This site presents an analysis of the Vietnamese government's economic policies compared to a list of 34 economic policies as prepared by students Quy Nguyen Sr. with the McKeever Institute of Economic Policy Analysis (MIEPA). These studies were written in December of 2012. To read the analysis scroll through this site. To learn more about the background policies, click here
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Native born Vietnamese student Quy Nguyen Sr. living in California has completed a study of the Vietnamese governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Vietnam by Quy Nguyen Sr. is shown immediately below. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2012. Used herein with permission]
RATING SUMMARY - QUY NGUYEN SR. POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 2.0 6.0 15.0 40 % 2 1.0 3.0 15.0 20 3 1.0 3.0 15.0 20 4 2.5 7.5 15.0 50 5 4.0 12.0 15.0 80 6 3.0 9.0 15.0 60 7 3.5 10.5 15.0 70 8 2.0 6.0 15.0 40 9 2.5 7.5 15.0 50 10 4.0 12.0 15.0 80 11 3.0 9.0 15.0 60 12 2.5 5.0 10.0 50 13 1.5 3.0 10.0 30 14 3.0 6.0 10.0 60 15 2.0 4.0 10.0 40 16 2.0 4.0 10.0 40 17 2.0 4.0 10.0 40 18 1.0 2.0 10.0 20 19 2.0 4.0 10.0 40 20 1.0 2.0 10.0 20 21 1.0 2.0 10.0 20 22 1.0 2.0 10.0 20 23 2.5 5.0 10.0 50 24 2.5 5.0 10.0 50 25 2.5 5.0 10.0 50 26 1.0 2.0 10.0 20 27 1.0 2.0 10.0 20 28 2.0 4.0 10.0 40 29 3.0 3.0 5.0 60 30 2.0 2.0 5.0 40 31 3.5 3.5 5.0 70 32 2.0 2.0 5.0 40 33 3.5 3.5 5.0 70 34 3.0 3.0 5.0 60 TOTAL 76.0 163.5 365.0 44.8% ===== ====== ===== =====
INDIVIDUAL POLICIES - QUY NGUYEN SR.
1) Freedom from the internal control: 2.0
In Vietnam anyone has the right to travel and settle down in any part across the country in accordance with the 12thArticle in the set of Residency Regulations passed in 2005. The controversial thing is that the central government says that the new laws help move to another place easily. On the other hands, in practice itís not an ďabsolute rightĒ. First newly resident(s) must present and provide all kind of documentations such as history of family of both sides, and the recognition of a previously local government for clarification of geographical place of where he/ she or they lived before. If not, too bad, they have to go back and do all over again.
From the line 5 to 12 of the Enterprise Law 2005, Vietnamese citizens and legal residents can run any type of businesses as long as its activities are carried out within the framework and business laws. But the movements of businesses are always tracked by government agencies. Thus this makes harder for business owners to expand their plant.
1st source: http://www.nhanquyen.vn/modules.php?name=News&op=detailsnews&mid=41&mcid=7
2nd source: personal experience
3rd source: http://danluat.thuvienphapluat.vn/quyen-tu-do-kinh-doanh-trong-luat-doanh-nghiep-2005-34091.aspx
2) Freedom of speech: 1.0
Unlike other industrialized nation, freedom of speech is being molded and restrained by the iron hands of Cong San Viet Nam (CSVN). Ironically People fear to give public speech, are tremble to give individual opinions in political issues. It halves the potential development in the current economy. There is a common joke among native-born folks to describe state, ďyou have the right to criticize anybody, businesses, ads, and various things but donít touch sensitive affairs of the current government and its corrupted officials, otherwise you can be found nowhere by the next sunrise.Ē In other words, people have to accept reluctantly whatever governmentís ideas are.
1st source: personal experience.
