Why Vietnamese enterprises always wait for the state’s assistance

The latest report of the World Bank and the World Economic Forum said that the competitiveness of Vietnamese enterprises has fallen behind Laos and Cambodia. The story of access to information and preparation for the ASEAN Economic Community partly explains that fact. VietNamNet talks with expert Pham Chi Lan, former vice chairwoman  of the Vietnam Chamber of Commerce and Industry (VCCI), and Mr. Dau Anh Tuan, Head of VCCI’s Legal Department.

VietNamNet: The fact that Mr. Dau Anh Tuan mentioned is alarming because according to recent information, about 10,000 small and medium sized enterprises from Thailand and Singapore and many other ASEAN countries came to Vietnam to learn about the Vietnamese market. And they did not wait until the AEC went into effect to prepare selling skills and their goods to compete with Vietnamese businesses. Meanwhile, most Vietnamese enterprises, which are mainly small and medium ones, will face direct competition from them. 

Why are ASEAN enterprises so active and Vietnamese enterprises are so impassive? Are they still looking for the support of the State, because the State’s over-intervention could lead to the passivity of Vietnamese enterprises, Ms Pham Chi Lan?

Pham Chi Lan: Yes, in their mind, Vietnamese enterprises still expect the State’s assistance. They think they have to wait for the State so their initiative is reduced considerably.

What Tuan just said is also a fact. Many businesses said that if they wanted to have information, including information of government agencies, they had to buy it. Meanwhile, in other countries, information is offered for free for enterprises. 

If businesses have to run around for months to get the information, then certainly they have to pay a lot of money that month. It takes both time and money from enterprises, just for information. 

In that situation, enterprises usually think that if they do not have money or if they do not pay for information, they will not get the information. So instead of searching information on the Internet or seeking information from business associations, they wait to see the opportunity offered by the State or the chance when they can access the information at a reasonable cost. 

Then I think that way of thinking in Vietnam is common, and maybe the media has some responsibility because when I read newspapers, I’m not very happy with the final conclusion: What should the state do? The state must do something to help enterprises. 

We also call for the State’s action, not the responsibility of society. Why do we not call on our businesses to try, or they have to do this or that, or the farmers must be active? 

Why Vietnamese enterprises always wait for the state’s assistance

From the left: Mr. Dau Anh Tuan, Ms. Pham Chi Lan and VietNamNet's reporter.

The final conclusion is always waiting for the State, the State will have a policy, the State will offer support. 

That way of thinking has urged the whole society to rely on the State. I think the media is also guilty here. By the way, I would like to say something very straightforward to the media.

Regarding foreign enterprises, for example the Thai business community, honestly, I must say that I have a terrible desire to have such an organizational system like they have. They have different levels of organizations for enterprises. 

It must be said that their state agencies do their responsibility very well and do not interfere in the business of their firms but they do as much as they can in providing information, guidance and recommendations as well as making reasonable policies for their firms so their businesses can grow. 

Perhaps Vietnamese policy makers do not need to go far, just need to look at their colleagues who work in the trade offices of Thailand in Hanoi and Ho Chi Minh City. These people can speak Vietnamese fluently. 

Thailand now has the policy that Thai officials must study the languages of other ASEAN countries in order to work well with those countries. They make it a policy, a mandatory requirement. 

But generally those who work at the Thai embassy in Vietnam, especially those involved in business or trade sectors, they are very good at Vietnamese so they can learn about Vietnam's policies and especially find markets in Vietnam for their businesses. 

So all the information that Thai businesses have they get from many channels. Any Thai business that wants to enter the Vietnamese market has a fairly good foundation of information, including information in their respective fields.

Secondly, we should look at how many events of Thailand are held in Vietnam each year to advertise Thai goods and these events are well organized, which is very true to the taste of Vietnamese people. 

And then they help Thai companies to see that the Vietnamese market is great because the taste of customers in Vietnam is similar to that of Thai customer, including the way to promote goods. 

