HANOI, April 3 (Xinhua) -- Vietnam's government has pledged strong support for the private sector to make it the engine of economic growth, Vietnam News reported on Monday.
A resolution recently issued by the government envisages 1.5 million businesses, half of them being medium or large-sized, will account for 55 percent of gross domestic product (GDP) by 2025, and 2 million companies by 2030 will contribute up to 65 percent of the economic growth.
The government also aims to improve the productivity of the private sector by 5 percent a year to close the gap between Vietnam and the top economies in the Southeast Asian region.
Vietnam has long attached great importance to the private sector, encouraging it to play an important role in booming the economy, increasing employment, and promoting innovation.
Data compiled by the country's Ministry of Planning and Investment shows that the private sector contributes more than 34 percent of the tax revenue and about 46 percent of the GDP. The private sector, representing up to 97 percent of the total 857,000 registered companies in the country as of the end of 2021, also provides 85 percent of urban employment.
Economists said the improvement in the business environment for the non-public sector would determine the expansion of private enterprises.
Vietnam has more than 5 million unregistered household businesses, far exceeding the figure 857,000 released by the government, according to the National Institute for Finance.
By simplifying business registration process and clearing the burdens of fees, taxes and other administrative costs, Vietnam could renew its embrace of private-sector expansion, said experts.
Slower development of the private sector in recent years has been noted by policymakers. Vietnam has failed to reach the target of having 1 million businesses by 2020, due partly to the impacts of the COVID-19 pandemic which led to a surge in the number of business closures.
The number of business closures exceeded the creation of businesses in Vietnam in the first quarter this year due to sluggish domestic consumption, weak competitiveness of local manufacturers, and limited access to bank loans, said the General Statistics Office.
Official data showed 60,200 firms closed their doors between January and March, while 57,000 companies were either created or resumed in the period, resulting in a net drop of 3,200 businesses. ■