3) Effective, fair police force: 1.0
A big loophole does exist and can be deprived as one-sided tool which only belongs to umbrella the corrupted CSV. In Vietnam people are used to call a taxi or use any available vehicle to drive injured person(s) to the nearest hospital if they happen to be there, witness a car crash. Why donít they try to call emergency number for an ambulance or the police? Well, itís just because it will take half of a year to finish that call. The receptionist on the other line would ask you many ridiculously trivial questions. Wait! How about the police? You may think twice after reading this. Generally speaking, most hospital faculties, and law enforcement are like brotherhood. They have same the characteristics looking down on the poor, the law-abiding citizens. According to BBC news, public website writing and publishing day-to-day events in Vietnam, the police attacks, beats up and puts many patriots in prisons. All these passionate people did is just to get on streets and gather in groups to protest peacefully the expenditure of China on sovereign and sea of Vietnam. Because of the rotten law enforcement, Vietnamese citizens underestimate the police and keep committing crimes over and over again. Therefore, entrepreneurs often think twice before expanding their businesses.
1st source: http://www.bbc.co.uk/vietnamese/
2nd source: personal experience.
4) Property rights: 2.5
In Vietnam, local government and its committees often respond poorly and ineffectively in any respect of property rights. As a matter of fact, all victims are usually illiterate. According to innumerable humanists and foreign journalists who had experiences of the living of its people in short stay Vietnamese famers are often forced and compelled to sell off their ancestral lands to the government under market price. Then the government will resell them back to businesses and firms to generate, so to say, legal profits with eligible documentations on bloody and sweaty body of the farmers. Afraid of losing properties to the government, major numbers of well-known corps have stopped to invest in Vietnam recently.
5) Commercial Banks: 4.0
Commercial banks in Vietnam lend money to businesses and public services. It hasnít functioned well of late due to the shocking wave of global economy.
The Vietnamese commercial banking system includes: 35 branch offices of foreign banks and representative offices, 6 financial companies and foreign banks. Like most the countries in the world, the State Bank of Vietnam is the top of banking system which has the greatest obligation to issue and print currency, Dong. The birth of many international and national banks in Vietnam facilitates the movements of commerce by using credit system in many aspects of business activities. Source: http://www.vietnamonline.com/az/banking-system.html
6) Communication systems: 3.0
Vietnam is putting considerable effort into modernization and expansion of its telecommunication system. Nowadays people can communicate to others internally and externally such as international phone cards which is available at any local post office. For all provincial exchanges, they are digitalized and connected to Hanoi, Da Nang, and Ho Chi Minh City by fiber-optic cable or microwave radio relay networks; main lines have been increased, and the use of mobile telephones is growing rapidly
The internet usage statistic of 2012 shows a number of 30,802,752 Internet users as of February/2012, 34.0% of the population, according to VNNIC.
1st source: http://www.internetworldstats.com/asia/vn.htm
2nd source: personal experience.
7) Transportation: 3.5
Railways, cars, buses, water ways, air travel promote the connection among provinces in Vietnam smoothly.
Trains in Vietnam run along the coast from Sai Gon City, Vietnam to Hanoi, Vietnam that takes around 30 to 40 hours. There are further railway links from Hanoi to Haiphong, Dong Dang, Lao Cai, Thai Nguyen, and from Yen Vien to Ha Long and other northern regions. It helps transporting raw materials or products to exact destinations quicker and the cost of transportation by a means of the use of railroad is often less than other options.
Vietnam communications network is facilitated by 20 domestic airports and 3 international airports. There are regular services provided between Hanoi, Sai Gon, Hue, Danang and Nha Trang, the type is likely to have most benefits from this network in business is tourism. Cars are also available in Vietnam for hire. These are chauffeur-driven cars that help in easy communication in Vietnam for the visitors. Vietnam being divided into regions and provinces, it has bus stations built across the country. Though buses are generally crowded in Vietnam, nevertheless it gives good opportunity to the visitors to know the Vietnamese people. There are certain long distance buses available, which are air-conditioned and hence more comfortable.
1st source: http://www.asiarooms.com/en/travel-guide/vietnam/useful-information/vietnam-communications.html
2nd source: personal experience.
