Vietnam’s Prime Minister has recently met with private enterprises, emphasizing their role as the most crucial pillar of the national economy to drive double-digit growth. In light of this,

VietNamNet spoke with Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), about the significance of this policy shift.

Nguyen Dinh Cung believes that recognizing private enterprises as the core driver of the economy is both timely and accurate.

Vietnam’s private sector consists of registered businesses and household enterprises, including those in agricultural and non-agricultural production.

As of late 2024, Vietnam had around 980,000 active businesses, falling short of the 1.5 million target set for 2025. Additionally, there were approximately 2.5 million non-agricultural household businesses.

Currently, the private sector contributes over 50% of GDP, with private enterprises accounting for around 28%, non-agricultural household businesses contributing about 12%, and agricultural households making up roughly 10%.

This sector also represents 56% of total social investment, far exceeding the 28% share of state-owned enterprises and the 16% contribution from foreign direct investment. Moreover, it plays a crucial role in employment, creating more than 80% of jobs in the economy.

With such a dominant presence, it is clear that the private sector has already become the largest pillar of Vietnam’s economy.

The emergence of several large-scale national enterprises signals progress, yet Vietnam still lacks companies that have expanded on a regional or global scale. Given these realities, positioning the private sector as the economy’s primary driver is a strategic necessity.

Cung emphasized that for Vietnam to achieve double-digit economic growth, the private sector must also grow at the same pace. Without sustained high growth in this sector, the country’s economic prosperity targets for 2030 and 2045 will be unattainable. He also highlighted the need for comprehensive statistical tracking of private sector contributions to better inform policy decisions.

According to him, General Secretary To Lam’s directive to enhance economic freedom, transparency, and international business standards is crucial in fostering entrepreneurship and economic expansion.

Despite years of market-oriented reforms, freedom of business remains fragile. The principle that businesses can operate in any field unless explicitly prohibited has yet to be fully realized.

Many entrepreneurs still face significant barriers in registering and expanding their businesses. Current regulations require companies to operate within predefined industry categories, limiting flexibility.

If an industry is not listed, businesses must seek government approval, which is often denied. Additionally, many investment projects are subject to cumbersome approval procedures, violating the principles of a free market and discouraging private sector expansion.

The legal framework has, in many ways, transformed the idea of business freedom into a restrictive system where enterprises must conform to extensive regulations. Thousands of conditional business requirements act as barriers to market entry, favoring established businesses and protecting vested interests rather than fostering fair competition.

These regulations not only limit opportunities for small and medium enterprises but also create an environment where legal risks are a constant concern for entrepreneurs. Many business owners hesitate to expand due to the possibility of regulatory penalties, including severe administrative fines and, in some cases, criminal charges.

The legal uncertainty surrounding private enterprises has led to a reluctance among Vietnamese businesses to scale up. While companies like VinGroup, SunGroup, Thaco, and Hoa Phat have achieved significant success, they remain the exception rather than the norm.

For the private sector to truly thrive, Vietnam must eliminate institutional bottlenecks and shift towards a more market-driven economic framework. Without substantial reform, legal risks will continue to stifle business growth and discourage innovation.

Vietnam stands at a crucial economic turning point. To foster sustainable growth, policymakers must focus on creating a more transparent and predictable business environment. This includes ensuring fair access to resources, reducing bureaucratic barriers, and securing legal protections for investors and enterprises.

Only by addressing these fundamental issues can the country unlock the full potential of its private sector and achieve its long-term economic ambitions.

Tu Giang - Lan Anh