Brief Summary of the closing Comments By The Prime Minister’s conference with the Business Community
13 May 2015
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This meeting was organized primarily by the VCCI and guests included approx. 450 representatives of Vietnamese business and 45 representatives of foreign business.
The meeting ran from 8 am to 1 pm and the Ministers from MPI, Finance, Molisa, the Governor ofthe State Bank and deputy Prime Ministers were also present.
In his concluding remarks the PM touched on the following: The PM advised that the government had received over 300 recommendations on how to facilitate the development of the private sector and the PM had issued a directive to all Government departments to address these. The PM stressed the Government’s achievements in stabilizing the macro economy. In particular the inflation target for 2014 and 15 was below 6%.The exchange rate was stable and was not expected to depreciate more than 1% in 2014. Deposit and lending rates were decreasing. The PM reported that foreign exchange reserves were the highest ever at over US$ 35 billion. Vietnam was one of the top 5 growth economies in ASEAN with GDP growth of 5.42% in 2013; 5.8% (F) 2014 and 6%+ (F) in 2015. Unemployment remained at under 4%. There were 500,000 registered SME’s of which 400,000 were in operation but the PM stressed that SME’s had to accept a competitive market environment and particularly singled out the sugar industry. Whilst efforts had been made to improve the business environment there will still problems that needed to be addressed and there was a need to focus on the following: 1. Improve the environment for both business and Investment; 2. Ensure social and political stability and the Government needed to do more in this area; 3. Maintain macro stability 4. Maintain inflation below 6% to enable further reductions in interest rates with a stable exchange rate and foreign exchange reserves. 5. Ensure economic growth to generate employment, increase aggregate demand and purchasing power. There would be a focus on building institutions to support the development of a market economy, business freedom that would ensure the conduct of any business not expressly forbidden by law. Administrative procedures were still a problem for business and business establishment procedures needed to be reformed as the level of administrative procedures was considered an obstacle. Further reform of customs and tax procedures were also necessary and mention was made of the introduction of E Customs and E tax. Improvements were needed in the process of land allocation and administrative procedures and there was a need to eliminate fraud, to improve the conduct and ethics of Government officials in dealing with administrative procedures. The PM talked about the need to improve conditions for businesses both domestic and foreign to borrow and raise finance and to the State bank of Vietnam needs to give specific guidance on what needs to be done. Efforts were needed to reduce borrowing costs for SME’s for example through the Credit Guarantee Fund. The Government would continue to promulgate measures for institutions to restructure and businesses need to be more competitive, to improve productivity and to improve corporate governance. The Government would increase expenditure in order to further stimulate growth and also efforts would be made to stop smuggling and the sale of counterfeit goods. Foreign Trade Agreements would help open new markets but there was a reminder that these were reciprocal. Businesses would need to be more active in seeking out new markets and would need to work together to be more competitive.