Some of Vietnam's big firms rely heavily on risky speculation in land and equities to generate profits as they adapt to global competition, UN economists said Monday.
A survey of 200 of the largest firms, most of them state-run, found them to be "dynamic and ambitious", but lacking sufficient help from government to gain access to export markets, acquire new technologies and train workers.
"One cause for concern is that state-owned enterprises are drawing down most of the investment but they are not producing many jobs," United Nations Development Program economist Jonathan Pincus told a news conference.
Vietnam joined the World Trade Organization in January, a milestone in its 20-year-long policy of creating a market economy.
Vietnam's biggest companies are small in global terms, but an estimated $8.3 billion in foreign direct investment pledges has this year poured into an economy growing at over 8 percent.
"The incentive structure at present encourages firms to invest in assets like land and shares where they can make quick returns," Pincus said. "That doesn't mean much to the overall productivity of the Vietnamese economy."
Real estate prices are at record highs and the main Ho Chi Minh Stock Exchange is up 44 percent this year.
Policies such as land tax, property tax and capital gains tax do not exist in Vietnam as they did in Japan, South Korea and Taiwan when they were at similar stages of development. Big conglomerates helped fuel the growth of those economies.
Vietnam's big companies should invest in core businesses to improve technology and products and increase the need for infrastructure and capital, the economists said.
Since WTO entry, Vietnam has attracted further investment in electronic components assembly and other areas.
The year-long survey "Top 200: Industrial Strategies of Vietnam's Largest Firms" found that many companies were dissatisfied with the education and training of Vietnamese institutions.
The young workforce – about half of Vietnam's 85 million people are under 35 – was considered trainable and hard-working by senior management, according to the report.
The research included state-owned, private and joint venture foreign companies and were chosen based on labor, assets, turnover and tax.
"One cause for concern is that state-owned enterprises are drawing down most of the investment but they are not producing many jobs," United Nations Development Program economist Jonathan Pincus told a news conference.
Vietnam joined the World Trade Organization in January, a milestone in its 20-year-long policy of creating a market economy.
Vietnam's biggest companies are small in global terms, but an estimated $8.3 billion in foreign direct investment pledges has this year poured into an economy growing at over 8 percent.
"The incentive structure at present encourages firms to invest in assets like land and shares where they can make quick returns," Pincus said. "That doesn't mean much to the overall productivity of the Vietnamese economy."
Real estate prices are at record highs and the main Ho Chi Minh Stock Exchange is up 44 percent this year.
Policies such as land tax, property tax and capital gains tax do not exist in Vietnam as they did in Japan, South Korea and Taiwan when they were at similar stages of development. Big conglomerates helped fuel the growth of those economies.
Vietnam's big companies should invest in core businesses to improve technology and products and increase the need for infrastructure and capital, the economists said.
Since WTO entry, Vietnam has attracted further investment in electronic components assembly and other areas.
The year-long survey "Top 200: Industrial Strategies of Vietnam's Largest Firms" found that many companies were dissatisfied with the education and training of Vietnamese institutions.
The young workforce – about half of Vietnam's 85 million people are under 35 – was considered trainable and hard-working by senior management, according to the report.
The research included state-owned, private and joint venture foreign companies and were chosen based on labor, assets, turnover and tax.
Source: Reuters
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