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Deputy Minister of Planning and Investment Tran Duy Dong
(Photo: MPI)
Reporter: Deputy Minister, 2022 is considered an important year, confirming the recovery and development process of our country's economy after the pandemic. However, in that year, the economy in general and the business force in particular had to face many difficulties and challenges. In that context, the public opinion was especially interested in the health of businesses, the main subject of the economy. Could you please tell us mỏe on the highlights in the picture of business registration in 2022?
Deputy Minister Tran Duy Dong:
Overcoming difficulties and challenges in a very complicated and unpredictable world, with the drastic intervention of the whole political system under the leadership of the Party, with the joint efforts and unanimity of the people and the business community, our country has achieved remarkable achievements, basically maintaining macroeconomic stability, controlling inflation, and ensuring the big balances. The market sentiment and the business community's confidence are being stabilized again.
Regarding the picture of the business registration situation in 2022, it can be seen that the production and business activities of enterprises have made a positive recovery thanks to the expanded socio-economic activities and the people and businesses have felt the Government's companionship and support. The number of enterprises entering and re-entering the market in a year exceeded 200,000 enterprises for the first time.
The Government's policies on socio-economic recovery and development, notably Resolution No. 11/NQ-CP, are really an effective "medicine" that basically meets the expectations of the business community and the people, as well as demonstrates the strong determination of the National Assembly and the Government in helping our country's economy quickly overcome a period of many difficulties and challenges for recovery and development.
The positive spillover effects from the Government's Socio-Economic Development and Recovery Program along with the strong entrepreneurial spirit of the business community have contributed to the highlights in business registration in the first half of this year.
The number of enterprises entering and re-entering the market in the first 6 months of the year for the first time exceeded 100,000 (116,900 enterprises), up 25.4% over the same period in 2021 and is 1.4 times higher than the number of enterprises that withdrew from the market. Out of this number, the number of newly registered enterprises in the first 6 months of 2022 was 76,233, an increase of 13.6% over the same period in 2021, 1.2 times higher than the average in the period 2017-2021.
In particular, April 2022 witnessed the highest number of newly established businesses ever when for the first time in the history of business registration, the number of newly registered businesses in a month exceeded 15,000 enterprises.
Although in the last months of the year, the adverse factors had stronger impact on enterprises' production and business activities, 2022 was marked with a record number of 148,533 enterprises entering the market, an increase of 27.1% over the same period in 2021, equal to 1.1 times higher than the average level in the period 2017-2021.
In addition, the impassive number of enterprises returning operation in 2022 which is 59,835 contributed to the fact that the total number of enterprises entering and re-entering the market surpassed 200,000 for the first time (208.368 enterprises). The number of entries and re-entries is 1.5 times higher than the number of enterprises withdrawing from the market in the past year.
The above figures furnish a vivid picture of business registration. Various impacts and challenges have been facing the economy including the influence of the Russian-Ukrainian conflict, rising energy commodity prices, disrupted supply chains, high inflation and tight monetary policies in many countries leading to cash outflows from emerging and developing economies; investment and commerce decline, increasingly clear the signs of global economic recession, Vietnam's major export markets shrinkage, slowdown economic growth in other countries, etc. However, the record of the number of enterprises entering and re-entering the market was registered. That shows the efforts and entrepreneurial spirit of the business community, as well as affirms that despite difficulties, many new business opportunities still appear.
Reporter: Although there were impressive figures, the picture of business registration was not only rosy. What do you think of the difficulties and challenges facing the business community?
Deputy Minister Tran Duy Dong:
After more than two years of fighting against the epidemic, the endurance of the economy and businesses has been eroded. Industrial production and exports tend to slow down. The inflationary pressure is still high, especially due to external influences; the markets of corporate bonds, securities, and real estate face difficulties in liquidity and cash flow. Especially when the external and long-term accumulating influences of the economy strongly affected the market in the fourth quarter of 2022, the production and business activities, labor and employment of the people, businesses was affected and this impacted directly on the production, investment and business situation of sectors; The rapidly increasing interest rates put great pressure on capital mobilization and increase production costs; the driving force for export promotion in major markets faces many challenges when orders and export markets are narrowed due to declining demand, etc. This resulted in difficulties facing our country's business community due to the disruption of supply chain, production chain, lack of funds for restoring production, maintaining business activities, etc.
Therefore, many businesses had to choose to suspend operations or dissolve, causing the number of enterprises withdrawing from the market in the past year to increase
(In 2022, 143,198 enterprises withdrew from the market, an increase of 19.5% compared to 2021 and the number is 1.6 times the average level of the years in the period 2017-2021 - Reporter). Besides, the average registered capital size of enterprises in the past year also decreased and the registered capital of newly established enterprises tended to decrease in the last months of the year.
