Latest news with #Resolution68
.jpg%3Fwidth%3D1260%26fit%3Dcover%26gravity%3Dfaces%26dpr%3D2%26quality%3Dmedium%26source%3Dnar-cms%26format%3Dauto%26height%3D630&w=3840&q=100)
Nikkei Asia
10-07-2025
- Business
- Nikkei Asia
Vietnam's private sector revolution leaves small firms under a cloud
HO CHI MINH CITY -- In Vietnam, an army of mom-and-pop street food vendors fuels the country, young and old, selling staples like banh mi for less than a dollar per sandwich. This legion is also front and center for Resolution 68 -- part of the nation's biggest economic reform plans in four decades, designed to stimulate its private sector. Like the 5 million household firms authorities estimate are operating informally in Vietnam, many street vendors don't pay tax and aren't officially registered as businesses, experts say. The time, red tape and potential earnings-hit involved in registering micro-firms that often operate without collecting or issuing receipts are seen bringing no benefit, only burden, they say.
The Diplomat
09-07-2025
- Business
- The Diplomat
Reflecting on the Vietnam Communist Party's Soliloquy to the Private Sector
If Resolution 68 is to be believed, state-owned enterprises are about to lose what remains of their special privileges. In early May, the Politburo of the Vietnam Communist Party (VCP) issued a new resolution on private sector development. It was one of four resolutions issued by the Hanoi leadership that General Secretary To Lam has billed as pillars intended to help the country advance. For those desiring a new wave of reforms that can unlock Vietnam's next economic growth phase, Resolution 68 was heralded as an important policy document, and even a 'new dawn.' It goes further than the VCP has previously gone to recognize the key role of the private sector in Vietnam's economic growth trajectory, some have argued. One local law firm told clients that Resolution 68 '…marks a turning point: the private sector is no longer seen as a supporting actor – it is now positioned as a core driver of Vietnam's socialist-oriented market economy.' Another local law firm said the resolution '… marks a significant shift in mindset, positioning the private sector not just as a supplement to the public sector, but as a vital component of the country's overall economic structure.' To be clear, the document was issued by the VCP, and not by a state body per se. However, the government apparatus – supported by various VCP-affiliated organizations – is now tasked with turning the spirit of the resolution, couched in the slightly hyperbolic and yet leaden Hanoi-speak of the VCP, into tangible actions that bring about impactful results. Given that various arms of the government have been working to catalyze and nurture the private sector in Vietnam for well over three decades, albeit with mixed success, why did the VCP feel the need to issue such a resolution, and to whom is it addressed? Some might argue that it is part of Vietnam's bid to convince the U.S. Department of Commerce that Vietnam is indeed a market economy at a time when the issues of trade and tariffs are at the top of the economic agenda. As recently as August 2024, Washington re-confirmed that it deems Vietnam to be a non-market economy (a status currently held by just a dozen countries), which has ramifications for the way the U.S. assesses duties on Vietnamese exports and any accusations of dumping. The Commerce Department noted that, despite recent reform efforts, the government's 'extensive involvement' in the economy 'distorts Vietnamese prices and costs.' It is certainly true that the Vietnamese government's direct ownership of numerous state-owned enterprises and its degree of control over a raft of business resources are legacy issues of Vietnam's pre-1990s command economy past. It is also true that until now, the most commercially successful element of the private sector has been the foreign-invested part of it (albeit with a few exceptions that prove the rule). The degree of success Vietnam has had over the last 40 years in attracting foreign direct investment has not been mirrored in developing a more home-grown, non-state-owned sector. State-owned enterprises (and the government that owns them) have been partly to blame, by crowding out private sector rivals in some sectors, but they are by no means the only culprits. It is widely recognized that the enabling environment for private companies to flourish and attain the economies of scale necessary to compete effectively has not been wholly conducive; more like passive-aggressive. If Resolution 68 is to be believed, state-owned enterprises are about to lose what remains of their special privileges. Nonetheless, old habits die hard. In an echo of the command economy days, the resolution sets various aspirational targets for private sector development by 2030, such as doubling the number of private sector firms, having 20 such firms for every 1,000 citizens, its contribution to GDP and the labor force… the list goes on. The leadership's somewhat romantic fondness for small and medium-sized enterprises persists, even though what Vietnam really needs is a cadre of large private sector firms that can take on state-owned enterprises and foreign-invested firms at their own game, rather than having to negotiate a route around them. The biggest gift that Hanoi's leadership could give the private sector would be to release it of such arbitrary goals, and grant it the independence to get on and be commercially successful by focusing on and leveraging the capabilities and expertise that lie within many Vietnamese firms. If the party now loves the private sector, then let it go. This year is expected to see Vietnam refresh its national Constitution, something that the country does every decade or so. Understandably, most attention is on governance aspects of the constitution, particularly in the light of changes being made at the national and provincial levels of government. But there may also be some changes in those parts that pertain to the economy, as the mindset changes entailed in Resolution 68 begin to sit uncomfortably with some articles in the constitution. For example, Article 51 of the Constitution declares that the 'Vietnamese economy is a socialist-oriented market economy with multi-forms of ownership and multi-sectors of economic structure; the state economic sector plays the leading role.' In some ways, Resolution 68 has the feel of a soliloquy to the private sector, by the VCP, as if seeking to convince itself, as much as anyone else, whether domestic or foreign, that Vietnam's future economic prospects will be a function of successful private sector development. Given the recent spate of high-profile scandals in the corporate and banking sectors, maybe Hanoi feels a need to renew its vows to the market economy, however 'socialist-oriented.' As to whether Resolution 68 will be sufficient to convince the U.S. administration that today's Vietnam is indeed a market economy, it is conceivable that Washington will be looking to see what changes are made to the wording of the Constitution, including references in Article 4 to the VCP employing 'Marxist-Leninist doctrine and Ho Chi Minh's thought.'