Why Vietnamese enterprises always wait for the state’s assistance

Ms. Pham Chi Lan

So that according to the survey by Markense - a well-known market research company – on business approach to the ASEAN economic community, up to 52% of Thai firms said that among ASEAN countries, Vietnam is the most potential because they saw a lot of opportunity in Vietnam. In recent years, there have been mass rallies of Thai businesses into Vietnam.

Thirdly, within their business community, their collaboration is very good. Producers are always accompanied by distributors, and distributors are often on the go, they buy chains of supermarkets, convenience stores to prepare for bringing Thai products into the Vietnamese market. 

More and more Thai shops are appearing in Vietnam. This is a necessary step for Thai manufacturers. After such steps, they make more rational steps, like the way Metro bought by a Thai group. 

Apparently, they are preparing for different steps for a much more aggressive attack on the Vietnamese market. I crave for their way of doing, from the State to the business associations, then to the business. 

Business communities themselves are working very well, in a very organized way. They know very well how to join together into a group to penetrate into Vietnam.

Meanwhile in Vietnam, it is said that the role of business associations is more or less fuzzy. 

 usually raise their voices whenever problems occur, for example, when we have to cope with anti-dumping lawsuits. 

Only at that time associations show off. However, we do not have a process to research before releasing the product to avoid lawsuits. 

We have agriculture like this but let’s see after decades of exporting rice, we have not had a good rice exporting association yet. This is a very typical story of Vietnam. Actually, we don’t have to go far to learn good lessons, just visiting our neighbor Thailand to see how they do.

After 20 years of joining ASEAN, many times I feel sad and embarrassed that our country still belongs to the group of four under-developed countries of ASEAN. 

We are still in the group of countries that benefit from the so-called ASEAN initiative, which is an initiative to support the four less-developed countries in the region. For 20 years, now it is time to step into a very fierce stage of ASEAN to raise the level, but we still accept such a low level. That is really sad.

Dau Anh Tuan: I agree with Ms. Lan. It is true that if you look around the region, you can see that they have developed a new mindset and taken a new step in promoting business and investment and supporting business development. Their thinking is not to solve problems anymore, but to facilitate business. 

In Vietnam, it seems to be good for our businesses to not face difficulties in business procedures. Meanwhile in other countries, the authorities and the institutions are using their resources to facilitate business.

Why Vietnamese enterprises always wait for the state’s assistance

Mr. Dau Anh Tuan

I still remember a story that I am very impressed with: The ambassador of an ASEAN country met me and representatives of the Vietnam Chamber of Commerce and Industry and the Vietnam National Administration of Tourism just to learn about the rules on establishing associations in Vietnam. 

I was very surprised to know that that country had only 10 firms in Hanoi. With such a small number of businesses, the Ambassador learned how to establish a business association in Vietnam in order to assist their businesses here. That impressed me! I was impressed by the way state agencies of that country assist their overseas business. 

Through the Vietnamese press alone I have seen a lot of differences. For example, for the tourism promotion program of Thailand or Singapore, they are implemented by the State and advertised by the state in a very professional manner.

In Vietnam today perhaps before speaking about big things, the basic activities should be done first. 

Back to the issue of information, particularly statistics, in Vietnam there is a system of statistical organization and businesses have to pay to get information from these agencies. But it is difficult for businesses to use that kind of information. 

I know many businesses and investors who wanted to know information about import and export, for example, the amount of goods from Vietnam to China or from China to Vietnam, but they could not find out. That information is unavailable at the statistical offices while it is extremely difficult to get it from the customs agency. 

Clearly, the information needed for their business is very little. Some foreign firms have to hire market research companies to conduct surveys, which is very costly. The state should invest in improving the quality of statistics activities because information is very important for any business. The state’s investment in such task will be useful for many businesses.

Ms. Lan also talked about the problem of weak associations. That is a very big problem right now. Recently, the Chamber of Commerce and Industry of Vietnam has conducted some studies on business associations. 

