In the context of economic recession, existing inadequate policies on supporting private sector (PE) have made hundreds of enterprises be dissolved or go bankrupt.
Private enterprises need more care and support for development. In the photo: Green bean cake production at Hoa An Co., Ltd. (Hai Duong city).
Numerous but yet to be strong
According to the Business Registration Division (Hai Duong Department of Planning and Investment), by the 16 August, there were 7,192 enterprises in Hai Duong province with a total registered capital of over VND45,750 billion, the majority of this number were small – medium-sized enterprises of the private sector .
Since the beginning of this year, there have been 488 newly established businesses with a total registered capital of more than VND2,646 billion. Generally, they are small with low capacity of credit absorption and low competitiveness and lack pervasive capability to create motivation for other businesses’ development.
Currently, the production and business operation of many enterprises are facing a lot of difficulties with inconsiderable growth and large product stagnancy, resulting in many firms’ dissolution or shutdown.
Since 2011, over 1,000 businesses have been dissolved with their business registration certificates revoked, an increase of more than four times against the period between 2006 and 2010. Moreover, over 1,100 enterprises have registered for inactivation but not registered that they were temporarily shutdown or conduct dissolution formalities.
The growing number of newly established PEs demonstrates the economy’s dynamism and, at the same time, indicates that many people are now wishing to become business owners.
However, there remain a lot of business owners doing business without sustainably well-planned thought, clear development orientation, etc. Thus, when encountering economic difficulties, a great numbeof them bared their limitations and many of them became bare hand.
Early removal of bottlenecks needed
The State has adopted many policies, such as tax exemption and reduction, bank interest rate lowering to help enterprises overcome difficulties, foster production and business. The provincial People’s Committee and departments have also held many dialogues, exchanges, and meetings to hear reflections on difficulties and barriers, thereby promptly taking appropriate counter measures to remove businesses’ difficulties.
Nevertheless, land leasing rate and tax policies are constantly changing, administrative procedure reformhas not been strictly executed, and officers in different divisions and working fields have not followed proper process and in timely manner, which have been causing troubles for enterprises, according to economic experts. These problems require more active involvement of levels and departments for early removal of such barriers.
There was a time electric fan products of Electromechanical 1991 JSC. (Hai Duong city) were bestselling; however, the company is facing a lot of difficulties for lack of reasonable business strategy. In the photo: Electric fan assembly at Electromechanical 1991 JSC.
Mr. Nguyen Huu Doan, Chairman of the Provincial Enterprise Association, said PEs’ current difficulties and many businesses’ bankruptcy are the results of a long period when the State gave priority to rolling out the red carpet to invite foreign direct investment or promulgated many policies prioritizing State-owned enterprises.
Meanwhile, the development of the private sector (PS), mainly consisting of small- and medium-sized enterprises, has not been really prioritized. Therefore, the competition among FDI, State-owned sector and private sector has not been truly fair and able to encourage the PS.
Besides, the reform of administrative procedures for enterprises to expeditiously go into operation right after their registration has not met requirements. A lot of enterprises have been established; however, prolix administrative procedures and overlapping legal provisions have caused difficulties or even bankruptcy for many businesses.
According to Mr. Nguyen Dinh Giang, Director of Gia Bao Green Bean Cakes Co., Ltd., all the bottlenecks and difficulties hindering PS operation and development sprang from law.
There are many legal provisions relating to enterprise operation, and things seem difficult for many of them to come to life. Presently, legal provisions concerning enterprises’ operations are too overlapped and fickle.
Furthermore, there is a phenomenon that State agencies do not understand law or misunderstand its spirit, causing difficulties for businesses. Hence, there are issues prioritized, encouraged in this regulation but blocked in others, etc., making enterprises do not know how to execute.
It can be said that for a long time, the Central Government as well as Hai Duong province has just cared about attracting investment and considered FDI sector as the growth motivation.
However, the FDI sector has showed many inadequacies, which indicate that a developed economy should not expect or rely too much on this sectorbut strong developed domestic sector.
Thus, the Central Government as well as Hai Duong province more than ever needs to pay more attention to remove the difficulties and barriers and facilitate PS firm development.
VU UY
Đăng ký: VietNam News