8) Education: 2.0
Vietnam has recently accepted the need for a comprehensive transformation of its higher education system. In 2005, the Ministry of Education and Training developed a Higher Education Reform Agenda (HERA), a blueprint for reform of the system by 2020. The Government of Vietnam recently approved the main elements of the Agenda, including a proposal to give universities and colleges the right of autonomy. Measures supportive of institutional autonomy in higher education now need to be addressed. In particular, there is a need for legislative and regulatory reform, the establishment of appropriate accountability relationships, the development of leadership and managerial expertise at the institutional level, and the building of confidence and trust in the processes of institutional self-governance.
9) Social Mobility: 2.5
The Doi Moi economic reforms introduced since the late 1980s in Vietnam implied the shift away from collective agriculture, the endorsement of private economic activity, and the legislation of foreign investment. The growing market is leading population out of shared poverty that characterized the period of subsides and collectivization. But the process is also producing greater degrees of socio-economic differentiation at multiple scales: between households, ethnic groups, villages, and regions.
1st source: http://wber.oxfordjournals.org/content/13/2/211.short
2nd source: http://www.ud.edu.vn/bankhcnmt/zipfiles/so27/r.05.binh-bui%20quang%20thunhap-pr08.pdf
3rd source: http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/colas15&div=16&id=&page=
10) Freedom from outside control: 4.0
On 2 September 1945 the president Ho Chi Minh read the declaration of independence at Ba Dinh Square, Ha Noi Vietnam. After the ending Vietnam in 1975, Vietnam is an independent country, not under control from the outside. But all aside Vietnam still has many difficulties to deal with for the time being.
Source: personal experience
11) Protection of Domestic Enterprises: 3.0
The apparent early success of the new Enterprise Law 2005, in terms of sudden increase in formally registered local private firms since implementation in January 2006, has fed optimism regarding domestic private companies to fill the vacuum and produce additional jobs. Information on actual developments regarding employment creation in private sector, however, continues to be sparse and incomplete.
12) Foreign currency transactions: 2.5
Accordingly, the General Directors (Directors) of credit institutions with forex service license are allowed to set the buying and selling exchange rates for spot transactions between VND and foreign currencies under the following principles: For USD: the maximum exchange rate shall not exceed +1% of the average exchange rate of the inter-bank market of the previous business day announced by the SBV.
For other foreign currencies: the exchange rate shall be determined by the General Directors (Directors) of credit institutions. On August 24, 2012, US dollar rate in commercial banks is quoted at VND20, 860 per $1 for buying and VND20, 875 per $1 for selling a decrease of VND5 compared to a day before.
13) Border Control: 1.5
Vietnam Border Defense Force (BiÍn phÚng Vi?t Nam) is a branch of Vietnam People's Army and is under command of Ministry of Defense (Vietnam). It has important roles in protecting Vietnam's sovereignty, maintaining security at land and sea borders. Vietnam Border Defense Force is established on 3 March 1959. It is organized into 3 levels: National Command, Provincial Command and Local Post.
On documentations and papers show that Vietnam has its own borders and no foreign nations can cross over without approvals from the central government. But Vietnam Border Defense Force, usually local and provincial command, has been weakened in recent years and seems to be hopeless to ward off smugglers and invasions of Vietnamís neighbors.
14) Currency: 3.0
The dong (VND) is Vietnamís official currency. Arriving tourists or foreign businessmen can change their dollars at banks, hotels, and authorized exchange bureaus. Major hotels often offer the same rate as banks. Smaller hotels may charge an extra fee for exchange. With the government's crackdown on the use of foreign currency within Vietnam, the use of dollars in the country is less easy than it used to be. Shops that used to accept payment in dollars are now obliged to ask for payment in the local currency only. People are required to exchange money at banks or other authorized currency exchange centers.
15) Culture, language homogeneity: 2.0
Vietnam is a multi-nationality country. It has 54 ethnic groups with about 86 million people. The Viet (Kinh) people account for 88% of the country's population and mainly inhabit the Red River delta, the central coastal delta, the Mekong delta and major cities. The other 53 ethnic minority groups, totaling over 8 million people, are scattered over mountain areas (covering two-thirds of the country's territory) spreading from the North to the South. Thus, local enterprises are often encountered difficulties when they start business within their geographical environment.