We also surveyed directly at businesses and talked with many business association leaders to find out the matters associated with business associations.

The supporting role of the state is weak but the role of the business associations is even weaker. At present, most Vietnamese business associations operate in moderation, except for a few. 

And the business associations in Vietnam are in a vicious circle that has no way out. They have a lot of difficulties in resources. Some associations even do not have offices so they move from this place to another very often. 

They do not have resources nor money to hire staff. And when there is no money to recruit employees, they cannot recruit good ones. And when associations do not have qualified staff they cannot provide professional services to their members, to businesses. 

Then obviously the quality of the activities of these associations does not improve and it is difficult to give advice to businesses. Thus, businesses see that associations are useless and they do not want to join associations. 

And if the associations do not have the support of their members, they cannot find resources from members for their activities. I think the vicious cycle of the associations is very clear and to get out of this vicious cycle the role of the State is significant. 

State agencies need to promote - they may not directly give money – by placing orders for associations, which would help associations grow. 

So what we want to emphasize is that we cannot expect the State’s assistance forever in the supply of information because businesses have a very diverse need. 

For example, the need for information of craft villages is very different from that of large exporting firms and the need of agriculture is different from the need of manufacturing firms. 

So I think that one of the important solutions to solve information-related problems is to have additional institutions, subsidiary institutions like business associations. I think that in the coming time the state needs to pay more attention to this issue and take more radical steps.

VietNamNet: Based on the opinions of Ms. Pham Chi Lan and Mr. Dau Anh Tuan, I see that we need a change in the mind of public servants. They must understand well their role as the ones who serve businesses or the people. 

They must see businesses as their customers and with that in mind, they will know what their customers need and find ways to serve their customers better. 

As Mr. Dau Anh Tuan has pointed out our state agencies provide information but information that businesses don’t need or information that is useless. 

Dau Anh Tuan: With regard to this issue, I would like to comment further that even for the concept of transparency, in Vietnam making public does not mean transparency. 

As I have observed, the State agencies still say that they are transparent and the people and business can get any information they need from them. 

But in fact it is not easy to do. If you have good relations with them, you can get the information you need after a phone call but it is difficult for others. That way of working is very passive. 

Telling businesses to come and get what they want is a very old approach and is inappropriate in the current context.

There is another approach: it is finding the needs of businesses and society to focus your effort in order to satisfy them. The information must be very easily approached. 

Any business can come to get the information, whether they are big or small, not depending on their relations with the information providing agencies. 

If you just change the approach, the supply of information will be different. I just want to say that Vietnam may need to take a step of change and I agree that state agencies have to reconsider their mind as public servants to satisfy the need of their customers.

VietNamNet: So the solution is related to the bigger issue - institutional reform?

Pham Chi Lan: It is not just transparency as Tuan has just said. In our country, transparency is still poor. The most obvious example is that you should try to visit the websites of state agencies. 

Now every province and every state agency has a website. But how much information can you get from their sites? The information is very general or very old so it is useless. 

The information that the society needs is not available online. Perhaps they want to save it for those who come directly to get the information, not in the way that they have to provide information as a public service. 

But the transparency story is also associated with the matter of accountability.

According to a survey, 70% of Vietnamese businesses do not know anything about integration. 

Why doesn't the state ask the question: who is responsible for this situation and punish someone who is in charge of this? We often share responsibility. 

For each task, various departments are involved, so ultimately no one is responsible. It is very bad and we cannot develop.

I think that the state, in institutional reform, not only needs to change transparency but also accountability. 

The prime minister has said many times about the responsibility of the head of state agencies but actually until now we have never punished any chief for their responsibility in any case. 

No head of ministries or state agencies under the management of the Prime Minister but also the head of smaller departments, which are under the aegis of ministries, have had to bear responsibility so far for the incidents that were related to their agencies. 

Thus, the people have wasted their money to pay taxes to feed a huge machine, but it operates ineffectively that way.


Why Vietnamese enterprises always wait for the state’s assistance