WTO Director General Pascal Lamy has said that if everything goes smoothly, the WTO may admit Vietnam in October 2006, just weeks before the APEC Summit 2006 in November in Hanoi.

What is the state of Vietnamese enterprises?

Vietnamese enterprises can be divided into three sectors: state owned, private and foreign invested.

The first one, state owned enterprises (SOEs), now account for 75% of the national fixed assets, 20% of the society’s investment capital, nearly 50% of the state’s investment capital, but contribute only 50% of the state budget’s receipts. The sector can generate 1.6mil out of 4.3mil jobs in total. SOEs have been described as having the worst management, which causes big wastes of human and financial resources.

The second one, privately owned, is considered a dynamic sector. More than 200,000 businesses have been set up so far, creating 90% of the new jobs and accounting for 26.7% of the society’s investment capital. Private enterprises are mainly small and medium ones with backward technologies. Lacking long-term development plans, they will find it difficult to get prepared for the economic integration.

The third one, foreign invested enterprises (FIEs), have been making 54.6% of the total export turnover and 37% of the total industrial value, while employing 700,000 workers. The sector comprises dynamic enterprises, which have enough experience and financial capability to exist and develop.

Vietnam ranks the 73^rd among 104 countries in the world in terms of competitiveness. What do local enterprises have to do to improve their ranking?

Vietnam has 12 years ahead in a transitional period before it has to fully meet all the requirements set up by WTO. However, soon after Vietnam becomes a WTO member, challenges will come. After 10 years of exploring the market, foreign investors will come to set up entities in Vietnam.

The Government has made public the fields prioritised to develop, and it will declare the roadmap on tax cuts under regional and international commitments. The enterprises must know about the state strategies to decide what to do in the future.

A survey made recently showed a worrying problem, that 45% of enterprises have not yet drawn up any plans for the post-WTO period, and 31% of enterprises do not have the necessary understanding about the WTO.

What do you think is the most important role of the state in restructuring enterprises?

The most urgent task now is to complete the legal framework so as to create a fair playing field for all businesses. Rules of the game, the players and the playing field must become transparent. I think a government which has been in power for 60 years, including 20 years of doi moi (renovation), should be acting more bravely.

Source: Vietnamnet