VietNamNet Bridge – Having limited financial capability, having little voice in the state’s policies, Vietnamese business associations find it difficult to attract members.

Financial capability limited

According to the Vietnam Chamber of Commerce and Industry (VCCI), there has been no official statistics about the number of business associations in Vietnam. However, VCCI has estimated that there are some 400 associations nationwide.

A survey has been conducted to find out the situation of the associations, which showed that there are three subjects which have the initiative to set up business associations. They include the groups of businesses (53 percent), state management agencies (30 percent). Meanwhile, about 10 percent of associations have been established following the initiative raised by some individuals.

This explains why up to 75.53 percent of association chairs were once the managers of businesses, 24 percent were once state officials, many of them were high ranking officials.

Dang Dinh Quan, Chair of the Hung Yen Entrepreneurs’ Association, has pointed out that this is really a problem.

“When their businesses perform well, they would manage the associations well. But what will happen, if their businesses incur loss or go bankrupt? I am sure that the managers of the businesses would not have more power to lead the associations,” Quan said.

Most associations have been facing difficulties due to the limited financial capability. At first, associations’ budget saw the deficit of 54 percent, while the figure decreased to 35 percent in 2007-2011. However, no considerable improvement has been made since then.

The main source of receipts of the associations is the membership fee contributed by member companies. However, the proportion of official member companies which pay fees regularly has decreased from 75 percent in 2007 to 57 percent in 2012.

The weak financial capability explains why most of the associations don’t have separated head offices, while the offices have been located at enterprises’ buildings.

Some associations have reportedly had to relocate their head offices for five times and more. Only 35 percent of associations said they have not changed the addresses over the last five years.

Associations powerless in trade disputes

The most important task of associations is to protect the benefits of members in the disputes. However, this remains the biggest problem of the associations.

The organizations do not have much voice in lobbying for policies; remain incapable to protect member companies in trade disputes with foreign partners, or in the discussions with the state agencies.

Pham Chi Cuong, Chair of the Vietnam Steel Association (VSA), admitted that lacking money to run the association has caused a big headache.

“When enterprises become the defendants in the anti-dumping lawsuits raised by foreign organizations, we don’t have money to hire lawyers,” Cuong said.

This has badly affected the operation and prestige of Vietnamese enterprises. Many of them may be listed as “uncooperative subjects and foreign importers may refuse their admission to the markets.”

Le Dang Doanh, a well- known Vietnamese economist, when asking some businessmen why they did not join associations, received the answer that they don’t want to waste time on profitless works.

Doanh said this shows that the associations still cannot successfully protect the benefits of their member companies. Businesses would stay outside associations unless the associations can show the voice of the business community.

Pham Huyen