According to the General Statistics Office, gross domestic product (GDP) of Vietnam in the first six months of 2018 is estimated to increase 7.08 per cent year over year, the highest in eight years.
In the first half of 2018, the agriculture, forestry and fishery sector recorded the highest growth rate in the period from 2012 to 2018. In the industrial and construction sectors, manufacturing and processing industry is the bright spot with an increase of 13.02 per cent, the highest in seven years.
Besides the remarkable growth of the economy, the number of newly established enterprises in the second quarter of this year has doubled over the same period of 2014 and the registered capital increased nearly three times year over year.
Vu Tien Loc, Chairman and President of Vietnam Chamber of Commerce and Industry (VCCI), said these good indicators showed that economic recovery began, and business confidence revived. Talking with TheLEADER, he affirmed that this is a good momentum for Vietnam to continue promoting reform in the future.
The President of VCCI said that in the last two years, Vietnam has created a breakthrough in improving the business environment, especially the reduction of at least 50 per cent of administrative procedures and business conditions in the most important areas in October this year.
One of the bright spots in improving the business environment is the efforts to negotiate and implement the Free Trade Agreement (FTA) including Trans-Pacific Partnership (TPP) and Vietnam - EU Free Trade Agreement (EVFTA) which are considered high-standard FTA.
These FTAs are very important to the Vietnamese economy when they put pressure for Vietnam to reform and toward international standards, opening to both FDI enterprises and Vietnamese exporters, emphasized Loc.
Weak linkages between domestic and FDI businesses
"The resonance between domestic administrative reforms and market opening under the FTA has created a new face and confidence for the business environment," said VCCI President.
However, the spillover effect of FDI in Vietnam economy is very low. "The FDI man has been in Vietnam for 30 years and still cannot marry local businesses in Vietnam," said Loc.
According to Vu Tien Loc, the technology transfer efficiency from FDI to Vietnam is very low and domestic supporting industry has not developed. In the need of expanding production, many large FDI enterprises, such as Samsung, have to bring foreign suppliers into Vietnam which are the small and medium enterprises from other countries.
The strong linkages between domestic and FDI businesses become an important requirement for the new development stage of Vietnam and is one of the conditions for sustainable development of foreign investment and Vietnam industry.
The representative of Vietnam's business community said that the Government has made many changes such as decree on supporting industries but the legal framework for promoting this industry in Vietnam is not enough.
"Compared to the international scene, not only the business environment in Vietnam but also the governance of small and medium enterprises and the private sector still need to be reformed to reach the advanced standards in the region," said Loc.
According to the President of VCCI, it need a comprehensive program of support from the Government to specific associations and community. In addition, one of the most important requirements for Vietnamese enterprises, especially small and medium ones, is to develop their technology management ability to meet global standards and on that basis, to connect with multinational corporations.