The nearly 40-year journey of renewal has marked a resilient Vietnam, breaking through and yearning for development. From a centrally planned economy that was inefficient, with an average income of just $96 per person in 1989, Vietnam has risen strongly and is projected to enter the group of high-middle-income countries by the end of 2025, equivalent to over $5,000 per person per year.
This miracle is not only the result of the correct development policy under the leadership of the Party, involving bold and decisive reforms in institutions, policies, and integration, but also the outcome of the hardworking, creative spirit, determination, and relentless effort of our entire nation.
What is even more commendable is that Vietnam’s economic growth rate has consistently been double that of the average growth rate of developing countries, despite global economic fluctuations. From a poor economy that relied on international aid, Vietnam has continuously made strong leaps to become the 24th largest economy in the world in terms of purchasing power parity (PPP).
The achievements obtained are not only in the economic sector but also include significant social advances, contributing to a life of increased prosperity and happiness for the people.
This success owes much to the important contribution of the private economic sector.
In the early stages of Doi Moi (Renovation), the private economy played only a secondary role, with the national economy largely relying on the state sector and foreign direct investment (FDI). However, over the past two decades—especially following the Politburo’s Resolution No. 09 (2011) and the Party Central Committee’s Resolution No. 10 (2017) on private sector development—this sector has experienced vigorous growth, becoming one of the key pillars of the economy, and increasingly asserting itself as the most crucial driving force behind national economic growth.
With nearly one million private enterprises and approximately five million household businesses, the private sector currently contributes about 51% of GDP, more than 30% of the state budget, creates over 40 million jobs, accounts for more than 82% of the total labor force, and contributes nearly 60% of total social investment capital.
The private economy not only facilitates the expansion of production, trade, and services, but also plays a vital role in enhancing labor productivity, promoting innovation, and increasing national competitiveness. The strong rise of many Vietnamese private enterprises has not only led them to dominate the domestic market but also helped them establish their brands internationally. This proves that, given a favorable development environment, Vietnamese enterprises are fully capable of reaching farther and competing fairly on a global scale.
However, many barriers remain
Despite its growing contributions, the private sector still faces numerous obstacles that hinder its development, preventing breakthroughs in scale and competitiveness. Many household businesses continue to operate under outdated models, lacking the motivation to become formal enterprises—or in some cases, deliberately choosing not to grow.
Most Vietnamese private enterprises are small or micro-sized, with limited financial resources and managerial capacity. They often lack connections—with each other and with foreign direct investors—and have yet to take full advantage of opportunities from the Fourth Industrial Revolution. Digital transformation remains slow, and only a few businesses invest in research and development (R&D) or focus on business model innovation, technological upgrades, or new product creation.
As a result, it is difficult for them to increase value-added content, enhance competitiveness, elevate their market positioning, and reach international standards.
In addition to internal limitations, private enterprises face difficulties in accessing essential resources—particularly credit, land, natural resources, and high-quality human capital, especially in technology, engineering, and finance sectors.
Meanwhile, many state-owned enterprises (SOEs) control substantial resources—land, capital, and skilled personnel—yet often fail to utilize them efficiently, even leading to waste.
At the same time, the legal system remains inconsistent and overlapping, with a business environment burdened by cumbersome administrative procedures, excessive time and cost requirements, and high potential risks. In many instances, the freedom to conduct business and the right to property are still compromised due to poor enforcement or abuse of power by certain public officials.
Furthermore, government support policies and incentives are not yet truly effective or equitable across economic sectors, and often fail to reach private enterprises. In many cases, SOEs and foreign enterprises enjoy preferential treatment compared to the private sector.
SOEs generally have easier access to land, capital, and credit, while foreign enterprises receive more favorable support in taxation, customs procedures, and land access.
Moreover, issues like bureaucratic red tape, informal costs, and corruption persist, creating invisible burdens on private businesses, reducing productivity, and discouraging further investment expansion.
It is clear that the limitations in the development of the private sector stem in part from institutional and policy shortcomings in the economic system and business environment. These bottlenecks not only hinder the growth rate of the private sector—causing its contribution to GDP to remain nearly unchanged over the past decade—but also constrain the economy’s ability to move up the value chain, escape the middle-income trap, and slow Vietnam’s progress toward becoming a high-income developed country by 2045, as envisioned in the Party’s resolutions and the aspirations of the people.
In alignment with the national vision, the private sector must also define its own mission and long-term direction. It must position itself as a pioneering force in the new era, playing a leading role in the country’s industrialization and modernization, enhancing national competitiveness, assuming social responsibility, contributing to improving the people’s quality of life, helping build a civilized, modern society, and playing its part in creating a dynamic and globally integrated Vietnam.
