After 20 years of implementing the Doi Moi (Renewal) process, the number of Vietnamese businesses has increased remarkably with approximately 170,000 private enterprises, 4,500 State-owned enterprises and 2.5 million traders, alongside thousands of foreign investors and organisations, who have expanded their operations in Vietnam and overseas. However, the total annual revenue of the country’s more than 82 million people is around US$50 billion, which is less than the total revenue of an average powerful global economic group. 

Obviously, Vietnam wants to establish powerful economic groups to play a key role in the national economy and create a lever for the whole economy amidst global developments.

On November 12, 2005, the Vietnam Coal and Minerals Group made its debut in Hanoi, becoming the first of its kind in Vietnam. Accordingly, the coal sector will gradually become a multi-sectoral economic group operating in the form of a parent-subsidiary model. In addition to wholly State-owned companies, it will develop limited companies and joint stock companies. The group’s capital will grow rapidly as it will develop in various areas besides coal, such as electricity, industrial dynamite, mining and energy mechanics, shipbuilding, automobile assembling, mineral exploitation and processing, and tourism services. In its trial run period, its prescribed capital increased from VND2,800 billion in January 2005 to VND4,300 billion in January 2006.  

Later, the Vietnam Insurance Group, the Vietnam Marine Shipbuilding Group, the Vietnam Post and Telecommunication Group and the Vietnam Garment and Textile Group were established. In the near future, more such economic groups will be established and they will become the core of the economy to regulate the market flexibly. 

The establishment of economic groups is a new concept for Vietnam in terms of macro-economic management. This means Vietnam will learn how to build strong trademarks, business methodologies and market competition strategies in and outside the country. 

Pham Chi Lan, a member of the Government Research Board, has warned that in other countries, the establishment of groups requires a long period as a result of competition and business developments, in which they compete with each other like “big fish eating small fish”, or merge or purchase in line with marker regulations and their own interests. 

In fact, Vietnam is in a transitional period, discrimination among economic sectors still exists, and State management for business organisations needs improving. In this context, the most important thing is how to manage these economic groups to keep up with economic development trends in Vietnam and increase the country’s competitive capacity in the global market. This process requires policy makers to grasp the situation.     

According to Minister of Trade Truong Dinh Tuyen, by 2015, most commodities imported to Vietnam will have duties ranging from zero to five percent. After the ASEAN Free Trade Area (AFTA), Vietnam, together with other Southeast Asian Nations, has signed a free trade agreements (FTAs) with China, and will sign similar FTAs with India and the Republic of Korea with duties ranging from zero to five percent by 2015.

Once Vietnam integrates deeply into the world, economic groups have to struggle not only in the global market but also at home. To secure a firm foothold, they should increase their competitive capacity. The fact is that while Vietnamese trademarks have not established a firm foothold overseas, the prestigious trademarks of big international groups are dominating the country. As a result, domestic groups are very vulnerable to huge global economic groups.  

According to Ms Lan, domestic economic groups should make thorough and careful preparations and study, considering such activities as prerequisites for them in the integration process. They should also consider the interests of millions of Vietnamese people who desire to generate and enjoy the fruits of socio-economic development. By doing so, Ms Lan said Vietnam’s dream of establishing powerful economic groups will come true.