The difficulties and challenges of enterprises have been partly reflected in the results of the survey on "The production and business situation of enterprises in 2022" on the National on Business Registration Portal conducted from November 29, 2022 to December 20, 2022.
The survey results showed that 84.7% of enterprises participating in the survey were facing difficulties, in which the main problems were: The cost of input materials and labor was increasing day by day (reported by 51.8% enterprises); Market access, customer search, transportation (48.7%); Purchasing power decreased, inventory (44.1%); Access to capital (38.6%), etc.
Regarding the issue of special attention to many businesses in the past time which the difficulty in access to credit, the survey results showed that 43% of businesses thought that lending interest rates were high, 35.8% enterprises stated that loan procedures were complicated and time consuming; 35.3% of businesses did not have access to the State's interest rate support package; 31.7% of enterprises did not have collateral. Meanwhile, only a few businesses believed that difficulties in accessing credit came from internal reasons of the business: 27.9% of enterprises had business results that did not meet the conditions of credit organizations; 15.1% of enterprises lacked viable business plans; 9.9% of enterprises had incomplete accounting and financial management systems, etc.
However, the positive point that I want to emphasize is that despite many difficulties, 51.2% of surveyed enterprises had plans to expand production and business and 51% of enterprises believed that its production and business situation would improve in 2023. This shows that, although the world situation forecast continues to be complicated and unpredictable, difficulties and challenges in production and business operation in the coming time might outnumber advantages the business community still maintains a strong entrepreneurial spirit, as well as confidence in the recovery of the market and the economy in 2023.
Reporter: Deputy Minister, 2023 is forecasted to come with many difficulties and challenges. In order to promote the achieved results and reduce difficulties and obstacles for the business community, what solutions should be taken in the coming year?
Deputy Minister Tran Duy Dong:
Although the Government's efforts to accompany and support has been very positively recognized by the people and business community, the challenges facing Vietnam's economy in the coming year are not small: The two drivers of economic growth which are growth in exports and domestic demand are both slowing down. The external demand is weakening affecting Vietnam's exports; Post-Covid-19 consumption also seems to have slowed down. Tighter financing conditions and rising inflation may affect domestic demand in the near future, etc.
Deputy Minister of Planning and Investment Tran Duy Dong attended the National Youth Entrepreneurship in 2020 Forum
(Photo: MPI)
However, from the picture of the business registration situation in 2 years affected by the Covid-19 pandemic as well as the year 2022, it can be seen that the entrepreneurial spirit of Vietnamese businesses is very strong. Our country has just gone through a difficult period for both the economy in general and businesses in particular. This is also the time to add new positive energies for the post-Covid recovery and development period. From the business side, the new positive energy comes from the will to overcome difficulties, innovation and breakthrough ideas. From the Government's side is the determination to fulfill the commitment to accompany, support, "harmonized benefits and shared risks", people - and business - centric policies, generating confidence and motivation to the business community for development.
Accordingly, in the coming time, it is necessary to continue to perfect policies, improve the business environment towards a public, equal and transparent business environment to boost business motivations for innovation, development, confidence in carrying out their production and business activities, promote the startup and innovation ecosystem, and become a country with an attractive investment and business environment. In addition to favorable conditions for businesses to enter the market, it is also important to help businesses survive and develop long-term and sustainably.
Ministries, sectors and localities need to continue to attach importance to reforming, improving the business environment, improving competitiveness, consistently and fully implement and complete the objectives and solutions on improving business environment and competitiveness set out in the Government's annual Resolution No. 02/NQ-CP; Build a mechanism to create motivation to encourage innovation and creativity among officials and civil servants performing official duties; Promote dialogue and exchange activities with the people and businesses towards providing more substantive practical and immediate solutions immediately problems of businesses, not just listening to their problems.
At the same time, ministries and sectors need to study and propose to reduce the list of conditional investment and business lines and continue to propose to reduce and simplify business conditions at the request of the Government in Decision No. 02/NQ-CP; propose the Government to control the request for additional, conditional business lines and new business conditions. It is important not to prescribe additional conditions to create barriers for investment and business when issuing new legal documents or amending and supplementing existing legal documents; Strengthen direction and implementation of administrative reform within their scope of management towards creative, effective and comprehensive reforms which closely follow reform objectives and requirements of the Government, etc.
Businesses, industry associations and the business community also need to actively and positively participate in the process of policy making and criticizing; Share and reflect on problems, bottlenecks and difficulties; propose recommendations related to policies and policy implementation to ensure the effectiveness of state management, and at the same time create favorable conditions and safety for production and business activities of enterprises.
I believe that, under the leadership of the Party, the companionship of the National Assembly, the drastic direction and administration of the Government and the Prime Minister, the determination and consensus of the whole political system, the community businesses and the people, the overall picture of the business environment and Vietnam's economic prospects in 2023 will be brighter.
Reporter: Thank you very much./.