Businesspeople: The Driving Force for Development

(VEN) - The Vietnamese State has chosen October 13 of every year as Vietnamese Businesspeople Day to acknowledge and honor the great contributions of businesses to the country's development. This decision, in the first decade of the 21st century, acts as encouragement for all people, especially young people, to establish businesses and bring into play their creativity in order to contribute to the country's hunger eradication, poverty alleviation and development cause.   The Vietnamese Businesspeople Day has been welcomed as an orthodox holiday. Activities to celebrate the day not only aim to express gratitude to businesspeople of older generations, but also highlight the important role of businesses in promoting the country's development in the modern period. If businesses are absent A day without business activity would mean like living life in a black box. There would be no electricity, no water, and all means of mass media and transportation would cease to operate. But in Vietnam more than 20 years ago commerce was almost forbidden, and non-State companies were likened to illegal businesses. Recently, Vietnam Report announced the list of the top 1,000 companies in terms of enterprise income tax payment for the previous three years (2007-2009). The list gathers the names of businesses from all three economic sectors (State-owned, non-State and FDI) at the ratio of 1-1-1. So to some extent it reflects the position of more than 200,000 non-State companies that are operational in Vietnam. * A business is an economic unit that is financially independent, has full legal status and is established in accordance with existing regulations. ** Net revenue of a business is total revenue that the business makes from selling products, goods and services after paying taxes. Source: General Statistical Office Today, things have changed. The number of businesses in Vietnam has increased and the lives of people are improving. Data from the General Statistical Office show that the number of businesses in Vietnam increased from nearly 113,000 in 2005 to 205,690 in 2008 and in the same time period, the per-capita GDP (Gross Domestic Product) also rose from US$642 to US$1,052. In 2010, there are in Vietnam about 263,000 businesses and the per-capita GDP is estimated at US$1,200. In 2005, businesses nationwide employed 6.23 million workers and this number is forecasted to exceed nine million in 2010. Businesspeople have contributed considerably to expanding the application of scientific research results and advanced technologies in production and business activities. This can be seen in the progress that Vietnam has made in terms of information technology, construction technology and food processing industry. If businesspeople were absent, scientific inventions would remain only on paper, except in fields of national defense and security. Important role of non-State businesses Vietnamese businesses are developing strongly. Data from the General Statistical Office shows that by December 31, 2008, State-owned companies accounted for 1.6 percent of the total number of businesses nationwide, while non-State companies accounted for 95.66 percent, and the rest was companies with foreign direct investment (FDI). In 2008, the capital of State-owned companies accounted for 40.83 percent of total capital of all businesses nationwide, and their assets accounted for 42.9 percent of total assets of all businesses (including long-term financial investments), while the capital and assets of non-State companies accounted for 41.83 and 37.11 percent respectively, with the remainder belonging to FDI companies. Today, after more than 20 years of renovation, as a result of equitization (partial privatization), the State-owned economic sector has been narrowed in terms of both the number of companies and the amount of capital. Meanwhile, the number of non-State companies has grown and their capital has also increased, but remains lower than the capital of State-owned companies. The percentage of FDI companies remains almost unchanged, despite Vietnam continuing to attract new FDI projects. Statistics show that non-State companies have gained good production and business results. Specifically, these companies create jobs for 57 percent of the total number of workers nationwide, and account for 56 percent of total net revenue of all businesses. Obviously, non-State companies operate more effectively and contribute more to the Vietnamese economy than businesses from other economic sectors. Let's have a look at some indexes, the industrial production value for example. In 2005, non-State companies created 31.2 percent of the total production value of the entire industrial sector and this increased to 37.1 percent in 2008, while in the same time period the industrial production value of State-owned companies decreased from 25 percent to 18.5 percent of the total. Another notable thing is that in four consecutive years from 2005 to 2008, non-State companies continuously took the lead in terms of the annual growth of industrial production value (nearly 24 percent), while that of State-owned companies increased slightly by 2-3 percent a year and FDI companies, less than 20 percent. Non-State companies create 86-87 percent of the total retail sales of goods and services nationwide. They are also large exporters that can be compared with FDI companies. It is possible to say that without the contribution of non-State companies, Vietnam could not achieve the impressive export results recorded in the first nine months of 2010. Non-State companies also play an important role in promoting tourism development./.