(VEN) - Economists inside and outside Vietnam say that Vietnam will face new difficulties, which are expected to emerge in the post-economic recession period, so businesses should grasp the opportunity to undertake the necessary operational restructuring now.
Deputy President Nguyen Thi Doan said at the 2010 Business Forum in Ho Chi Minh City that in 2010, although the global economy has signs of recovery, these signals are not obvious. The global economy is gradually restructuring, while trade liberalization is slowing down and protectionism is increasing so Vietnamese businesses will still face many difficulties and can take risks, she added.
Le Xuan Nghia, the deputy chairman of the National Financial Supervision Committee, said that in 2010 businesses would face inflation-related difficulties, as many input costs are expected to increase. They will have to carefully choose which opportunities to take in the post-economic recession period, and they will need to think about what benefit state assistance programs would bring them in the period from 2010-2015, he said.
World Bank Country Manager in Vietnam, Victoria Kwakwa said that the global financial crisis had caused the world economy to fall into recession and this had influenced many countries and territories including Vietnam. But East Asia, including Vietnam, has been the least affected by the crisis, she said. In 2009, while other countries/territories in the region, including Thailand, Malaysia, Singapore and Chinese Taipei, saw negative growth, Vietnam and China witnessed real growth, Victoria Kwakwa said. The world economy is recovering and levels of recovery are different in different countries and territories, while sales keep decreasing worldwide and the world gross domestic product (GDP) has not increased yet, all of which show that difficulties still exist, she said. East Asia still has 9 -14 million poor people and a high unemployment rate so businesses especially small to medium-sized businesses in the region, including Vietnam, still have many difficulties to surmount, the country manager said.
Restructuring - a necessity
Deputy President Nguyen Thi Doan said that businesses need to restructure their production and trading operations in accordance with the world economy's new situation and the Government's new policies. The more difficulties they encounter the more patriotic they should be, the more united they should become and the higher respect they should pay to the more-than-80-million-person strong domestic market, she said. Vietnamese businesses should learn from foreign businesses that are operating here in Vietnam, the Deputy President said. Many businesses found an opportunity when finding ways to surmount difficulties, and they renovated technology, management and administration, she added.
Victoria Kwakwa said that in 2010, Vietnam should keep an eye on the global financial situation because this situation will in the long term influence economies worldwide including Vietnam. She said that internationally based capital will still be difficult to access so the Vietnamese Government should look for financial sources in Vietnam and nearby countries, which could act as substitutes, making sure that finance is made available to businesses that really need capital. The Government should continue increasing administrative reform and improving the business environment, increase investment in infrastructure and focus on improving business efficiency, she said. In other words, the Government should play the ruling role in assisting businesses, she added. Victoria Kwakwa said that Vietnam will have many opportunities after the financial crisis is over and it should be determined to take these opportunities to take its businesses to new heights.
Experts said that the Government cannot do everything so businesses need to work themselves to find what strategies suit them best. They should not waste time and money and need to renovate technology. Businesses need to know where they are in the market so they can grow in the domestic market and expand into foreign markets.
Seok Kyun Yoon, the deputy chairman of the SK Construction Company from the Republic of Korea (RoK), said that Vietnamese businesses need to restructure their operations, reduce production costs, improve productivity and have a long-term business plan to compete with foreign rivals because foreign markets are 10,000 times the domestic market in size and value.
Le Xuan Nghia said that in the coming time, upon expansion, businesses should invest in complying with market demands, and that industries, which are expected to recover fast after the financial crisis and economic downturn is over, include household electronic appliances, medicines, and healthcare and beauty services. The demand for medicines and healthcare and beauty services are expected to increase in the coming decade, he said. In the long run, businesses need to restructure their production and trading operations and it is the right time for technology renovation because the cost of technological transfers is dropping, Nghia said. In the short term, businesses should engage in joint ventures or merge into another organization to create a bigger business and improve competitiveness./.
By Phung Long
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