Vietnam - Over 79,000 enterprises declare bankruptcy in 2011

At least 79,014 enterprises became bankrupt till the end of 2011, reported by Vietnam Chamber of Commerce and Industry, of which 7,611 firms were forced to terminate operations last year.

Until the last year end, Vietnam had total 622,977 entrepreneurs in which 79,014 declared bankruptcy. Particularly, among the bankrupted firms, 2,082 were private companies, 16,748 one member limited enterprises, and 18,826 over 2-member limited companies, 41,357 joint stock companies, and only one collective firm. Also, in 2011, 77,548 companies were newly established but 7,611 of the group had to stop operating.

Earlier, World Bank’s Business Environment Report 2012 showed that Vietnam was downgraded 8 spots to the 98th position in the ranking list of 183 economies. The deepest downgrade of Vietnam was in tax payment, down 22 spots to the 151st grade in 2011. Meanwhile, Vietnam stood at 65 among 142 considered nations in the 2011-2012 Global Competitiveness Report by World Economic Forum (WEF), down 6 spots compared with the previous report.

Businesses in Vietnam are shifting under the driving of market trend. Through years, the privatization ratio and the role of private companies can be seen clearly, Mr Deepak Mishra, Chief Economist of World Bank in Vietnam said, adding that however, the non-state economic component in Vietnam is performing better than state firms but still less than the efficiency of world companies generally.

“As researching about Vietnam’s economy, we thought that it was one of the countries with the fastest growth pace. Yet, the thought was wrong in the last 2 years after 20 years of exact facts. In 2011, Vietnam’s economy underperformed compared with the regional average growth of ASEAN. In 2010, Vietnam’s economic growth was lower than Asia’s average level”, Mr Deepak Mishra shared.

But, the economy in 2012 is expected to be more optimistic based on the facts which a lot of experts offered, for example, banks’ interest rates started to going down whereby enterprises are able to access bank loans in order to maintain and expand production.

Vietnam CPI in first two months of 2012 rose only 2.38% against the last year end, 10-year low. And Jan-Feb export of the economy showed the good growth rate of 25% along with a sharp reduction in trade gap.

A recent survey on plans of business production expansion in 2012 indicated that 1% of questioned companies may be closed, 15% would reduce business scope, 32% planned to expand and 52% maintained normal operation.

VietBiz24

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