Private sector needs stronger policy support for sustainable growth
VOV.VN - Vietnam’s private sector is showing signs of weakening resilience, highlighting the urgent need for more effective policies to support sustainable business growth.
Mounting challenges for private businesses
According to the National Statistics Office, more than 57,400 enterprises were newly established in the first quarter of the year. However, business exits remained high, with nearly 63,500 firms temporarily suspending operations, over 16,600 awaiting dissolution, and more than 11,700 completing dissolution procedures. On average, around 30,600 businesses exited the market each month.
This trend reflects declining resilience among enterprises amid rising input costs, limited access to finance, and weakening demand. At Giap Bat Bus Station in Hanoi, interprovincial transport companies are facing mounting pressure as fuel prices increase while passenger numbers decline, forcing many operators to cut trips or consolidate schedules to stay afloat.
According to Ngo Thang Loi of National Economics University, the private sector is showing signs of slowdown. A growing trend of “staying small” is limiting business expansion, with private enterprises lagging behind state-owned and foreign-invested sectors in scale.
“The number of businesses ceasing operations or going bankrupt has been increasing, even exceeding new business formations. Around 50% of private enterprises do not survive beyond their second year, while nearly half report losses, indicating relatively low efficiency across the sector,” Loi said.
These figures suggest that the number of newly established businesses is no longer the most important metric; the key lies in how many can survive and grow sustainably.
Stronger policies needed to unlock long-term growth
In this context, more robust and effective policies are required to support the long-term development of private enterprises.
The Government’s Decision No.463 issued in March 2026 sets a target of nearly 2 million active enterprises by 2030, with the private sector expected to grow by 10–12% annually and contribute 55–58% of GDP. However, achieving these goals will depend not only on policy direction but also on effective implementation.
According to Pham Xuan Hoe, former deputy director of the Banking Strategy Institute under the State Bank of Vietnam, Vietnam has introduced major policies such as the Politburo’s Resolution No.68 on private sector development, but these need to be quickly translated into clear and practical regulations. He noted that inconsistencies in implementation have sometimes created obstacles for businesses despite supportive policies.
“To effectively implement the resolution, there is no alternative but to translate it into clear, detailed and practical laws and regulations. More importantly, the implementation process must be improved to avoid the ‘carpet above, spikes below’ situation that continues to create difficulties for businesses,” Hoe said.
Meanwhile, Associate Professor Dr. Le Xuan Ba, former director of the Central Institute of Economic Management, emphasised the need for breakthrough reforms, including removing long-standing barriers and biases against the private sector, particularly large enterprises.
“Breakthrough does not simply mean doing existing things better or faster, but having the courage to do what has never been done before. In particular, it is essential to decisively remove the long-standing hesitation toward the private sector, including large private enterprises. Once this barrier is lifted, development resources can be fully unlocked,” Ba analysed.
The expert also highlighted trust as a critical factor, saying ensuring a level playing field among economic sectors must go beyond policy statements and be reflected in practice. A transparent business environment, free from “ask–give” mechanisms, would encourage private firms to scale up and invest for the long term.
“Many private enterprises have been small partly due to an uneven business environment. The State needs to ensure that the economy operates fully on market principles, remove the ‘ask–give’ mechanism, and guarantee a level playing field for businesses across all sectors. This is perhaps the most critical condition that private enterprises expect,” Ba concluded.
Ultimately, enabling private enterprises to fully bring into full play their strength requires not just ambitious targets, but a coherent, transparent policy framework that is effectively implemented. With improved business conditions and stronger confidence, the private sector can become a key driver of Vietnam’s economic growth.
Source: VOV
