The city's growth rate was slowing, as was the competitiveness of its enterprises since 2010. — Bloomberg
HO CHI MINH CITY: Despite leading the country in several key metrics, Ho Chi Minh City’s economic growth is slowing compared with the national average, and improving the competitiveness of its businesses is imperative to keeping it on the high growth path, say experts.
Dr Huynh The Du, a lecturer at Indiana University in the United States and a member of the Institute for Vietnam Initiatives, said the city is a prime location for business in Vietnam and has the highest number of businesses in the country.
It was also the biggest contributor to the country’s gross domestic product.
But its growth rate was slowing, as was the competitiveness of its enterprises since 2010, he said.
Thus, of the 70 Vietnamese enterprises in this year’s Fortune South-East Asia 500 list, 30 were in Hanoi and only 25 in Ho Chi Minh City, and of the country’s top 10 enterprises, the former city had six and the latter, only two, he said.
“Besides, the market capitalisation of listed companies in Ho Chi Minh City had declined from around 50% in early 2010s to less than a third by 2022, while Hanoi’s share is rising.
“The city’s labour productivity and average income have declined,” he pointed out.
He attributed the decline in the competitiveness to several factors such as incoherent business strategies, limited industry cluster development and a lack of links and mutual support between businesses.
According to Ly Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, a majority of businesses in the city are small or medium and a lack of resources is among their biggest challenges.
A number of manufacturing businesses have failed to improve their production technologies, she added.
David Tan Nguyen, chairman of BrainGroup, said many businesses lacked innovation and awareness of market trends.
To increase their competitiveness, enterprises must have a clear business strategy and vision, focus on branding, build modern management tools and have a mechanism to attract talents, according to Du.
They should also to be proactive in keeping up with new development trends such as green and digital economic development.
Industry associations needed to provide businesses with information related to market trends, technological advances, and industry development, while banks should connect with them to help businesses access credit, he said.
Chi highlighted the need for improvements in the logistics infrastructure and administrative procedures to support businesses better.
From a macro perspective, experts suggested that the city should pay greater attention to developing technical and transport infrastructure to reduce logistics costs.
Nguyen Van Dung, vice-chairman of the city People’s Committee, said the ability to create added value and the competitiveness of the business community would play a significant role in the city’s sustainable development.
The city had implemented policies towards improving its competitiveness and creating the most favourable conditions for businesses to develop, he added. — Viet Nam News/ANN