Every ethnic group has its own culture and customs. A new type of business has intention to open a line of its business in an ethnic group must spend a consuming amount of time to investigate and predict all sorts of problems, laws often donít apply to minority groups, may happen before and after running a line there. With total 54 ethnic groups all over place in Vietnam, this could be one of obstacles for business owners to invest and expand their plant.
16) Political effectiveness: 2.0
Rural poverty is a phenomenon that is widespread yet often ignored by policy makers and researchers. Vietnam is not an exception. In relation to land reform, farm restructuring and the development of rural markets and in the context of a large gap between rural and urban incomes and deteriorating rural social services and infrastructure shows Vietnam hasnít accomplished. Although in most countries rural poverty has been decreasing in the past few years, economic growth in rural areas is slow, and rural incomes are not Ďcatching upí with the rapid overall growth rates of these transition economies. In general, the livelihoods of rural dwellers remain relatively poor.
Vietnam located in Shouth Asia and is the target of many big typhoons in fall. People settle near river banks and sea coast often go to higher lands to avoid landslide, high waves, and flood. Moreover, the government doesnít seem to sympathize to their citizensí sufferings. All aids and supplies from different organizations of charity are often the subject of income to greedy officials during disaster season.
17) Institutional stability: 2.0
The Socialist Republic of Vietnam (SRV) is a one-party communist state. Although conservatively communist, Vietnam has undertaken some reforms in recent years. The political stability of Vietnam lies in the strength of its single, undisputed ruling political party, the Communist Party of Vietnam (CPV). Institutions in Vietnam such as schools, enterprises, and the government are fairly stable. But this is just a matter of time before these are falling apart because of a poor government system in which its people have no right to express their desires of a bright future. Graduate students canít find jobs after years of study. Businesses are closing one after another because of foreign enterprisesí pressure. The level of national debts keeps increasing.
Source: http://www.austrade.gov.au/Vietnam-profile/default.aspx Source: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/VIETNAMEXTN/0,,contentMDK:22784733~pagePK:1497618~piPK:217854~theSitePK:387565,00.html
18) Honest Government: 1.0
Over the past decade, Vietnam benefited greatly from economic reforms and a wealth of foreign investment. During the heyday, it was all too easy for the countryís leadership and the Communist Party to hide the waste and corruption behind skyrocketing economic growth.
The waste, corruption, and poor management that have been the norm are now the target of government crackdowns, if only to maintain legitimacy in the eyes of the people. A power struggle between the prime minister and president, state enterprises deep in the red over senseless business endeavors and the arrests of banking officials have all signaled to the Vietnamese people that these are uncertain times.
Many Vietnamese turned to the websites for information on the recent arrest of a high-profile bank investor, Nguyen Duc Kien. His arrest triggered a wave of deposit withdrawals at the bank he co-founded and led to a plunge in the sharemarket.
Vietnam frequently arrests bloggers and activists who it says spread anti-state propaganda, a charge that can lead to a jail sentence of up to 20 years. Five journalists and 19 bloggers are in jail, more than in any other country except China and Iran, says Reporters Without Borders.
19) Common Laws: 2.0
Vietnam is a developing nation, and this makes really hard to unify the whole country under the same regulations. As a result of a poor management, many rural areas, not big cities, have different sets of laws and policies. A new enterprise happens to build a new plant in which people have different taste would be encountered many unexpected laws and policies from local committees. In other words, common laws do not exist in Vietnam.
Discriminations still happen in Vietnam between those who live in rural areas and those who settle in big cities. All laws attempt to satisfy city folksí needs but a burden on the shoulders of the village dwellers. Education is limited to the countryside and barely to be improved in very recently. Yet in big cities children enjoy unlimited education. Medical care is under development. They donít have any sanitary clinic to meet the demand of country folks. While the modernized cities have various healthcare centers. Moreover, city folks often take away lands in rural place to build golf courses and villains at the price under market value. They are hopeless to ward off these city folks. Some young members of households have to leave the village to get into cities, struggling in an effort to earn for living and support those who left behind; they are often elderly and terminally ill people.
