The fulcrum for businesses is still faint. The feeling that makes businesses sad the most is that their difficulties are not evaluated, noted enough, the package of support is like putting salt into the ocean, people find that they are really difficult but haven’t been received the real help.
“When stating in front of the National Assembly, I didn’t think that after one year the economy in general and the situation of businesses in particular would be like today”, President of Vietnam Young Entrepreneurs’ Association – member of National Assembly Mai Huu Tin talked to VnEconomy, in the margin of the fourth session of National Assembly.
Mr Tin, the person who is keeping the position of President cum CEO of U&I Investment Corporation, also said that he felt the fulcrum for businesses to overcome this crisis period nowadays was still “faint”.
Is your company still steady to get over the “storm”, Mr Chairman?
It’s also very difficult, but luckily it is not very serious. Because we don’t invest too much, right at the time of best operating we haven’t been greedy, we just do following our power. We may be luckier than other businesses when we still have asset, if needed we can sell to maintain operation, to pay salary for employees.
Nowadays, I know some owners of businesses who don’t have money to pay school fee for their children, they have to ask their friends for help.
In the report stating at the last opening session of National Assembly, Government also talked a lot about difficulties of businesses in the common not-very-bright situation of the economy. How is the feeling of a member of National Assembly – a businessman about these evaluations, could you share with us?
According to my personal evaluation, the report is still quite optimistic, in reality businesses haven’t ever been difficult like that of nowadays, but that is the common situation of most businesses , not only for any certain small group. If the situation is continuously like this I think that at the end of this year the number of businesses anouncing to be bankcrupt will increase so fast.
Besides, solving bad debts is still too slow, the more the bad debts exist the more it will get worse. State businesses, except for the two groups having the decision of entrusting for governing body, the rest ones are still doing projects themselves to restructure, the particular solution to increase the effect of operation for this block is still not clear.
Hope that with real difficulties like that, then business community will be supported more to get over this period.
About state investment, debts of Government are making many businesses very difficult. Many localities have deployed many projects though they can’t distribute the capital. The reality has showed us the consequences that businesses have to shoulder. Many businesses “died” because localities don’t have money to pay for the projects that they have advanced capital to do. The mistake here is certainly not of businesses’.
The next subject is the salary of personnel, how to pay for them to be able to live, to concentrate to do their business, not to make difficulties for businesses and people, etc. All of them are big matters but really hard to solve…
That’s why I read the report of Government but still feel worried.
In the session at the end of the year 2011, you said to VnEconomy that since the year 1998, when starting doing business, you hadn’t ever seen the situation of businesses that was as bad as that of at that time. And on the National Assembly forum at that Congress, you also showed the judgment that most small and medium businesses were in the situation of being half living and half dying. If there was no better support then most of these businesses might no longer exist after one more year with serious consequences for the whole economy. This year Government has had much support for businesses, so is the current picture brighter or darker compared to your imagination?
When stating in front of the National Assembly, I didn’t think that after one year the economy in general and the situation of businesses in particular would be like today.
Beside the dizzy increase of bad debts, the need of the market is also low amazingly. But the reason I feel “hurt” is that many Vietnamese businesses are very difficult while businesses having foreign capital are different, because they borrow capital with lower cost, their experience in business and management is also better.
One year earlier I thought it was too many if there was about 50% businesses falling into difficulties but I didn’t imagine that the number would be up to 80% like the rate today. The rest 20% I think they are luckier, actually most of them are also facing problem.
70% big businesses reported to have a loss, no need to discuss about small ones, that is the reality that I can’t imagine.
You just talked about the “hurt” of domestic businesses when putting beside the businesses having foreign direct investment (FDI), but there is economic expert who creates the matter that also in this situation, why the businesses in FDI block develop normally, and they are also better even in competition with domestic market or export?
It’s true that operation on the territory of Vietnam together but the FDI businesses have the ability of borrowing capital from banks of their countries, so when they face difficulties they still have accomodation space.
For example domestic businesses profit 5% on total turnover then FDI busineses can profit up to 7-8% because they manage better, cheaper capital. Nowadays because of increasing cost, Vietnamese businesses may be at a loss then they still profit 2-3%. They live healthily, hold the market, and in reality they are spending money to buy many domestic businesses.
This is the convenient point for them. They don’t stand out the game in Vietnam but it’s clear that they are more advantageous because the macro economy in their countries is better than ours, that is the truth.
So in your opinion, what kind of business support is effective, when the budget is in the situation of not distributing the whole source to increase salary following route?
Money is not always the only solution, it also needs the sympathy and share with businesses, sometimes it’s simply the timely encouragement from the offices that have the highest responsibilty then it’s also very precious…
About other solutions, decreasing tax is a solution that is being discussed, that is not to spend money right away. Talking and doing for businesses to understand that Government is trying their best to share difficulties, that is also the motivation, although it’s only the encouragement then the effect is also very big, I believe so.
You just talked about difficulty of the budget, I am also considering very clearly recently. Mainly it’s spending, it hasn’t arranged any power source to reform the economy so delegates also haven’t had enough information to suggest solutions.
So it’s very hard to be able to find the encouragement source or the fulcrum for businesses?
Hope that this time, business community will be supported more to get over this period.
In the last session, when exchanging with VnEconomy, you judged that “only banking is the happiest industry”, but also worried about the vicious circle when solving bad debts. And now, under your sight, how are the bad debts effecting to the economy and businesses?
I don’t have enough information to evaluate exactly this matter, but surely that banks themselves are also very difficult to solve the dump of bad debts that they are having. A few small businesses are unlikely to get over, although having the advantage of having the right to dominate the input interest rate but in reality they are still competing by increasing higher, “fighting” with one another to mobilize money of people. Like I did say above, I don’t have enough information to evaluate if the income money is effective or not.
There is opinion of elector who thinks that letting the economy falling into this current situation is also a part of responsibilities of members of National Assembly, do you think that’s true?
Surely it’s true. National Assembly is the highest powerful office then we surely have to take responsibilities when letting the situation and people become difficult like that.
According to VnEconomy
Translator: TM (Unigroup)