VietNamNet Bridge – Compared to a decade ago, the number of operational companies in the Mekong Delta has fallen by over half, meaning more than 40,000 local firms have gone bust over the past ten years, Vo Hung Dung, director of the Can Tho Branch of the Vietnam Chamber of Commerce and Industry, said.

Dung was speaking at the Business Forum of the Mekong Delta in Tien Giang Province on Thursday which is part of the Mekong Delta Economic Cooperation (MDEC)-Tien Giang 2012 from Wednesday to Sunday.

The number of enterprises in the delta accounted for up to 23% of the total number of the country in 2000-2002 but now it just stays at less than 10%, Dung said. As per statistics of the Ministry of Planning and Investment, the nation as of this September had 471,000 enterprises in operation.

Speaking at the forum, Nguyen Dinh Cung, deputy director of the Central Institute for Economic Management, said the nation has since 2000 had some 670,000 companies established, but nearly 200,000 of them have stopped operation.

In this year’s January-August alone, over 35,800 enterprises dissolved and stopped operation at home, meaning the rate of disbandment has accelerated.

“The number of companies dissolving and stopping operation in the first eight months of 2012 is currently at an alarming level as it is double the average level recorded annually over the past 12 years,” Cung said.

“Since early last year, Vietnam has had about 100,000 enterprises dissolving and stopping operation, half of the number of companies dissolving and stopping operation since 2000 to date,” he noted.

Many representatives at the forum wondered why the number of enterprises dissolving and going bankrupt had run so high over the past time.

Other representatives said the fact that local companies are heavily dependent on bank loans is the main reason for their difficulties now that the banking system has tightened lending.

Cung, however, said the widespread bankruptcies in the delta are due to both interior and exterior factors.

“Personally, I think that the current global economic crisis along with solutions on inflation control and macroeconomic stability, especially tightened credit policy and sky-high lending rates, are the major causes of the rising number of bankrupt firms in recent years,” he stated.

VCCI’s Dung told the forum that his agency and the Southwest Steering Committee had established the Mekong Delta Business Association’s Council to connect members of provincial business associations with one another to share the same voice in proposing polices and improving the business environment.

Source: SGT