Vietnam Business Insight Survey: Strengthening the Public-Private Dialogue
May 26, 2010
Vietnam has garnered international attention over the past two decades with its remarkable economic growth and strong poverty alleviation record. The adoption of the doi moi (renovation) policy in late 1986, marked by a shift to market-oriented development and international integration, has transformed this country of 86 million. Crucial legal reforms embodied in such laws as the Enterprise Law, the Land Law, and the Investment Law have further spurred economic development, encouraging the emergence and growth of market activities, the private sector, and foreign investment in a country long governed by central planning. The private sector in particular is playing an increasingly significant role in the economy. According to the World Bank, in 2007 the domestic private sector contributed 46 percent of the GDP, and private sector investment in the economy grew steadily from 23 percent in 2000 to 38 percent in 2006. With some 1.5 million new entrants into the labor market each year, the domestic private sector is critical to employment generation.
There is no doubt that Vietnam’s government recognizes the importance of the private sector and has been supportive of efforts to generate a more conducive business environment. Benchmarking indices from the World Bank and the annual Provincial Competitiveness Index note improvements in such areas as business registration and access to land and credit. After joining the World Trade Organization in late 2006, however, Vietnam now faces a more competitive global environment, which has become more uncertain in the wake of the global economic crisis. Weak export and high inflation are slowing down overall growth, undermining gains in poverty alleviation, while falling incomes and job loss are affecting many.
Responding effectively in a time of economic crisis requires reliable data, and in this regard, the Vietnamese government has had challenges formulating the most productive policies to stabilize shocks, control inflation, and help businesses to sustain operations. As Vietnam feels more strongly the impact of the global economic crisis, it became clear that there was no system in place for the government to rapidly assess the challenges facing the business community to determine what policies should be implemented, and how.
Responding to this critical information gap, The Asia Foundation and the Vietnam Chamber of Commerce and Industry (VCCI) along with experts from Vietnam’s General Statistics Office (GSO) and the Lee Kwan Yew School of Public Policy’s Asia Competitiveness Institute recently launched the Vietnam Business Insight Survey (VBIS) website, aimed at gathering information on the business environment through quarterly online surveys.
The surveys will ask businesses about the conditions of their operations, their business plans and expectations, their views on government regulations and policies, and other specific concerns. For example, the effectiveness of the government’s stimulus package on the private sector was difficult to assess, and a rapid survey mechanism such as VBIS would have been very helpful to provide the government with concrete data for timely policy adjustments. In the initial phase, VBIS will cover around 500 enterprises in the manufacturing sector. As VBIS becomes more established and better known in the business community, we expect that more businesses will participate. Future surveys aim to include the construction, service, and agriculture sectors as well.
Businesses register online to participate in the survey, designed to take only 10 to 15 minutes. Results will be publicly available online and the information gathered will not only be helpful to policymakers, but will also allow businesses to compare performance and challenges with each other to better respond to the changing environment and new government policies. As results come in, we hope that this initiative can help grow the public-private dialogue in Vietnam.
Kim N. B. Ninh is The Asia Foundation’s Country Representative in Vietnam. She can be reached at [email protected].
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