Enterprises need to make effective use of the Government's support packages. Photo: H.Diu

Facing "storms" from the business environment

In the context of the global economic chaos, Nguyen Phuoc Hai, Senior Vice President of CMC Technology Group evaluated, overseas enterprises take more priority in terms of technology application in comparison with Vietnamese ones thanks to appropriate support policies for research and development (R&D) activities. As a percentage of GDP, R&D spending in some countries such as Korea is 4.6%, the United States is 3%, and China is 2.2%... while in Vietnam, according to the latest data from the Ministry of Science and Technology, only a very small part of capital is devoted to R&D, which is significantly below international standards. Of the top 10 enterprises with the most founding activities and using R&D funds, 70% belong to the state-owned enterprise sector.

Therefore, he said, many enterprises in Vietnam are still limit ed in R&D investment due to risk aversion, and lack of guidance from large enterprises... which hinder the initiative and competitive capacity of businesses in the international market.

Sharing about enterprises' difficulties related to the business environment, Mr. Cao Tien Doan, Chairman of Thanh Hoa Business Association, said that most businesses face inadequacies such as stagnant administration reform trends, especially the signs of avoiding and pushing work in some parts of the state civil servants … “This is considered an 'underground storm', creating stagnation in the process of handling administrative procedures. As a result, many projects are delayed wasting time and money for businesses and many investment opportunities are missed, "said Doan.

According to Mr. Phan Duc Hieu, a Standing Member of the Economic Committee of the National Assembly, currently, businesses are facing many difficulties in terms of market, finance, capital, and competition. At a difficult time in the market, competition takes place fiercely not only among domestic enterprises but also among enterprises in the region. Therefore, irrelevant legal regulations add more financial burden and high compliance costs.

According to Mr. Hieu, a legal regulation bears 5 potential types of costs: administrative procedure costs, fees and charges, investment costs, opportunity costs, and informal costs. Therefore, institutional reform is not only aimed at reducing and simplifying administrative procedures but also aims to reduce compliance costs arising from legal regulations for businesses.

Businesses need direction and support from the Government

The global geopolitical fluctuations in the first half of 2023 hit businesses severely. Many businesses were forced to close or cut staff or reduce working hours, even some businesses chose to "stand still". According to experts, this situation will reduce the state budget revenue, affecting social security.

Therefore, businesses remark on the importance of institutional reform which is even more crucial than fiscal and monetary policy in the short term. At the recent 6-month review conference of the Ministry of Finance, representatives of some local leaders also emphasized solutions to improve the business environment, support business vitality, and at the same time can nurture an effective and sustainable budget revenue.

However, businesses want these reforms to be more drastic and effective which should focus on two main tools: fiscal policy and monetary policy; along with that, it is necessary to adjust investment attraction policies, especially applying global minimum tax principles to retain investors and attract more foreign capital.

At the same time, the business community is advised to keep promoting the spirit of initiative and flexibility, to be well prepared to get ready for development, and to ensure the supply and circulation of goods. In particular, businesses should follow the trend of green transformation which will be a premise for a legal "passport" when joining the global value chain, increasing the competition capacity amid the shift of export orders to other countries in the region.