However, the emerging challenges Vietnam has to face now are how to capitalize the new opportunities while providing consistent solutions for the “green” areas of WTO. This aims to strengthen the competitiveness of the Vietnamese business sector, particularly small and medium enterprises with 96 percent of the total number and 250,000 of which come from different economic sectors.
It is estimated that SMEs, to the first quarter of 2007, created 3 million jobs and contribute nearly 40 percent of GDP annually. With the importance of SMEs in the social-economical strategies of the country, the government has enforced Decree No.90/ 2001/ ND/CP on the overall supporting program for the SMEs.
It is the first time the government has implemented a legal framework for SMEs. Moreover, the program deals very closely with support policies of the WTO. In other words, provided the policies are in full compliance with the WTO, they will be adopted for all countries, especially for underdeveloped countries with low starting points, including Vietnam.
Formation of supporting offices
Therefore, under the enforcement of Decree No.90, the system of supporting offices from central to local levels, including the SME support committee, the Department of SMEs and the SME technical centre in Hanoi, Ho Chi Minh City and Da Nang, have made their contribution for the SMEs establishment.
To implement the support program, the Prime Minister approved the human resource training program from August 2004. Besides, instruction No.40/TTg has officially been in effect since December 12th 2005, directing authorities to fulfil the mechanism and policies for SMEs and to help them integrate effectively into the international economy.
The specific support programmeTraining courses
In 2005, there were 140 training course for business operation and management conducted in 36 provinces and cities. Also, associations and some ministries compiled and published 26 subjects for this course. In 2006, with supporting funds of the Government, such training courses have been adopted in 19 provinces of the Northwest and the central highlands, and in three SME technical centres.
Besides, many localities are actively organizing training courses for SMEs from local budgets, such as Ho Chi Minh City, Hanoi, Nghe An and Ba Ria Vung Tau. Through that, enterprises can be equipped with basic knowledge and management experience for the market economy.
Technical aids
There have been three SME technical support centres under the Planning and Investment Ministry, focused on each sector to meet the demand of enterprises. Moreover, other authorities such as the Ministry of Technology and Science, and the Ministry of Industry are establishing suitable policies and mechanisms encouraging science and technology institutes to transfer their inventions for the operation of SMEs.
Many provinces and cities have built up transaction websites for trading online, forming a cyberspace marketplace for technology and equipment. Besides, many models provide technical information for raising, planting and agricultural processing for SMEs in remote places.
Credit approaches
Within the last three years, the banking credit system has been continuously adjusted and improved under market regulations and international routines. Since then, credit policies adopted in the economy, especially for SMEs, are quite consistent.
Many new banking system regulations have created an impartial business environment among enterprises from different sectors, on the basis of mutual benefit and efficiency. Now, SMEs are more confident and recognize their star role in the new business culture.
Beside traditional loans, banks have implemented many types of credit, for example, the guaranty, the discount, the re-discount of valuable documents etc, creating legal principles for credit unions to expand their investment channels in accordance with international regulations and the Vietnamese legal system. Especially, financial lease is a new technique providing enterprises with both short- and long-term capital, with the mortgages as a guaranty in commercial banks. However, because of limited communication and advertising, the technique is quite unfamiliar to most enterprises.
Trade promotion and information support
The program aims to introduce and advertise products of Vietnam, attracting foreign investors, seeking more business partners and expanding markets as well as increasing export turn-over. Many programs are adopted for trade promotion and national brand consolidation, pursuant to WTO commitment and procedures.
According to the Trade Promotion Department, there were 155 trade promotion programs sanctioned with financial support of VND 144.7 billion. In 2007, there have been 158 programs with financial support of VND 174 billion, sanctioned at the end of quarter two of 2006 and put into effect.
Besides, the Ministry of Trade has established some units supporting business operations; holding trade fairs and researching the market; building up programs to develop the wholesale market, port yard and warehouse, organizing import-export training courses and co-operating with authorities to solve the problems of enterprises.
Under international regulations and commitments, the program is necessary to strengthen the competitiveness of SMEs. However, it is the first step that enterprises need to integrate into the global arena.