A conference was held 17 September at the Central Institute for Economic Management (CIEM) to launch the report “Characteristics of the Vietnamese Business Environment: Evidence from a SME survey in 2009”. The report provides an analysis of SME dynamics and issues related to private sector development and gives an overview of the current situation facing SMEs in Vietnam. SMEs are at focus since they are an important source of job creation.
As part of the Business Sector Programme Support (BSPS), CIEM, the Institute of Labour Science and Social Affairs (ILSSA) and University of Copenhagen organised the SME 2009 survey. The survey investigated the interaction of SMEs with domestic and international businesses with the focus on growth, employment, production, technology and efficiency, diversification, innovation, survival and closure. Data collected from the survey contributes greatly to the knowledge and understanding of the characteristics and dynamics of the SME sector in Vietnam.
The survey shows that more than 2,500 SMEs in 10 cities and provinces last year found that about 40 per cent of the enterprises constraints getting access to credit. The majority of those businesses were residing in rural Viet Nam. Although almost 70 per cent of respondents said the international financial crisis had harmed business, 12 per cent, mostly larger enterprises, reported they had actually benefited from it. The benefits included cheaper inputs, weaker competition and more and improved government support.
In general, the survey indicates that the business environment appears to have deteriorated because the number of unconstrained enterprises fell between 2007 and last year. The yearly survival rate of surveyed SMEs had declined to 91.6 per cent between 2007 and 2009 from 94 per cent between 2005 and 2007. The survey shows that temporary closure was a relatively common SME response in coping with the financial crisis. Almost one-fifth of enterprises temporarily closed between 2007 and 2009, an increase compared to the 2005/2007 surveys.
The Danish Ambassador Mr. John Nielsen said at the conference that “the SME surveys over the years have provided valuable information about the business environment in the SME sector. The surveys have feed into the policy-making process and have contributed to substantial knowledge about the part of the economic sector in Vietnam, creating more jobs”.