Vietnam’s Politburo has released Resolution No. 68-NQ/TW, a directive that repositions the private sector as “the most important driving force” of its socialist-oriented market economy. It calls for sweeping reforms to remove systemic barriers and elevate the private economy’s share of GDP beyond 60 percent by 2045.
Key points of note:
- Recognition of private sector’s role: The resolution acknowledges that the private economy contributes 50 percent of GDP and employs 82 percent of the workforce, but remains constrained by low productivity, weak innovation, and limited global integration.
- 2030 targets:
- 2 million enterprises in operation (from 940,000 in 2024)
- Private sector to contribute 55–58 percent of GDP and 35–40 percent of state budget revenue
- Productivity growth of 8.5–9.5 percent per year
- At least 20 large Vietnamese firms participating in global value chains
- 2045 vision:
- 3 million enterprises
- Over 60 percent of GDP from the private sector
- High regional and global competitiveness
Core reforms proposed:
- Institutional overhaul: Reform legal frameworks to protect property rights, ensure business freedom, reduce compliance costs, and eliminate outdated, overlapping regulations by 2025.
- Tax and land access: Streamline land-use approvals and offer tax exemptions for new SMEs; introduce AI in inspections; shift from pre-licensing to post-auditing.
- Capital mobilisation: Enhance SME access to credit, introduce peer-to-peer lending regulations, and leverage sovereign funds and pension funds for long-term capital.
- Digital & green transformation: Allow 200 percent R&D tax deductions; offer incentives for ESG-compliant projects; launch national innovation centres.
- Private–public linkages: Encourage PPP models and tech transfer from FDI firms; aim to develop 1,000 tech-savvy “pioneer” firms.
- Micro-enterprise support: Phase out lump-sum tax by 2026, digitise reporting for household businesses, and provide free legal and accounting tools.
- Entrepreneurship: Foster business ethics, protect entrepreneurs from overreach, and create clearer distinctions between civil and criminal liability in business disputes.
This resolution looks great on paper, however, resolutions often tend to be overly optimistic and targets are often well beyond what is realistically possible.
Some food for thought: Notably absent from the resolution is a clear outline of how these private sector development objectives will work with the objectives of the state-owned sector. For example, how will it ensure equal access to resources? Will it allow state-owned enterprises to fail? Or will it save private enterprise the way it has historically saved SOEs?
That is to say, there are a lot of questions that still need to be answered, however it does add weight to the economic policy direction the government has said it intends to take moving forward.
See also: Vietnam’s Private Sector Development Push: Unpacked