20) Central bank: 1.0
The Vietnam National Bank was founded in1954 and had relatively independent operations in the financial system. Ever since the State Bank of Vietnam has accomplished its role in controlling money supply and enforce monetary policies to other banks, this is what government website says. But Corruptions often happen among members of the banking system. Recent events, a numbers of scandals, in the Vietnamese banking industry highlight its vulnerabilities to shocks and could put financial stability at risk, increasing the potential for negative rating actions on banks. Vietnamese banksí ratings are already among the lowest in Asia Pacific.
One of these scandals is the recent arrest of a high-profile bank investor, Nguyen Duc Kien. His arrest triggered a wave of deposit withdrawals at the bank he co-founded and led to a plunge in the sharemarket.
21) Domestic budget management: 1.0
Government expenditures in Vietnam in 2011 were 37.9 billion USD, whereas in 2011 the government revenue was valued at 32.119 billion USD. Therefore the deficits were 5.781 billion USD.
In 2010 Government expenditures were 18 billion USD, while total government revenue was 26.7 billion USD. Thus the deficits in 2010 were 8.7 billion USD.
In 2009, governmentís collection of tax was 18.6 billion USD and the expenditures were 25.381 billion USD. The deficits were 6.781 billion USD
The fact that Vietnam has a weak government in management national budget is quite clear. There is no need for more clarification to accept this bitter fact. Moreover at the end of 2011, the current account deficit was 4.7% of the GDP. The deficits halve the growth of GDP and increase inflation rate.
22) Government debt: 1.0
As the economy crisis is taking place across the whole world, Vietnam recorded a Government Debt to GDP of 38.00 percent of the country's Gross Domestic Product in 2012, still increasing. Historically, from 2001 until 2011, Vietnam Government Debt To GDP averaged 35.87 Percent reaching an all-time high of 38.40 Percent in December of 2009 and a record low of 31.90 Percent in December of 2008.
Generally, Government debt as a percent of GDP affects the foreign investorsí profit motive; for they measure a country ability with these percentages to see whether this country can affords to make future payments on its debts.
23) Economic statistics: 2.5
Most of economic and business statistics, provided by governmentís websites in Vietnam, are not considerable and mislead individuals about the current enterprisesí activities. Therefore, As of September 2012, a project was launched to improve statistics quality in the entire economy of Vietnam. The US$5.97 million project will receive US$4.5 million from the United Nations Population Fund (UNFPA) and US$800,000 from the United Nations Human Settlements Programme (UNHABITAT). Its objective is to improve the quality of collecting, analyzing, forecasting and disseminating data on population, and reproductive and sexual health, to help make socio-economic development plans and monitor socio-economic development strategies and the implementation of the millennium development goals.
24) Protection of public health and safety: 2.5
Infant mortality rate: total: 20.24 deaths/1,000 live births male: 20.61 deaths/1,000 live births female: 19.83 deaths/1,000 live births (2011 est.)
The government will only collect the statistic of infant mortality rate at the end of the current year, so in this case the data above only represents the year of 2011.
Compared to The US, The mortality rate of tuberculosis is much higher in third world countries, including Vietnam, than it is in the United States: that is 5.98 deaths/ 1000 live births.
Compared to Japan, this industrialized nation has an incredibly low birth death rate. It is 2.21deaths/ 1000 live births, which surpasses the USís
As a matter of facts, Vietnam is placed at 94th of countries having high infant mortality rate in the year 2011. As a result, public health and safety is substantial enough to support peopleís needs in the country.
25) High wage policies: 2.5
According to the Geneva-based International Labor Organization, Vietnam had 336 strikes in the first four months of 2012 because of the wage average too low, and thatís on course to beat the 2011 record of 762.
