Today, the business community is playing a key role in the country's economic integration and development, especially the private sector that contributes about 42% of the gross domestic product (GDP) and creates more than 50% of jobs for the society. However, the country's 2045 Vision “Synchronously completing development institutions, first of all institutions for market economy development” to move toward a developed high-income country actually requires breakthrough reforms in trade and investment promotion and business development models.

Knowing three core business areas 

Currently, over 800,000 enterprises are working in Vietnam, with most being small and medium in size. The Vietnam Chamber of Commerce and Industry (VCCI) together with more than 400 provincial and national business associations (including the Vietnam Banks Association and nearly 20 FDI associations) has performed its functions relatively well: fostering business development and promoting trade, investment, scientific and technological cooperation of the business community in Vietnam and abroad. Representative and promotional activities of VCCI and other associations often follow the old models established in the centrally planned economy, like GDP statistics by business sector: industry, agriculture and services or public and private.

The market economy, characterized by a merchandize and product economy, requires a new business investment/trade promotion and business development models that are specifically directed to products, goods, sales solutions and cash flows.

According to market economists, it is essential to identify three core business areas to promote and develop businesses in the market economy:

1. Industrial manufacturing

Currently, VCCI, central and local industry associations and some State-owned enterprises (SOEs) are operating in this area. This model is inefficient, however. This is the weakest stage in trade promotion, investment and business development that results in unsuccessful industrialization and modernization strategy of the country. Consequentially, even criteria and standards for "Made in Vietnam" products are inconsistent, restrictive to trade promotion and unfair in competition. In the coming time, it is necessary to gather and build a national organization to promote and support the industry by focusing on developing and consolidating the Vietnamese industry that makes key products to lay the foundation for industrial growth and development of the Fourth Industrial Revolution for sustainable growth of the country.

2. Trade

VCCI and business associations as well as FDI business associations are currently trade and investment promotion agencies in Vietnam. This has made trade representation and promotion unfocused. In the coming time the goal is to build a central organizational model for the trade sector to foster domestic and international marketing and sales. In particular, the statistical report shows that Vietnam's Chambers of Commerce (Vietcham) are currently completely absent in foreign markets, despite the fact that the country's economy is one of the most open in the world.

3. Banking 

Currently, the Vietnam Banks Association acts as a forum for commercial banks. Its main objectives are to exchange and share banking experiences and know-how through its various institutions and to act as a formal link for the commercial banking sector and the government. However, it is necessary to strengthen its activities in promoting industrial production and trade, domestic and foreign investment.

Establishing a standing committee representative of three core business forces

A joint business standing committee of three core private sectors acts as a central coordinating body in recommending and advising the government to address development issues and recommendations arising from and/or resulting from business practices in all sectors, including commerce, industry, environment, tourism, finance, banking and others.

The committee has three objectives: 1) Identifying trade and investment barriers to improve economic conditions and investment climate in the country; 2) Fostering international economic, trade and investment relations by sending its representatives to regional and international forums; and 3) Promoting bilateral and multilateral economic, trade and investment cooperation by establishing business councils with overseas partners.

The Committee chair is rotated periodically among heads of three core business areas.

Strengthening public-private dialogue to improve market economy institution

The Public Private Dialogue (PPD) is an institutional organization that brings together public and private sectors. PPD's goals include building trust and bridging gaps to create a foundation for common problem analysis and identify policies and institutional reforms that make the business climate more favorable for private business development. Government agencies involved in PPD are more likely to promote sensible and feasible reforms while PPD-joining businesses are more likely to assist more powerful reforms. Without an equal dialogue, governments tend to adopt the loudest, most powerful voices, which rarely speak for the best interests of broad-based private sector growth. The policy process should not be limited to a small group with privileged access to political and governance structures, but should be built on purposefully established structures and processes to engage representatives of core business sectors and people in policy formulation, enactment accountability of policymakers.

PPDs hosted by VCCI and business associations with government agencies have helped continuously improve the business and investment environment. Plus the extensive progress of international economic integration and successful prevention of the COVID-19 pandemic, Vietnam has become an attractive destination for foreign direct investors. However, a new model of trade and investment promotion and business development will sustainably realize socio-economic goals of Vision 2045 - when the country celebrates its centennial founding anniversary.

The formation of the Joint Business Standing Committee (SC) will raise the voice on opinions, recommendations, concerns and aspirations of the private sector to the Government in an effort to bolster import and export, encourage foreign investment and stimulate more professional domestic economic activities. In order to strengthen PPD with businesses and have direct dialogues with SC, the Government should study the establishment of a Public-Private Dialogue Advisory Committee, chaired by the Prime Minister and directly joined by relevant agencies.

Old PPD models such as the Vietnam Business Forum (VBS) or National Assembly organized by government agencies and VCCI often catch a lot of attention, because of scale rather than actual outcomes. It is certain that the close and professional cooperation through the new PPD model between Public and Private Committees for Economic Development will enhance the economic prosperity and stability of the country as a whole.