Socialist Republic of Vietnam

HA NOI — Ha Noi officials have urged businesses to develop their operations to help make the city more prosperous.

Politburo member and Ha Noi Party Committee Secretary Nguyen Phu Trong said local authorities would facilitate them by continuing to complete policies on land clearance, loans and markets.

Trong made the comments at a recent meeting with business representatives held to discuss ways to remove obstacles to production and business operations. Some 200 business reps attended, representing more than 20,000 businesses in the city.

He urged them to work toward the city’s modernisation and contribute to a municipal growth rate of 10-11 per cent in 2004-05.

Mayor Hoang Van Nghien said the city would support businesses in advertising and marketing costs.

Despite the promise, businesses complained of a number of hindrances standing in the way of more effective business operations.

HanoiCTT Information Technology director Hoang Anh Tuan said there was still some difficulty with capital policy.

He suggested local authorities implement policies, including taxation regulations, giving both private enterprises and State-owned enterprises a level playing field.

Other business reps voiced concern about inequality in land policies.

Hiep Hung Ltd director Nguyen Minh Nguyet said many State-owned enterprises had left their unused real estate vacant or property was leased to other State firms, while non State-owned businesses were clamouring to find available spaces. Many private firms having trouble finding property were forced to rent office space or production sites at high prices.

Nguyet said her company had been renting space from the Ha Noi Trade Department’s Viet Ha Company since 1999. When Viet Ha ceased operations, the department agreed to sell the property to her company.

But, the municipal People’s Committee - the land owner, decided it wanted the property back in 2003 for the use of a transport ministry company, leaving the Hiep Hung Company in the lurch and out nearly VND1 billion (US$63,000) in payments, said Nguyet.

Ha Noi Law Company director Tran Vu Hai added his office had received many queries from smaller, fledgling enterprises with a range of concerns.

Hai said small and medium-sized enterprises comprised 80 per cent of businesses in the city but they were too small to be members of business associations. Therefore, they didn’t know where to ask for help when they ran into trouble.

"These businesses have made a great contribution to developing the city’s economy, including paying taxes and generating jobs, but the city has yet to give them favourable conditions in which to develop," said Hai.

Ha Noi Business Association chairman Nguyen Duc Thanh suggested besides trade promotion, the city should allow the group to promote investment, as it was crucial to businesses.

He said the city should also issue a preferential export policy for local businesses as the present bonus policy for exporters was suitable only for major companies.

Of Ha Noi’s 21,500 enterprises, more than 700 are State-owned, 20,000 are non-State owned and 473 are foreign-invested. Last year, they employed about 600,000 workers and contributed to nearly 75 per cent of local revenues.

The State-owned sector grew 10.65 per cent and represented nearly 60 per cent of revenues and 63 per cent of the municipal goods and services output.

The foreign-invested sector grew 10.69 per cent and made up 16.1 per cent of the city’s goods and services and 15.7 per cent of its export value.

Private businesses increased and developed quickly, representing 20 per cent of the total goods and services and 10 per cent of the export value.

Last year, 6.6 per cent of all businesses still operated at a loss. — VNS