprises (FIEs), so the contribution actually stands at 61 per cent. When the private sector is defined in such broad terms, it plays an increasingly important role in Vietnam’s economy.
Moreover, Ms. Le Thi Nam Phuong, Deputy Chairman of the Vietnamese Young Entrepreneurs Council, said that if household and individual businesses were categorized separately, the country would misidentify a force that contributes to GDP and is in need of support. It is crucial for the government to place the private sector as the major force in the economy.
According to Dr. Loc, in developed economies such as the US, Japan, and Europe, small and micro enterprises are considered the backbone of the economy, and this should also be the case in Vietnam.
The private sector’s important role in the economy is beyond question, according to Dr. Tran Du Lich, a member of the Prime Minister’s Economic Advisory Group. Vietnam has been changing its growth strategy since 2016, setting a fast and sustainable growth target. This goes hand-in-hand with the growth of the private sector.
The private sector, he went on, could not operate without the State’s permission, and only since 2015 has it has been free to conduct business, when the new Law on Enterprise was introduced, but this still came with certain conditions. Private enterprises have been held back for such a long period of time they are unable to develop further.