To solve this problem, Vietnam National Assembly or the Congress passed planned state budget for 2012 this morning in which it approved to raise minimum wage by 26.5% to VND 1,050,000, applicable from May 1st, 2012. The resolution also stated that the Congress approved the Government to continue tightening the fiscal policy, restructuring budget expenditures to give priorities for people, social security, development investments to improve the economic growth.
26) Environmental protection: 1.0
Urbanization, planning, industrialization, and intensive farming are having a negative impact on Vietnamís environment. These factors have led to air pollution, water pollution, and noise pollution, particularly in urban and industrial centers like Ho Chi Minh City and Hanoi. The most serious problem is waste treatment. Land use pressures have led to significant environmental problems, including severe deforestation, soil erosion, and sedimentation of rivers, flooding in the deltas, declining fish yields, and pollution of the coastal and marine environment.
Chemical abuse on plant is one of the hottest topics when it comes to open enterprises in Vietnam. Businesses depend on population in order to generate profits, and people are willing to settle down in a place of clear and safe environment from chemical substances especially in agriculture.
At the provincial level, the Departments of Science, Technology, and the Environment bear responsibility. Non-governmental organizations, particularly the Institute of Ecological Economics, also play a role.
27) Strong army: 1.0
Small and developing nations depend on international agreements to strengthen their defense when invasions happen. Vietnam is not an exception. Vietnam government has signed one of agreements to tie the bond of its relationship with the States, the most powerful country in the economy and politics.
Having a bond with the US doesnít mean Vietnam can protect the businesses from bandits and smugglers cross Vietnamís borders to enter freely. In other words, Vietnam has a week Defense Force in all aspects of the military. Essentially still a large infantry-based force, the People's Army of Vietnam (PAVN) is one of the most capable land formations in South East Asia. However, Lack of funding, modern equipment and a desperate need to restructure are problems that soon may erode this position.
28) Foreign trade impact: 2.0
According to the report from GSO Vietnam in year 2011, the export turnover is estimated reaching 72.3 billion USD and the import turnover is around 81 billion USD. The total revenue from foreign trade is USD 155.6 billion, accounting for 58.6% of the total GDP of 334.967 billion USD as the end of the year.
As of 2011, foreign trade contributed 45% (more than 33%) of the national income, while the rest 55% was made up by the local companies, unreliable information to individuals. Vietnam still has an unstable economy because it depends too much on foreign trade to generate income.
29) Management of foreign currency budget: 3.0
As per the General Statistics Office (GSO) of Vietnam, the 2009 export turnovers were estimated to be US$56.6 billion, reflecting a drop of 9.7% from 2008. The import turnovers of 2009 were anticipated to be US$68.8 billion, which showed a drop by 14.7% from 2008. Although the decreased import turnovers were higher than export turnovers, the 2009 trade deficits was estimated to be US$12.2 billion, reduced by 32.1% reported in 2008 and equaling 21.6% of the total export turnovers of 2009.
On January 14, 2011, Mr. Vo Hong Phuc, Minister of Planning and Investment, said in his "Review of 10 years of implementing the socio-economic development strategy and lessons for the coming decades" that even though over the past 10 years, Vietnam GDP reached 7.26% per year; growth quality, productivity, efficiency and the competitiveness of the economy is still low and macro balances are unstable. Export products are mostly raw materials and industrial goods are mainly manually made. Productivity is much lower than regional economies, for example 2.6 times and 4.3 times lower than China and Thailand respectively. Energy losses are huge. In order to turn out $1 of GDP, Vietnam uses about 4.65 times more power than Hong Kong, 2.10 times compared to South Korea and 1.69 times to Malaysia, reported Vietnam News Agency.
Foreign currencies have also been flowing to Vietnam through other channels, including the foreign direct investment (FDI), foreign portfolio investment, kieu hoi (overseas remittance). The dong/dollar exchange rate has been stabilized at 20,850 dong per dollar.
