Vietnam - Despite 2011 being a difficult year, VNR500 still keeps optimistic about 2012

VietNamNet Bridge – One third of the polled businesses in the survey conducted by Vietnam Report on the business environment prospect in 2012-2013, said they believed the situation would be better than in 2011. Meanwhile, 80 percent of businesses have affirmed that they will expand production and business in the next three years.


Vietnam Report, a credit rating firm, has released the report on the business environment in Vietnam in 2011 and the business prospect in 2012, after wrapping up the survey on 250 businesses in the VNR500 list – the list of the Vietnamese biggest 500 enterprises in terms of revenue and the FAST500 list – the list of the 500 Vietnamese fastest growing enterprises.

70 percent of surveyed enterprises are joint stock companies, while the other 30 percent are foreign invested enterprises, state owned and private run companies. 34 percent of the surveyed enterprises operate in the manufacturing sector, while 25 percent in trade and service sectors.

After a gloomy 2011, businesses keep a flicker hope for 2012

All the enterprises have agreed that the business environment in 2011 is really gloomy, which creates big difficulties for their operation. 40 percent of polled business said the situation is bad, 44 percent said acceptable, and only 16 percent said the situation is good.

However, there were a high percentage of businesses believing that the business environment would be better in 2012 and 2013, about 33 percent. Meanwhile, only 16 percent of polled businesses think the business environment would keep bad.

Manufacturing enterprises prove to be the most optimistic ones with 33 percent of them believing that the business environment is getting better, while only 17 percent said the environment is getting worse.

The polled businesses agreed that the three biggest obstacles for the economic growth in general and the business environment in Vietnam in particular are the high inflation (32 percent of enterprises); credit risks and banking operation (13 percent); and the problems relating to the policies and the macroeconomic management by the government (18 percent).

These problems are believed to remain the biggest barriers in 2012 with 28 percent, 13 percent, and 23 percent of polled enterprises agreeing on this.

When asked about the things businesses believe are the most important factors that may help improve the business environment in Vietnam in 2012, the majority of enterprises mentioned three main issues 1) the renovation of products, services and business model (22 percent); 2) easier capital mobilization (21 percent); and 3) the removal of trade barriers.

Most enterprises will expand business

When asked about the business plan for the next three years, 84 percent of polled enterprises affirmed they will expand business, while only 14 percent think they would maintain the same business scale, and 2 percent said they would scale down their business.

There are two reasons that enterprises mentioned to explain why they plan to expand business. They believe that the Vietnamese economy and the global economy would get better in the next three years (26 percent). Besides, they keep optimistic about the growth of the domestic and regional markets (27 percent).

The Vietnam Report’s survey has pointed out that the business result of enterprises in the first six months of 2011 was satisfactory, which was much better than that of the same period of the last year.

However, the capital cost of enterprises was higher by 58.6 percent in comparison with the same period of the last year. This explains why the total revenue increased sharply, but the profits did not increase accordingly. However, the problem is believed to be settled soon: since the inflation rate decreases, the lending interest rate would also decrease and ease the financial burden on enterprises.

Ha Yen


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