The private sector must strive to become a core driving force, taking the lead in technological application and innovation, with the goal of contributing around 70% of GDP by 2030. Increasingly, Vietnamese private enterprises must achieve global competitiveness, master technology, deeply integrate into international value chains and supply chains, and work alongside the state in building an independent, self-reliant, resilient, and prosperous Vietnam.
To realize this ambitious vision, the most critical requirement is the need for continued breakthrough reforms in institutions, policies, and the business environment so that the private sector can fully unleash its potential and become the leading driver of economic growth and international market expansion. A strong, thriving economy cannot rely solely on the state sector or foreign investment—it must be grounded in a robust domestic private sector that plays a leading role in innovation and national development. The national economy can only truly flourish when all people actively participate in productive labor, creating material wealth in a society where everyone is motivated to contribute.
In light of this, we must reframe our strategic perspectives and awareness across the entire political system regarding the role of the private sector as a key engine of national economic growth. This requires fundamental changes in policymaking—resolving long-standing constraints and maximizing the advantages of a market-based mechanism to help the private sector improve labor productivity and drive innovation. The state must adopt a management approach compatible with a market economy, ensuring the protection of freedom to do business, property rights, and fair competition for private enterprises; eliminating barriers, improving policy transparency, and removing interest group influence in policymaking and resource allocation; avoiding discriminatory treatment between private enterprises, state-owned enterprises (SOEs), and foreign-invested enterprises.
At the same time, we must consistently uphold the principle that “everyone has the right to do business in sectors not prohibited by law.” Policy frameworks should instill confidence among investors, businesses, and entrepreneurs; there must be stronger trust between the state and the private sector, encouraging businesses to boldly invest, innovate, and enter strategic economic sectors.
The upcoming resolution of the Politburo on the private economy must encourage, support, and guide the development of the private sector, serving as a breakthrough catalyst to usher in a new era for Vietnamese private enterprises. It is imperative to recognize that private sector development is a long-term national strategic policy. The private economy, alongside the state economy and collective economy, forms the core foundation for building a self-reliant, autonomous, and resilient economy. Accordingly, a number of priority solutions must be implemented:
First, accelerate the improvement of a fully functioning market economy institution, in accordance with the orientation of a socialist-oriented, modern, dynamic, and globally integrated economy. This is a prerequisite for the rapid and sustainable development of the private sector. To this end, the state must focus on macroeconomic stability, institutional reform, and ensuring that the economy operates on market principles—reducing state intervention, eliminating administrative barriers and “ask–give” mechanisms, truly managing the economy by market-based methods, and using market instruments for regulation. In particular, we must strictly control situations where enterprises monopolize or manipulate policy, safeguard fair competition, and ensure equal opportunity for private enterprises to grow.
Second, effectively protect property rights, ownership, the right to conduct business, and contract enforcement for private enterprises. One of the key functions of the modern state in a market economy is to protect investor property rights. The state must establish and enforce a strong legal framework to safeguard these rights, including intellectual property and intangible assets; reduce legal risks and minimize abrupt policy changes that cause losses for businesses. It is also necessary to create support mechanisms for private investors, especially startups and innovative enterprises, to help them feel secure and grow confidently.
Moreover, a modern, socialist-oriented market economy requires a transparent, effective contract enforcement system to enable businesses to operate confidently in commercial and investment activities. This includes reforming the commercial justice system, shortening dispute resolution timelines, minimizing costs and risks, and reducing contract violations that go unsanctioned. It is essential to enhance the transparency and efficiency of economic courts and commercial arbitration, ensuring fair and objective judgments to protect the legitimate interests of businesses.
We must also improve law enforcement oversight, addressing inconsistencies between central and local levels; strictly handle cases of abuse in inspections that create burdens or harassment for enterprises; and increase support for private sector development. At the same time, it is important to firmly address legal violations by businesses, while requiring them to improve legal compliance awareness, build business ethics and values, and contribute to the healthy, sustainable development of the private sector.
Thirdly, in addition to strongly reinforcing the SOE (State-Owned Enterprises) sector, especially the state economic groups, it is necessary to prioritize the construction of regionally and globally competitive private economic groups. Actively supporting small and medium-sized enterprises, while also uplifting the household economy and cooperative economy; encouraging private enterprises to participate in the country’s strategic fields, and practicing the view that the private economy plays an important role in the structure of the socialist-oriented market economy, while eliminating the mindset of prioritizing state enterprises and the “monopoly” of state-owned enterprises in certain fields.
Forming and developing large, strong private economic groups with international competitive capacity, which can lead and support other domestic enterprises to participate deeply in the global value chain.
