Thaco is currently one of Vietnam's largest companies in the production, assembly, and distribution of automobiles. (Photo: HAI NAM)

The aspiration for breakthroughs

"I believe that Vietnam will become a developed country by 2045," shared Johnathan Hanh Nguyen, Chairman of the Imex Pan Pacific Group (IPPG), after attentively listening to presentations by various ministries, sectors, and economic experts on the effectiveness of financial resources for economic development at a conference held at the end of August 2024. Many challenges and difficulties were laid on the table, along with a series of proposed solutions.

Especially, the presence of leaders from the Party Central Committee’s Economic Commission on the presidium gave Johnathan Hanh Nguyen much hope. "When the opinions and suggestions of businesses and the discussions of economic experts are heard by Party and State agencies, I believe that the guidelines and policies promoting the country’s development will be implemented quickly and effectively," he explained.

It was not by chance that this businessman mentioned such a point. The proposal to establish an international financial centre, which he and his partners had nurtured since 2014, was submitted to agencies at various levels and sectors from 2016 and featured in many conferences, from local to central levels. However, it remains stuck in the... drawer.

"But I still have to speak out! We have many policies, but without money and without the participation of private sector resources, they cannot be implemented. I am saying this not only for my business," he candidly acknowledged.

The international financial centre project proposed by the IPPG is expected to be located in Ho Chi Minh City and Da Nang, mobilising up to 120 billion USD in capital. More than that, this model would connect domestic and international capital sources, enhancing Vietnam’s ability to mobilise funds. Importantly, it would attract international financial institutions and high-quality FDI, driving technology transfer, management capacity, and elevating Vietnam's position on the global economic map. To kick-start the project, his group, along with its partners, has pledged an investment of 10 billion USD.

"But the current institutional framework is too tight, not suitable for the long-term investment strategies of global investors. Time is running out, and we need a breakthrough mechanism!" the 73-year-old Vietnamese expatriate entrepreneur passionately expressed.

Increasing pressure for reform

Johnathan Hanh Nguyen’s concerns are not isolated. Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), has spoken of many Vietnamese entrepreneurs with a burning entrepreneurial spirit.

In fact, the growth of many private enterprises over the past 40 years of renewal has shaped not only the identity of Vietnamese goods and services in international markets but also brought many development strategies into reality, contributing significantly to the state budget, not to mention the role of the private sector in job creation and participation in social welfare activities. In reports from many localities, ministries, and even the government, companies such as Thaco and VinFast in the automotive sector, Hoa Phat in steel, FPT in information technology, Vietjet in aviation, and TH True Milk in dairy have been frequently highlighted. Furthermore, the development paths of many localities and economic regions have been closely tied to many large enterprises and conglomerates.

"However, the business environment still seems insufficient to support large enterprises in solving the country's development challenges, especially in the current context that green and digital transformations are urgent requirements," Dr. Cung continued.

According to Dr. Cung and many economic experts, the bottleneck remains in the mindset of the State as the market has grown and developed.

Years ago, around the 2010-2015 period, the need for reform and redefinition of the State's role in Vietnam's market economy was raised. At that time, the domestic private sector faced numerous challenges following the global financial crisis. This was also the first period when the number of businesses exiting the market was significantly high since the Enterprise Law came into effect in 1999.

"The government's resolutions on improving the business environment and enhancing national competitiveness, beginning in 2014, brought about significant changes in the thinking on state management and the role of the State in the economy. The ‘ask-and-give’ mechanism through licensing and business conditions gradually disappeared, replaced by a developmental and supportive State," Dr. Cung recalled.

The economy witnessed a strong recovery by businesses in the years that followed. Many companies made significant leaps in scale and influence. This was also when Vietnamese entrepreneurs began to appear on the global list of billionaires.

The private sector truly became a key driving force for the economy. From 2016 to 2019, the growth rate of private sector investment capital far outpaced that of state investment and FDI capital.

However, difficulties returned with the pandemic, followed by global geopolitical instability. Once again, the issue of businesses withdrawing from the market became a focal point of discussions in the meetings of government, ministries, sectors, and localities. Moreover, new development trends and Vietnam's Net-Zero commitment for 2050 have posed fresh challenges to the private sector.

"If we don't embrace green and digital transformation, we won’t get orders. Starting next year, H&M will not place orders unless 30% of materials are recyclable... We have done a lot and have worked with partners to comply with these requirements. But how do we access green financing when standards and classifications are unclear? How do we ensure consumers are not burdened with high prices when green investment costs are significant?" asked Than Duc Viet, CEO of Garment 10 Corporation, raising questions about the role of the State in sustainable development.

An expanding space for development

Vietnam needs strong local businesses to build and develop the economy while ensuring national defence and security. This was affirmed by Party General Secretary and President To Lam during his meeting with entrepreneurs from the Vietnam Association of Small and Medium Enterprises on August 22. During the meeting, Party General Secretary and President To Lam emphasised that the Party and State always pay attention to the development of the business community.

This information was echoed by businesses and economic experts in subsequent discussions. Confidence in an expanding and favourable development space for the business community is becoming more solid.

However, businesses are waiting for specific and immediate actions. Specifically, they call for the immediate removal of obstacles and difficulties that businesses have repeatedly mentioned, with management agencies already proposing solutions but lacking decisive implementation. There is also a need for a thorough review, evaluation, and amendment of legal documents in a coordinated and responsible manner.

Dr. Cung suggested that while immediate actions may not be groundbreaking, movements within the system would greatly encourage the entrepreneurial spirit of the business community.