SGGP 06/23/2023 05:37

The Vietnam Economic Annual Report 2023: Linking and developing enterprises towards a self-reliant economy, published by the Vietnam Institute for Economic and Policy Research (VEPR), University of Economics (Vietnam National University, Hanoi) on June 22, outlined three growth scenarios.

According to a survey conducted by VCCI at the end of 2022, the five areas that are causing businesses the most fatigue are taxes/fees, land/site clearance, social insurance, fire prevention and fighting, and construction. Photo: VIET DUNG

In the high scenario, GDP growth rate reaches 6.5%; Consumer Price Index (CPI) averages about 4.2% per year. According to VEPR, this scenario is unlikely to happen, but not impossible if the world economy develops positively thanks to China's opening up.

In the low scenario, the GDP growth rate in 2023 will only reach 5.5%, with an average annual CPI of about 3.5%. This scenario is also unlikely to happen, unless geopolitical conflicts in the world become more complicated. In the baseline scenario, the GDP growth rate will reach 6%, corresponding to an average CPI of about 4%. This scenario is 0.5% lower than the Government's GDP growth target and is more likely to happen.

The study pointed out the reality: the driving forces of economic growth have all declined sharply. The economy grew by only 3.32% in the first quarter, the lowest level under normal conditions since 1990. In the first 5 months of the year, export turnover decreased by 11.6%; import turnover also decreased by 18.4% compared to the same period in 2022. The industrial and construction sectors slowed down sharply from the third quarter of 2022. The purchasing managers' index continued to decline in the first 5 months of 2023, falling far below the average of 50 points... Notably, in the first 5 months of the year, the number of businesses withdrawing from the market was nearly 93% of the number of new entrants. This is an unprecedented high rate.

“A very large number of enterprises, including leading enterprises in their fields, are facing many difficulties,” Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management, emphasized at the conference. According to Dr. Nguyen Dinh Cung, a convincing evidence is that the capital demand of the enterprise sector is very low, although the State Bank has reduced the operating interest rate. Capital mobilization of the economic organization sector has decreased, while credit growth is slow. The inability to absorb capital shows that enterprises are “seriously ill”.

While there are many objective factors that cannot or are very difficult to change, improving the business environment and reforming administrative procedures are factors that still have much room for improvement, contributing to sharing difficulties with businesses. A survey by the Vietnam Federation of Industry and Commerce (VCCI) showed that in 2022, up to 71.7% of businesses agreed with the statement that "harassment in handling procedures for businesses is common" (in 2021, this rate was 57.4%).

Experts recommend that the Government should have a separate resolution on improving the business environment, enhancing competitiveness; improving the effectiveness of the government apparatus; focusing on reforming a number of areas where administrative procedures are still cumbersome as reflected by businesses (according to a survey conducted by VCCI at the end of 2022, the 5 areas that are causing businesses the most fatigue are taxes/fees, land/site clearance, social insurance, fire prevention and fighting and construction)...

In addition, the inter-sectoral administrative procedure is also one of the points that need to be reformed and needs clear direction from the Government; reducing the burden of inspection and examination in the direction of applying the principle of risk management; strongly reforming the specialized inspection stage for import and export goods. The current context requires resolute implementation of solutions that are not new, but with a new spirit, a new and more drastic attitude, to shorten the gap between reality and goals.