Preferential Policies Energise Small Businesses in Vietnam
Asia Pulse via Yahoo! Asia News - Feb 05
HANOI, Feb 6 Asia Pulse – Small and medium-sized enterprises (SMEs) are flourishing in Vietnam following the implementation of preferential policies, according to a Government report.
Policies that favour SMEs have resulted in rapid expansion for the sector.
Since 1986, a number of SME-related laws have been passed, including the Enterprise Law and the Law on Encouragement of Domestic Investment.
A Government regulation on assistance to SMEs issued in 2001 was especially successful in breathing life into the sector, according to business experts.
As a result of the various policies, the number of SMEs has increased to 190,000 in 2005. Regulations have also helped create a legal foundation for the development of a SME support network. So far, almost two-thirds of provinces and cities across the nation have launched programmes assisting SMEs with technology, personnel training and trade promotion.
Along with a boom in their numbers, SMEs have improved the efficiency of their operations. These achievements have allowed SMEs to contribute about 45 per cent of the gross domestic product (GDP) and more than 27 per cent of the nation’s total development investment. SMEs also provide jobs for about 25 per cent of the nation’s workforce
SMEs make up a large part of the private economic sector, which this year took a lead in the nation’s industrial growth with an expansion rate of 23.5 per cent during 2004, according to the Ministry of Planning and Investment.
The Government has asked the Ministry of Planning and Investment to finalise a draft on the further development of SMEs during the next five years. The draft is aimed at helping launch about 320,000 new enterprises by 2010, of which between 3 and 6 per cent will be involved in the export sector.
The Government has also instructed the Ministry of Planning and Investment and the Finance Ministry to consider further administrative reforms in order to encourage investment from the SME sector into new industries, high-quality services and products that are key to the development of the national economy.
The Government has also highlighted the immediate need to work out a mechanism for credit support for SMEs in rural areas, especially those in small industrial and handicraft villages.
Deputy Minister of Planning and Investment Nguyen Ngoc Phuc recently announced Government plans to issue a policy aimed at solving the shortage of workshops for SMEs, promoting newer technologies in the sector and establishing further funds for small and medium-sized businesses.
(VNA)
