-
 Despite
an increasing number of firms entering the market, domestic
companies tend to be small scale, widely dispersed and have out
of date technology. Just over 46% are small firms employing less
than 10 workers, just under 49% are medium-sized, employing
between 10 and 300 workers, and less than 5% are big firms
employing more than 300 workers. The average return on capital
for domestic enterprises in 2000 was 3.7%, and 4.5% in 2003;
among private firms it is even lower, at 2.1% in 2003.
Mr. Vu Van Tuan,
Director of Industrial and Constructional Statistical
Department, General Statistics Office
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SMEs are often
depicted like small boats that are safe and dynamic in a river
or a less windy bay. But when they are pushed to the open sea,
their life is often threatened. SMEs tend to face more
difficulties in their operations than bigger businesses, as my
own company's experience has shown. First, it is very difficult
to access commercial credit. After 12 years of operation, our
company has never borrowed money from a commercial bank. Despite
having good business plans, banks keep requesting businesses to
provide collateral for loans, and yet the loan amounts are often
small compared to the value of the collateral assets. Second,
newly-established firms are often advised to locate in an
industrial zone. These IZs may be suitable for larger firms, in
order to centralize their activities, but many SMEs cannot
afford the rental rates. Third, there is often a lack of
coordination between tax agencies and enterprise support
organizations.
Mr. Phung Dinh Ngo, Director, Binh Hoa Garment Pte. Ltd. Co
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At the request of
HCMC People's Committee, the public-private dialogue system was
officially established in August 2003, and ITPC was assigned to
be its focal point. The main purpose of this system is to
provide official replies to business queries and problems. After
almost three years of operating this system, we see that issues
related to taxes and custom procedures are the most frequently
raised. Although greater efforts have been made to create a
favorable business environment, there are frequent complaints
about the negative attitudes of local civil servants (especially
their unequal treatment between local private and
foreign-invested firms). Despite strong commitment from senior
officials at local authorities, some civil servants keep making
trouble for firms. And firms have to pay unofficial fees and
charges to overcome these obstacles.
Mr. Truong Trong Nghia, Vice President of
Investment and Trade Promotion Center of HCMC (ITPC),
Head of Management Board of HCMC Public-Private Dialogue System
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