Truong Chi Trung, the Deputy Minister of Finance, said Viet Nam has an excellent opportunity to examine its economic mechanism
The ministry received some 65 petitions during the annual meeting between the Prime Minister and the business community and another 120 petitions from enterprises. We have selected and divided them into several main categories.
In terms of finance, there are four leading issues:
First, with regard to prices for land compensation, many enterprises want price increases while others demand the opposite.
As directed by the Government, the ministry is drafting a document to guide the new Land Laws. This will give enterprises land for production and also ensure the rights of people who lose their land due to relocation.
Second, the ministry will try to strengthen the capital market in order to diversify capital as well as to provide businesses with more funding for short and long term investment.
But enterprises should know that the demand for investment is so much that the State will have difficulty distributing enough capital. Many enterprises will need to acquire capital from other financial sources.
Third, we should find solutions for dealing with the bad loans owed from industry and business. Some credit organisations suggest that we establish a preventive fund for the risky situations.
The ministry said it will co-operate with the State bank on this matter. We will reconsider and correct some documents. However, we have to think about how much should be extracted for the fund. If we extract too much, there won’t be enough left for funding enterprises. Besides, we still don’t have an auditing system to meet international demand.
Finally, many enterprises that are not run by the state ask for investment incentive capital while this money tends to be used for subsidised projects in certain regions.
However, we also must consider that certain industries, like pineapple growing and agricultural processing, could benefit from more capital.
Many enterprises also complain about tax and customs requirements.They dislike the complicated procedures and policies and blame them for interrupting their more immediate and relevant work.
Enterprises also criticise the overlapping bureaucracies between various Government agencies which they say makes their work more complicated.
The ministry will work to clear up the policies and apply them to all the enterprises without discriminating. We will also try to fix and unify the tax system.
Tran Vinh Hai, President of Hai Khanh International Deliver, Receive and Transport Joint Stock Company’s management board,
said the state should create better conditions for the private enterprises.
The Government has issued many policies to benefit enterprises in the past few years, but some of these policies haven’t reached us in time. This creates a bad situation for private business.
In addition, some authorities look more discriminatingly at private enterprises like us, which causes more difficulties for our operations.
For example, credit organisations pay very little attention to us, and they often underevaluate our collaterals (it often does not exceed 50 per cent of its value) while the tax, customs offices and police are more caution when dealing with us.
The Government should issue more rules to help eliminate discrimination against private enterprises. The state should provide more favourable conditions for helping private enterprises conduct business.
Society and public opinion should also praise private enterprises for their success. If these conditions were met, private businesses could do a great deal to help improve Viet Nam.
Atsushi Mise, president of the Japanese Business Association in Viet Nam,said the country should find ways to attract investment.
The Vietnamese Government has to provide good management for industries and train businessmen, while also moving the economy toward a market-based system.
Japanese investors now confirm that Viet Nam is a key market in which to invest. We used to pay too much attention to the Chinese market, which is not an appropriate strategy for long-term investors who should seek to mitigate risks.
We expect the State to create an effective legal system, as well as good infrastructure, to attract Japanese investors from the Chinese market. These reforms should include changes in transportation and input expenses.
In 2006, the economic corridor between Thailand, China and Viet Nam will initially set Viet Nam in a good position to benefit foreign investors. Viet Nam’s advantageous geographic position could make it the transportation key to the entire region.
In addition, the Vietnamese Government should create more incentives for foreign investors to compete with other countries in the region. If the country could meet such demands, it could become an ideal place for investors.
Nguyen Toan Thang, president of the management board for the Fruit, Vegetables and Agriculture Products Corporation, said Viet Nam’s commercial difficulties are the result of poor policy making.
In the process of agricultural product development, some projects are drawn badly and are major obstructions to development.
My corporation, for example, was merged from two corporations in 2003 with a system of subsidiaries and parent companies. At that time, we found that it wasn’t easy to unite an entire corporation. There are five companies that have hardly changed because they are all pineapple processing companies and they lack materials. They can process at only 10-15 per cent of the company’s planned capacity.
Vietnam Economic Review - (01/11/2004)