Vietnam considers the success of foreign direct investment (FDI) businesses as its own success, and in return, its hopes that FDI businesses will consider the success of the country’s businesses and economy in general as theirs, Deputy Prime Minister Vuong Dinh Hue told the Midterm Vietnam Business Forum (VBF) in Hanoi on June 16.

Vietnam’s industrialization process is heavily dependent on foreign investment, he said, but the FDI sector is not closely linked to the national economy.

Meanwhile, he went on, poor access to credit among small and medium-sized enterprises (SMEs), in addition to inhibiting individual business development, also presents obstacles for broader economic growth, given that 95 per cent of all registered enterprises in Vietnam are small businesses and account for an estimated 40 per cent of GDP and just over half of all employment.

Deputy PM Vuong Dinh Hue (middle) at the event. Source: 

“Vietnam will have a policy to successfully link the FDI and domestic business sectors within a united nation, so that both can compete and participate in the global supply chain,” Deputy PM Hue said. “The government is drastically implementing Resolutions No.19 and 35 and will soon be implementing the Law on Supporting SMEs. The law will encourage household enterprises to become businesses, while government support will be offered under market economy principles.”

But the government will not try to weaken one for the other. Instead, it will provide all conditions, especially a favorable investment environment, for both sectors to develop.

In regard to the criteria in choosing FDI, “Vietnam’s policy is attracting investment in a selective manner,” Deputy PM said. “FDI enterprises that are in line with the goal of restructuring the economy, with modern, eco-friendly technology, good governance, and a willingness to work with Vietnam’s businesses will be prioritized.”

In addressing opinions and comments of the VBF Working Groups, “we will seriously take note to enhance our legal enforcement abilities, finalizing the legal framework toward transparency, minimizing risks, and reducing costs in regard to policy,” the Deputy PM added.

Vietnam is doing all it can to boost the growth of the private sector. Last month, the fifth plenary meeting of the 12th Communist Party of Vietnam (CPV) Central Committee approved a resolution on developing the private economy into an important driving force of the socialist-oriented market economy.

The Committee stressed the need to continue renewing thinking and raising awareness about private economic development, considering it a necessary requirement during the development process, and paying heed to developing the private economy in a fast, healthy and more appropriate manner.

It also underlined the facilitating of the private economic sector’s development in all areas and promoting the development of all connectivity forms of production, business, and goods and service provision in the production network and market value chain between the private economy and the State economy, the collective economy, and foreign-invested enterprises, to receive and transfer advanced technology and modern governance.