30) Layers of collective actions: 2.0
Vietnam was formally unified under a communist government. By 2000 it had established diplomatic with most nations but still suffers from relatively high levels of income inequality, disparities in healthcare provision, and poor gender equality. And also, Vietnam lacks of collective actions internally. Many provincial cities in Vietnam are quite small and have shortage of private enterprises. With various disadvantages of a small country and unbalanced numbers of enterprises lead to so many decisions of economy made within the limits, depending on the government. For instance, residents in one location canít vote for the local officials they have to accept whatever, whoever the central government appoints to work with regardless of local residentsí opinions. As a result, Vietnamese people in the country barely co gather enough experience to succeed in business.
Source: Personal experience
31) Pro-business climate: 3.5
There are no limitations on the number of business locations a private enterprise may have. A private enterprise may also open branches and representative offices as long as they are appropriately registered regarding of Government Decree 88/2006/ND-CP, dated 29 August 2006. Since 2000, education system in Vietnam has been improved and considered internally and externally. Many new colleges were rebuilt, most community colleges, and have been offering a variety of business career for all kind of people to acquire pro-skills and catch up the current growth of the economy.
Vietnam is widely opening its hand to welcome any type of businesses as long as these enterprises practice the prescribed laws in trading, and producing goods and services. Local government always encourages its residents within provinces or prefectures to open up businesses. As we mentioned above, business major is one of the hottest area of studies for college students. The business major offers and broadens knowledge of the students in search of successful businessmen or investors. Not only students can open business after graduate but others can also startup their own businesses from current assets and borrowing money from banks. On the scale from 1 to 10, there are actually 4 out of ten having their own stores or factories in an effort to generate profits according to one of the latest business report on Cong An newspaper released 3 months ago in Vietnam. But not all of them become successful. The word business and enterprise are quite common in Vietnam compared to what before the reforms in the 1980s.
Source: personal experience
32) Government enterprises: 2.0
In Vietnam, The government still withholds more than 35% of total domestic businesses and large corporations. In those enterprises, the government has been countered a great deal of losses during the year 2009-2012. Many Government enterprises run out of businesses, default their internationally large debts up to billions of dollars, and have gradually failed to meet the expectations of foreign investors. These catastrophes can be perceived as warning signs for the government. Many critics think the government should loosen its power over domestic enterprises otherwise the relationship between Vietnam and other foreign countries will get worse.
Source: personal experience.
33) International security agreement: 3.5
Vietnam government has started to expand and sign various treaties with other neighbors such as Cambodia, Laos, China, and The US in search of new markets and strengthen military forces. For example, Vietnamese Foreign Minister Pham Binh Minh attended the ASEAN Foreign Ministers' Meeting (AMM), treaty on the Southeast Asian Nuclear Weapon Free Zone (SEANWFZ), was held in the Cambodian capital city of Phnom Penh on July 8, 2012.
34) Protection of domestic enterprises from government mandated cost: 3.0
Vietnam has seen a series of major tax reforms over the past decade. 2009 marked several major tax reforms and was the second step of the unification process of two separate tax regimes, which commenced in 2006, and included a single standard corporate income tax (ďCITĒ) rate of 25% for both foreign invested and domestic enterprises. More recently, the Vietnam Government has sought to alleviate the impact of the economic downturn by introducing a range of incentives, principally to qualified small and medium enterprises (ďSMEsĒ), certain hard hit sectors and to large employers. The incentives have ranged from deferral of tax payments and a 30% reduction of CIT. The Government continues its efforts to tackle existing issues within the tax regulations and has proposed further changes to be implemented in 2012. Compared to Chinaís preferential tax treatment in the enterprise income tax (EIT), both foreign and domestic enterprisesí profits within the borders of China are subject to the unified tax rate of 25% from ETT. Plus, a high-tech enterprise may qualify for a lower EIT rate of 15% if it independently owns the core technology utilized in its business and fulfills other prescribed conditions while Vietnam government doesnít concern much in this particular idea. There is just a slight difference between China and Vietnamís tax policies but the tax laws from both sides show businessmen and investor a great deal of potential prosperity from opening or investing into these two nations. China seems to attract large and widespread corps to start up their branches in its soil. On the other hand, Vietnamís tax treatment tends to stimulate small businesses such as proprietorship and partnership to expand at local market places
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