Institutional obstacles "tie up" enterprises and challenge economic growth

DNHN - During a session discussing the 2024 socio-economic development plan, National Assembly deputies emphasized that institutional barriers remain a significant "obstacle" for businesses.

Institutional barriers "tie up" both private and state-owned enterprises

Trinh Xuan An, a representative from Dong Nai province, expressed concerns over the procedural hurdles within the current institutional framework, especially the burdensome and opaque administrative procedures. He noted that while the government is investing hundreds of trillions of dong in infrastructure, including key transportation projects and high-speed rail, paradoxically, private investment is declining. Specifically, even as public investment accelerates, private investment growth currently stands at only 7%, half the previous growth rate. This disparity raises a fundamental question: why can't such substantial public investment spur robust private sector development?

"We often talk about the principle of public investment driving private investment, yet in reality, private investment is not taking off," Trinh Xuan An emphasized. He suggested that regulatory agencies reform institutional frameworks and simplify procedures to facilitate private sector participation in investment opportunities, particularly in major national strategic projects.

Furthermore, he noted that not only private companies but also state-owned enterprises—viewed as the "backbone" of the economy—face challenges due to complex administrative processes. Even large, powerful state corporations cannot fully realize their potential due to procedural bottlenecks.

A key topic in the session was the need to address these institutional barriers to enable stronger private sector participation in national key projects. Trinh Xuan An proposed that the government should be bold in entrusting private enterprises to carry out national infrastructure projects, a move that would stimulate private investment, enhance domestic firms' competitiveness, and provide a solid foundation for sustainable economic growth.

"Giving private enterprises opportunities is not just about business chances; it affirms their critical role in the country's socio-economic development," he said. Expanding private investment in infrastructure projects would not only address funding gaps for large-scale initiatives but also drive market growth, create jobs, and boost labor productivity.

Another prominent issue raised was the waste of resources due to delayed or abandoned projects. According to Trinh Xuan An, Resolution 78 from the National Assembly identified 51 problematic projects, including 13 critical ones facing delays, 19 abandoned, and 880 unused land projects. These inefficiencies not only waste resources but also severely impact the nation’s socio-economic development goals.

He urged the government and relevant agencies to decisively address these stalled projects. "We need to tackle projects on the list identified by the National Assembly and issue clear, thorough directives to prevent resource waste," Mr. An emphasized.

Institutional reform to drive growth

Hung Yen province’s delegate Dao Hong Van voiced similar concerns about the social resource waste, particularly in private investment. He noted that many investor projects cannot proceed to the operational stage, resulting in significant resource and capital wastage. He called for increased administrative reform, enhanced decentralization, and clearer accountability among state agencies in resolving procedural bottlenecks.

One solution proposed by National Assembly deputies to alleviate institutional barriers is to accelerate administrative reforms, grant local governments greater management authority, and enhance transparency in management processes. Ms. Dang Bich Ngoc from Hoa Binh province highlighted that institutional reform is essential for strong, sustainable economic growth in the coming period.

Ms. Ngoc emphasized that 2024 will be a pivotal year for achieving the goals set forth in the 13th Party Congress, making it critical to address institutional and regulatory bottlenecks to support business development. National Assembly deputies also agreed that the government should proactively issue specific mechanisms and policies to alleviate institutional obstacles and regularly assess the quality and effectiveness of these policies for timely adjustments.

Institutional reform is neither a simple nor quick process. However, in the current context of numerous economic challenges, addressing institutional barriers has become a key factor in helping Vietnam's economy recover and grow. Enterprises, particularly in the private sector, play an important role in job creation, production stimulation, and contributions to the state budget. Yet, they can only realize their full potential within a transparent, stable legal environment with robust support from state agencies.

With the strong institutional reform proposals from National Assembly deputies, there is hope that Vietnam will witness a breakthrough in economic promotion, creating more opportunities for enterprise growth, and resolving long-standing issues in public investment projects.

For Vietnam's economy to achieve sustainable development, the active participation of both state and private enterprises is essential. However, the development of businesses today depends not only on investment capital or business strategies but also closely links to the institutional and regulatory environment. Comprehensive institutional reform will be the key to boosting economic growth in the coming years.

Thus, the government, the National Assembly, and relevant agencies must take specific, decisive, and synchronized steps in institutional reform, removing administrative barriers and fostering a more favorable, transparent investment environment for businesses to develop and contribute positively to economic progress.

Nhan Ha Phan