According to the Vietnam Chamber of Commerce and Industry (VCCI) report for 2012 the country remained lacking in large and medium-sized enterprises, causing possible difficulties for the economy.
Small businesses remain small
The general secretary of the VCCI, Pham Thi Thu Hang, said that over the last decade 700,000 companies were granted business licenses, but the number of those that have remained in operation was modest. They estimate the number to be around 300,000.
“The number of very small enterprises in the economy is on the increase, causing the country to fall short of targets for medium and large businesses," Hang said.
The report also revealed that two thirds of very small businesses surveyed did not expand between 2002 and 2011, and 30% of the remaining companies had even made cutbacks. A significant amount also laid off employees.
The number of companies that were unprofitable did increase; 30.2% of enterprises were unprofitable in 2006, a figure which rose to 42% in 2011.
Many have blamed the government's lack of incentive policies for disappointing numbers in the lack of businesses expansion.
"If I were eligible to get government subsidised loans, I would expand my business and even hire more people," said the owner of an electric cable company in Hanoi.
Vu Quoc Tuan, former member of the government’s Research Committee, agreed, saying that small and medium-sized enterprises have not received due attention from the government.
“These companies often lack capital and need incentive policies for low interest loans. But the Credit Guarantee Fund has only just been set up, and only in 13 locations. In addition, most of them are not even in operation yet. Despite repeated requests from the business community the government has not decided on the proposed cut to the income tax rate," Tuan said.
He added that policy that would help small and medium-sized enterprises deal with their obstacles is needed.
