Forbes Magazine recognized seven Vietnamese billionaires in it 2021 issue, which came as great news for the private sector. This news may now encourage other Vietnamese business people to look more towards development and new ideas.
However, at the same time, several super rich business persons were prosecuted for misconduct and misinformation in the fields of real estate and bonds trading, showing that the private sector and private enterprises operate in two different extremes.
Rare cases
The development process of enterprises is also associated with the country's integration process, when the country keeps pace with the Vietnam-US Bilateral Trade Agreement (BTA). With this agreement, domestic enterprises have awakened and rushed outside to look for opportunities. Other economies are also taking this opportunity to explore the Vietnamese market of nearly 100 million people. It can be said that at the present time, Vietnamese private enterprises have entered a new stage of development. There is more focus now on quality, with an aspiration to build large, multi-industry private corporations and reach out to the world market.
During the last ten years, many large private corporations have appeared in Vietnam. They have diversified businesses and have stepped outside, competing directly with major competitors from Europe to the US, something that the previous generation of private enterprises could only dream of. This proves that the entrepreneurship as well as the management capacity of Vietnamese private enterprises has improved. All these steps show that they have a specific path and a clear goal.
On the other hand, one can look at the cases of large private enterprises that have been dubious in the past to the point of being prosecuted. However, personally I still think that these are just minor incidents in the overall picture of private enterprises, and basically, Vietnamese private enterprises are still in a strong development stage.
Crony culture
In Vietnam, crony relationships in businesses still raise big doubts, especially those related to real estate, because our system still has many shortcomings. For example, in the field of land, which is believed to be the most corrupt, because the Land Law has many shortcomings people can easily misuse the loopholes. Land is defined as owned by the entire people, but is managed by the State and represented by the owner. But the State here has too many different levels of management, and the management power is also very wide, so land management tends to overlap across many departments.
In 2013, when amending the Land Law, there were also many opinions suggesting that the State should only recover land for security and defense purposes and public purposes. As for economic purposes, the recovery is not consistent with the role of the State. Even if the law is passed, there is still a big gap in the implementation process. The proof is that at present there is no field that complains as much as the land sector. It is clear that the issue of market and State management of land has become distorted.
Mistakes in the field of land are not isolated but occur on a large scale and involve many localities and a number of ministries and branches. For instance, in the case of competent officials, especially when acquiring land of high commercial value, public opinion sees doubts in dubious dealings. Here, crony relationships can help private enterprises grow but cannot help private enterprises mature.
In recent years, Vietnam has had a number of private enterprises develop strongly, but this development is thanks to the crony culture. Because without a relationship, these enterprises are very difficult to access for investment resources of the state as there is no other way to grow.
The crony culture causes the market to distort, because of the inadequacies in the policies and management of the State mechanism. Building a market economy in the true sense of the word is a common desire that has been mentioned for a long time in Vietnam and has actually been concretized by the legal system and documents. But the actual reality is still far away.
In addition, if you look at the Vietnamese economy, there are still many problems to becoming a real market economy. The structure of Vietnamese enterprises includes state-owned enterprises, enterprises and private enterprises. Current policies are mainly incentives for state-owned enterprises and FDI enterprises, while private enterprises receive very few incentives, and this is favorable for the crony culture to develop.
Looking at all the above inadequacies, I think that economic thinking by the State must intervene deeply and widely in enterprises and the market. This is what causes the reverse effect, that is to say, in order to enjoy preferential policies for development, some private enterprises are forced to accept dubious dealings with individuals in state management agencies. The phenomenon of group interests and crony businesses has created an unequal competitive environment with other businesses. This needs to be phased out soon in order to return to a market which is open, transparent and non-disparaging.
Source : https://en.diendandoanhnghiep.vn/private-enterprises-too-dependent-on-crony-culture-n34101.html