At the same time, there should be specific policies to support the development of small and medium-sized enterprises, as well as the household economy and cooperative economy. Encouragement for business households to transition into enterprises and develop new effective cooperative models. To ensure that the private economy not only grows in scale but also actively contributes to the long-term development of the country, it is essential to encourage private enterprises to participate in strategic fields, develop important infrastructure, high technology, spearhead industries, and energy security.
Expanding opportunities for private enterprises in national important projects, collaborating with the state in certain strategic industries and special fields, enhancing research capability and technological innovation. The state should implement a policy mechanism to commission the private economic sector to participate in certain key national projects and urgent tasks such as: constructing high-speed railways, urban railways, energy infrastructure, digital infrastructure, national defense industries, and security…
Fourthly, promoting the wave of entrepreneurship, innovation, digital transformation, and the application of new technologies. This is a key factor that helps the private economy break through and reach an international level. Strong and effective support policies are needed to promote private enterprises to apply technology, innovate products, and enhance value added.
The state needs to create a regulatory sandbox for new technological fields, encouraging private enterprises to invest in pioneering areas such as artificial intelligence (AI), blockchain, big data, e-commerce, fintech, and smart healthcare…
Implement financial support policies and tax incentives for businesses investing in research and development (R&D). Establish a strong startup ecosystem, facilitating startups and technology “unicorns” named Vietnam to reach international standards.
Fifthly, reforming the institutional framework to build a government that “serves businesses – serves the country”: There is a need for decisive institutional reforms based on a renewed mindset, with a strong focus on creating an administrative system that serves the people and businesses. This includes decisively cutting administrative procedures and business conditions, accelerating the digitization process and the application of technology in state management to reduce compliance time, costs, and informal fees. Establishing effective dialogue and policy feedback mechanisms will enable the private business community to participate in the economic policy-making process, ensuring practical and feasible outcomes.
Striving to place Vietnam’s business environment in the top 3 in ASEAN within the next three years.
Sixthly, maximizing the release of development resources for the private economy, creating opportunities for the private sector to effectively access important resources such as capital, land, human resources, and technology.
Promoting private enterprises to further integrate into the global economy, enhancing the economic stature of Vietnam on the international stage, and protecting businesses against economic risks. More effective support policies are needed so that the private economy can access resources conveniently, equitably, transparently, and efficiently, while optimizing the utilization of these resources.
Developing funding channels for private enterprises, including the stock market, corporate bonds, venture capital funds, credit guarantee funds, and modern financial instruments such as fintech and crowdfunding.
Establishing a stable and transparent land policy that facilitates private enterprises’ access to suitable land resources at reasonable prices.
Seventhly, developing the private economy on a sustainable basis with business ethics and social responsibility:
The state needs to orient and effectively support Vietnamese private enterprises to participate in the global supply chain, vigorously attracting foreign investment and advanced technology, and forming a workforce of entrepreneurs with a global mindset. In particular, policies should encourage and direct private enterprises to invest in processing and manufacturing industries, supporting industries, agricultural industrialization, and high technology, rather than overly focusing on real estate and short-term speculative sectors.
Establishing mechanisms and policies to protect private enterprises from economic shocks, especially in the context of global instability, economic downturns, and market fluctuations.
Developing the private economy on a foundation of macroeconomic stability, closely linked to green development strategies, the circular economy, resource conservation, emission reduction, and environmental protection.
Private enterprises need to proactively undertake social responsibility, not just in terms of financial contributions or charity, but also through responsible business policies that care for workers’ welfare, support community development, and practice transparent and effective governance, building a business culture based on ethics, combating fraud, and ensuring fairness with customers, partners, and employees.
Additionally, private enterprises should actively participate in social security programs alongside the state, contributing to improving social welfare, reducing the wealth gap, and building a civilized, humane, and prosperous society where the interests of businesses are tied to the common prosperity of the country.
The private economy plays a very important role in shaping the future of Vietnam’s economy. We all believe that with appropriate state direction, sound policies, and a favorable business environment, the private economy will thrive, breaking through vigorously, not only helping the economy achieve high growth rates but also propelling our country towards becoming a high-income economy in the next two decades.
Now is the time to act, to create a prosperous, dynamic Vietnam that continuously reaches further on the international stage.
We are living in a historic moment, witnessing the unprecedented development of science and technology and an international environment full of volatility, where we cooperate and compete, where opportunities and challenges always coexist. But with resilience, determination, and burning aspiration, Vietnam can absolutely achieve a new miracle in economic and social development!
A strong economy is taking shape, a generation of Vietnamese entrepreneurs who are resilient, innovative, creative, full of business enthusiasm and patriotism, are continuing the story of success, and a brilliant future—a socialist Vietnam standing shoulder to shoulder with the world powers, as envisioned by President Ho Chi Minh—is gradually becoming a reality in the near future.
Source: National Agency for Science and Technology Information and Statistics
