Under the US$ 22.1-million project, which will be carried out during September 2018-September 2023, the three parties will work together to enhance supply and linkage capability of SMEs, and improve the capabilities of business organisations in Vietnam in supporting SMEs’ development.
Strengthening business linkages between SMEs and leading firms is expected to advance the Indo-Pacific vision of improved economic competitiveness, and support USAID’s objective of expanding inclusive, market-driven, and private sector-led growth in Vietnam.
According to Minister and Chairman of the Government Office Mai Tien Dung, LinkSME will contribute to making systematic changes in the business environment through promoting institutional reform, streamlining regulations and administrative procedures, reducing compliance cost to better SMEs’ competitiveness.
“The project plays an important role in the country’s sustainable development, and ability to escape middle-income trap in the coming decades”, Dung underlined.
Minister of Planning and Investment Nguyen Chi Dung said thanks to the Government’s strong reform, local firms have made substantial progress in the past two decades. Currently, Vietnam has 730,000 operating enterprises, 97 percent of which are SMEs.
SMEs have contributed greatly to the nation’s economic growth and sustainable development by creating jobs and improving living quality of workers, he stressed, adding they are an important link of the value chain to better competitive edge for Vietnamese exports.
However, the firms are lacking in capital to renew technologies and expand production scale, while their management capacity remain poor and supply chain linkages among the SMEs are still limited, he pointed out.
Therefore, LinkSME is hoped to support the Vietnamese Government to address challenges for the SMEs, promote their linkage ability and encourage them to reach out to the global market, he added.
Sharing the same viewpoint with Minister Dung, US Ambassador Daniel J.Kritenbrink said SMEs play an important role in the Vietnamese economy as they contribute 45 percent of the nation’s GDP.
As their operation has been hampered by shortage of linkages to the global value chain, LinkSME is expected to help the SME community run their business effectively, contribute more to the national economic growth, and promote competitive capacity, he added.
Since 2018, the Government has carried out comprehensive measures to simplify 3,451 out of 6,191 administrative procedures. Meanwhile, 6,776 out of 9,926 product lines subject to specialised inspections have been cut, and 30 related administrative procedures have been simplified, helping save over 18 million man day a year, equivalent to over VND 6.3 trillion (US$ 271.7 million) a year.
