Creating motivation for businesses before the difficulties and challenges

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Creating motivation for businesses before the difficulties and challenges
Enterprises need to restructure in terms of strategy, organization, operation, finance and corporate governance in order to improve competitiveness, growth in assets, and financial transparency. Photo: H.Deu

This is one of the signs for the economy in 2023 will be full of challenges, forcing businesses to find solutions to cope and overcome.

As a long-time enterprise in the field of manufacturing and exporting construction materials, Ms. Dinh Hoai Giang, General Director of Secoin Building Materials Joint Stock Company, said Japan is the export market of enterprises from 1999 to present, but now many orders have suddenly stopped.

According to Ms. Giang, inflation has caused a serious drop in demand in this market. Not only Japan, many orders for other Secoin products to America or Europe also decreased.

Previously, leather, footwear and textile enterprises complained when orders fell, along with pressure on increased input costs, supply chain disruptions, and lack of capital for production activities. Therefore, many businesses had to cut workers, temporarily halted part of the production line, and even had to close down.

Dr. Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research, said that at present, external uncertainties are causing general difficulties for the Vietnamese economy, and at the same time they have had an impact on policy operating macro and business environment.

According to data from the General Statistics Office, in the 10 months of 2022; the number of enterprises withdrawing from the market increased by 25.8% over the same period in 2021, in which, the majority of enterprises chose the temporary form of business in the short term.

However, the good news is that Vietnamese enterprises still do not falter, still looking for ways to overcome difficulties, maintain production and business activities, seek new orders and expand markets.

But in 2023, many forecasters said that the instability would persist. Specifically, the price of input materials has increased; logistics and shipping costs are still high. Along with that, the import policies of some countries have changed when the requirements for quality standards of countries are increasing and difficult to predict. In particular, high inflation in many countries makes people tend to tighten their spending. Therefore, businesses need fundamental and long-term solutions for sustainable development goals.

Maintain initiative in the face of difficulties and challenges

Analyzing 21 financial indicators of enterprises in the two years of 2021-2022 of 26 industries with enterprises participating in Vietnam’s stock markets, Nguyen Manh Quan, Director of the Institute of Business Research and Development (INBUS), Hanoi University of Business and Technology, said that 18 out of 26 industries (accounting for 69%) had a share price increase of more than VND 10,000/share and dividends over 15%; many industries have good improvement in governance capacity.

Therefore, he said that Vietnam’s economic picture in recent years still has many positive signs. That means that the ability of Vietnamese enterprises to cope with difficulties caused by natural disasters is quite good. It is also a driving force for the economy to continue to grow.

Therefore, in order to create a breakthrough in development, Assoc. Nguyen Manh Quan said that it is necessary to have breakthrough thinking, a different vision compared to the traditional approach. Along with that, it is necessary to expand and increase access to the world economy faster and easier.

Also analyzing the development of enterprises in the economy, Mr. Le Duy Binh, Managing Director of Economica Vietnam, said that the period of relying on capital growth to increase productivity has passed and the private sector needs to look for other drivers to contribute to the increase in output and growth such as technology and human resources.

Moreover, according to Mr. Binh, the question we must answer in 2023 is how to bring the meager capital to create added value for the economy, what measures should be taken so that small and micro enterprises can access capital in the face of pressure and overwhelm by large enterprises and corporations.

Also according to Dr. Nguyen Quoc Viet, when there are difficulties and uncertainties that need to be faced, reform measures are necessary. However, these policies should not have sudden interventions, especially non-market interventions, and should be based on international practices, trade agreements, and investment agreements Vietnam has signed.

In addition, according to experts, in order to partially overcome difficulties for businesses, especially to reduce the passivity of market signals, specialized ministries need to periodically provide information on market variables and trends of major import and export markets, together with assessments of opportunities and challenges for businesses to have appropriate adaptation plans.

But at the same time, enterprises themselves also need to maintain the spirit of autonomy and self-reliance alongside the support of the State to maintain the initiative in the face of difficulties and challenges.

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