Business Times
20-06-2025
- Business
- Business Times
Funding Societies partners VPBank to facilitate SME financing access in Vietnam
[SINGAPORE] Digital finance platform Funding Societies on Friday (Jun 20) entered a commercial agreement of an undisclosed value with Vietnam Prosperity Joint Stock Commercial Bank (VPBank) to help small and medium-sized enterprises (SMEs) access financing from the lender. The partnership aims to address financial gaps for SMEs in Vietnam, which were estimated to stand at US$24 billion or around 2.11 times the current lending level for such businesses as at August 2024, financial data provider FiinGroup indicated. Kelvin Teo, co-founder and group chief executive of Funding Societies, said: 'We bridge the SME financing gap by reaching, assessing and channeling viable SME borrowers with one of Vietnam's most trusted banks.' Through a loan channeling arrangement, Funding Societies will connect potential borrowers to VPBank via its newly launched financing application, SmartSME, to facilitate the process of obtaining financing. The fintech startup will draw on its expertise from prior ventures in countries across South-east Asia – including Singapore, Malaysia and Indonesia – to identify eligible SMEs that are seeking financing and to bring them onboard the SmartSME platform, which was launched on Tuesday. It will screen potential borrowers for eligibility by using its proprietary artificial intelligence-driven credit technology to assess SMEs' loan repayment abilities to mitigate risks, as the SmartSME platform offers unsecured loans. Funding Societies said the collaboration is expected to enhance opportunities for the private sector to access capital resources. This is in line with the Vietnam government's newly issued directive, Resolution 68, that outlines the role of the private sector as a key driver of growth for the nation.
The Star
02-06-2025
- Business
- The Star
Hanoi pushes private sector growth agenda
Acting boldly: Chinh speaking in Kuala Lumpur recently. The PM is calling for clearly defining the roles and responsibilities of the Vietnamese state, local authorities, businesses and citizens in implementing Resolution 168. — Bernama HANOI: Prime Minister (PM) Pham Minh Chinh on May 31 chaired a dialogue with enterprises and business associations to effectively implement a resolution on the private economy's development. PM Chính said that after the Politburo issued Resolution 68, the government submitted to the National Assembly a proposal to issue Resolution 198 on specific mechanisms and policies to promote private economic development. The government subsequently issued its own programme and action plan to implement the resolution. The PM emphasised that the resolutions are already comprehensive and well-coordinated. The most desired now is to organise implementation effectively, guided by the spirit of 'thinking deeply and acting boldly.' It also needs to find the most efficient approaches to unlock the potential of nearly one million enterprises and five million household businesses. He called for clearly defining the roles and responsibilities of the state, local authorities, businesses and citizens in implementing the resolution. PM Chính also urged unity and coordination with the spirit. 'When the party has provided direction, the government is committed, the National Assembly agrees, the people are supportive and the country is hopeful, we only discuss how to act, not whether to retreat.' At the dialogue, minister and Government Office chairman Tran Van Son announced the decision to establish the National Steering Committee for the implementation of the resolution. Enterprises and business associations expressed their commitment to operating in compliance with the law, fostering business ethics and a healthy business culture, eliminating opportunistic and illegal practices, renewing their business mindset and enhancing their capabilities. 'If everyone joins hands with the government in fully and faithfully implementing the policies that have been set out, I believe all enterprises will grow. That is also a global trend,' Mai Kieu Lien, CEO of Vinamilk, said. Delegates also hoped for continued support from the government to facilitate business and production development. 'The state should soon develop and issue a special mechanism for science and technology enterprises in the agricultural sector, including policies on land, credit, tax and training; and amend the Law on Crop Production to align it with other laws,' Tran Manh Bao from Thai Binh Seed Group said. He suggested establishing innovation support funds and developing a mechanism for cooperation and technology transfer between the public and private sectors. Nguyen Van Khoi, president of the Vietnam Real Estate Association, said the priority is to address institutional bottlenecks and guarantee rights that enable private economic development. — Viet Nam News/ANN
AllAfrica
07-05-2025
- Business
- AllAfrica
Resolution 68: real reform or elite buffer in Vietnam?
