A batch of VinFast electric cars exported to Indonesia at Mipec Port, Hai Phong City. (Photo: TAM VO)

The potential and dynamism of Vietnamese private enterprises continue to grow. If properly nurtured through a favourable business environment and timely removal of obstacles, private enterprises can expand rapidly and become a leading pillar of the economy.

Contributing approximately 51% of GDP

In his article “Developing the private economy — a lever for a prosperous Vietnam”, General Secretary To Lam highlighted that during the early reform years, the private economy played only a secondary role, with the economy primarily relying on the state sector and foreign investment. However, in the past two decades — particularly after the Politburo’s Resolution 09 in 2011 and the Party Central Committee’s Resolution 10 in 2017 on private economic development — this sector has experienced a strong resurgence, becoming one of the economy’s most crucial pillars while increasingly serving as the key driver of national economic growth.

Vietnam has transformed from a poor, underdeveloped economy — with a per capita income of only 96 USD in 1989 — into one of the top 40 economies in the world today. As of the end of 2024, Vietnam’s per capita income had risen to nearly 4,700 USD per year, while the country’s GDP had reached 476.3 billion USD. The private sector has played a pivotal role in this national economic success.

According to official statistics as of December 31, 2024, the private sector includes over 940,000 enterprises and approximately 5.2 million household businesses, contributing about 51% of GDP, over 30% of state budget revenue, and creating more than 40 million jobs (accounting for over 82% of total employment in the economy). Despite facing many challenges, the private economy has maintained a steady growth rate, remaining a core force in wealth creation, economic growth, job generation, and social stability.

However, despite its significant contributions, the private sector still faces certain shortcomings and limitations. Most Vietnamese private enterprises are small or micro-sized, with underdeveloped management capabilities, low competitiveness, and inefficient operations. While some Vietnamese businesses have made it onto the global billion-dollar enterprise list, their numbers remain small, and they have yet to become strong leaders capable of driving the growth of small and medium-sized enterprises (SMEs). Additionally, household businesses, which make up a large portion of the private sector, remain fragmented and are primarily engaged in small-scale commerce, services, and retail trading.

The main factors preventing Vietnam’s private sector from fully realising its potential include legal and policy shortcomings, inconsistent regulatory frameworks, and inefficiencies in policy implementation. Moreover, administrative procedures remain complex and cumbersome, creating barriers that hinder private sector development.

According to economic experts, Vietnam still lacks a comprehensive private-sector development strategy that properly defines the role of different types of businesses — whether large enterprises, SMEs, or household businesses — and designs appropriate policies for each category.

The “three-legged stool” strategy

Sales and consulting point for tourism products and services at the headquarters of Vietravel Tourism Company, No. 190 Pasteur Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City.

In his article, General Secretary To Lam emphasised that a strong economy cannot rely solely on the state sector or foreign investment, it must also be built upon a robust private sector, which should lead innovation and national development. Based on this principle, he called for a fundamental shift in policy formulation, ensuring that the private economy is fully recognised as the country’s primary growth engine. This requires policy changes that remove obstacles and promote the strengths of a market economy to boost productivity and innovation in the private sector.

To unleash and maximise the potential of the private economy in this new era, the Politburo is expected to issue a new resolution that will encourage, support, and direct private-sector development through groundbreaking reforms in institutions, policies, and the business environment. This resolution aims to establish the private sector as Vietnam’s leading growth driver, an announcement eagerly anticipated by the business community.

Nguyen Quoc Ky, Chairman of Vietravel Group, described this moment as a pivotal shift in the Party and State’s perception of the private sector’s role and position. He expressed his hope that this new mindset would be translated into concrete policy through the upcoming resolution and implemented effectively in practice, thus removing barriers that have long hindered private-sector development.

“Businesses are the backbone and strength of the economy. Only when domestic enterprises are strong can the economy be resilient. Policy approaches should ensure fairness among state-owned enterprises (SOEs), private businesses, and household enterprises. These three economic sectors should be treated equally, forming a three-legged stool that provides stability and supports long-term economic development,” Nguyen Quoc Ky emphasised.

Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), outlined three key priorities for unlocking private-sector potential: improving the legal environment by simplifying investment licensing, business registration, and tax procedures; easing capital access barriers through greater transparency in credit approval; and enhancing the effectiveness of credit guarantee funds to support SMEs. In addition, priority is given to strengthening business protections, particularly through intellectual property rights enforcement, anti-commercial fraud measures, and ensuring fair competition.

HUBA’s chairman hopes that with strong reform efforts, clear strategic direction, and the vision of the General Secretary, the new resolution on private-sector development will pave the way for a transformative shift, further empowering private enterprises within Vietnam’s socialist-oriented market economy.