The Vietnamese Communist Party's announcement of Resolution 68 has been hailed by many Vietnamese businesspeople as a major step toward protecting private property rights, ensuring fair competition and codifying legal precepts. Crucially, those legal changes include preference for civil remedies over criminal penalties, a ban on retroactive application of the law, and the presumption of innocence – all crucial to the functioning of a modern economy underpinned by the rule of law. But beneath that business optimism lies a vital question: Is this real liberation for all private enterprise or a head fake that ultimately serves the rich, powerful and Communist Party-connected? Announced earlier this month, Resolution 68 did not spring from a vacuum. In July 2023, the Chinese Communist Party and the State Council issued the 'Opinions on Promoting Development and Growth of the Private Economy.' That document was issued at a delicate moment as China's economic engines were losing steam. Business confidence had crumbled after heavy-handed crackdowns on big private tech companies like Alibaba. Recognizing that a suffocating regulatory burden and political uncertainty were choking off private-sector dynamism, the Chinese government shifted its message, emphasizing the significance of the private sector to the country's drive for modernization. China's 2023 document sought to rebuild trust and stability, and still sent the signal that the Communist Party sought to maintain a firm hold on the economy. By 2025, the economic tide had shifted in Vietnam as well. The 2024 death of leader Nguyen Phu Trong and the ascension of To Lam to Party chief marked a significant change in Vietnam's leadership hierarchy and outlook. Meanwhile, Vietnam's private sector had grown quickly but encountered longstanding obstacles, including access to resources, legal uncertainty and fragile business confidence, partly due to the crackdown on allegedly corrupt businesses and politicians. Resolution 68 borrows heavily from China's playbook, praising the private sector's importance while promising a more business-friendly environment. But Vietnam's version goes even further, promising a stronger legal shield than China's. Article 11 of China's 2023 document cautions against internal corruption and requires strict compliance regimens, criminalizing acts like embezzlement and bribery. It also highlights moves to beef up Party work in private companies, conveying the underlying assumption that businesses should police themselves in line with Party values. Vietnam's Resolution 68 also calls on private companies to promote business ethics, integrity and social responsibility. But Vietnam frames corruption as a two-way street, stressing that public officials must also stop extorting and exploiting private businesses. This dual messaging presents the state as both enforcer and partner, aiming to project itself not just as a regulator but also as an enabler of private-led growth. However, the key worrying difference between the two policies lies in how they handle legal risks. China's document promises to reduce unnecessary interference in business activities during legal investigations. It stresses 'protecting the property rights and interests of private enterprises and entrepreneurs in accordance with the law' and pledges to curb overreach like sweeping asset freezes or arbitrary enforcement. But it stops short of removing criminal prosecution from the table. Due process and proportionality are central, but when justified, criminal liability remains. Vietnam's Resolution 68 takes a bigger leap. Section 2.3 stipulates: Economic and civil violations should first be addressed through civil, economic, and administrative measures, And where the law permits both criminal and non-criminal handling, criminal measures should be strictly avoided, Even when prosecution is necessary, remediation should be prioritized and weighed heavily in legal decisions, Retroactive actions that harm businesses are prohibited, And the presumption of innocence is strongly emphasized. This is not a subtle repositioning. Vietnam's document not only endeavors to minimize legal disruption, but it in fact makes criminal penalties a last resort even in cases where legal outcomes are ambiguous. On paper, these principles align with international standards of predictability and proportionality. Prioritizing civil remedies and respecting the presumption of innocence are hallmarks of a fair legal system. But Vietnam's political-business terrain muddies the waters. Even if these reforms lead to a more level playing field for small and medium enterprises, in an environment still driven by elite capture and cronyism, these legal protections may still give priority and better protection to powerful state or state-linked conglomerates. For many businesses, the new legal shield may ultimately remain out of reach unless you are one of the major players with political connections. Additionally, overprotecting large companies creates systemic risks. Shielding such firms from full legal scrutiny fosters moral hazard – or worse. If these giants fail, the state may be forced into expensive bailouts, destabilizing the broader financial system in a 'too big to fail' scenario. Vietnam, one of the key 'China+1' destinations for global manufacturers, is already coming under investor scrutiny for its commitment to stability and predictability. Resolution 68's pro-business promises may ease concerns for domestic businesses, but foreign investors, particularly those who are aware of China's decades-long trajectory, will be closely monitoring how it's carried out. Any overt defense of elite interests could dent confidence in Vietnam's long-term legal credibility, even if short-term sentiment improves. By any measure, Resolution 68 is a bold move. It promises to slash red tape, protect property rights and update the legal regime in ways more appropriate for today's Vietnam. But Vietnam's strong tilt toward shielding private businesses from criminal penalties raises an unavoidable question: Is this the dawn of genuine legal reform or just a clever maneuver to protect the connected while appearing modern and pro-business to the outside world? Vietnam's entrepreneurs and foreign observers alike should temper optimism with caution, watching closely to see whether this latest wave of reform truly levels the playing field or merely fortifies existing powers and hierarchies. Leo Tran writes about international affairs, trade, and global strategy. His work has appeared in The Diplomat, Kyiv Post, and Modern Diplomacy. He also publishes at Vietnam Decoded.
