In Vietnam, the private sector is increasingly seen as the linchpin of economic progress, with experts and policymakers alike emphasizing its potential to drive the country’s ambition to catch up with global economic leaders. With over 940,000 private enterprises and around 5 million household businesses contributing nearly 50% of the nation’s GDP, the sector is poised to play a transformative role—if given the right conditions to thrive.
Private Sector as the Cornerstone of Development
Vietnam’s economic landscape is heavily reliant on its private enterprises, which employ tens of millions of workers and account for more than 80% of jobs nationwide. These businesses also contribute approximately 30% of the national budget, underscoring their critical role in sustaining public finances. At a recent seminar titled Resolution 68-NQ/TW: Driving Force for Vietnam’s Private Sector Development held on August 15, Associate Professor Nguyen Thanh Loi, Editor-in-Chief of Economic & Urban Newspaper, highlighted the untapped potential of this sector. He argued that with a fair and favorable business environment, private enterprises could significantly amplify their contributions to national development.
The introduction of Resolution 68 marks a pivotal shift in Vietnam’s approach to economic policy. National Assembly deputy Phan Duc Hieu, a member of the Economic and Financial Committee, described the resolution as a fundamental change, addressing long-standing institutional bottlenecks in three key areas: reducing bureaucratic red tape, enhancing protections for businesses, and minimizing operational risks to unlock resources. However, Hieu was quick to point out that the real challenge lies in implementation. He noted that while ambitious plans, such as cutting 30% of business conditions, are under review, the sheer volume of work required to institutionalize these reforms remains daunting. In some instances, he added, reforms can be enacted without even amending existing laws, suggesting a need for agile and pragmatic governance. 
Associate Professor Tran Dinh Thien, a prominent voice in economic discourse, went further, asserting that the private sector’s growth is the decisive factor in determining whether Vietnam can bridge the gap with more developed economies. He emphasized that reliance on foreign investment alone will not suffice. Instead, the state must prioritize empowering domestic enterprises to take the lead in driving economic momentum. This perspective signals a significant departure from past strategies that heavily courted foreign capital, often at the expense of nurturing local businesses.
Hanoi: A Hub for Private Sector Innovation
Hanoi, Vietnam’s capital and a key economic center in the northern region, offers unique advantages for private sector growth. With a population exceeding 10 million—many of whom are high-income earners—the city ranks as the country’s second-largest market. Professor Hoang Van Cuong, Vice Chairman of the National Professor Council and a National Assembly deputy, pointed out that Hanoi’s geopolitical and diplomatic strengths, combined with its abundant human resources and strong capacity in science and technology, position it as a growth hub with immense potential for private enterprises.
Yet, Cuong stressed that Hanoi’s private sector should prioritize quality over quantity. He advocated for a focus on pioneering technology application and transfer, ensuring that businesses in the capital set a benchmark for innovation and efficiency. Resolution 68, he noted, opens new avenues for private companies not only to grow independently but also to participate in major state-led projects, many of which are based in Hanoi and hold significant economic promise.
The city’s administration is actively supporting this vision. Truong Viet Dung, Vice Chairman of Hanoi People’s Committee, outlined a series of measures designed to bolster private businesses, including streamlining administrative procedures, increasing transparency in planning, and ensuring equitable access to investment opportunities in socio-economic, infrastructure, and energy projects. Hanoi is also pursuing three strategic breakthroughs: more open institutional frameworks, enhanced infrastructure, and a workforce equipped to meet modern development demands. Regular dialogue with businesses is a cornerstone of this approach, ensuring that policymakers remain attuned to the needs of the private sector.
Looking ahead, Hanoi has set ambitious targets for 2025, aiming to have around 230,000 active businesses by the end of the year, equivalent to 27 enterprises per 1,000 residents. The private sector is expected to contribute between 50-55% of the city’s Gross Regional Domestic Product (GRDP), which is projected to reach 63.5 billion USD, reflecting an 8.5% growth rate. Of this, private enterprises are anticipated to account for 31.8 to 35 billion USD. Additionally, the sector is expected to contribute 45-50% of total budget revenue and create jobs for 55-60% of Hanoi’s workforce. To support small and medium-sized enterprises (SMEs), the city has issued over 80 policies for the 2026-2030 period, focusing on governance, production infrastructure, startup ecosystems, tax incentives, and financial assistance in key science and technology sectors.
Challenges and Opportunities Ahead
Despite the optimism surrounding Resolution 68 and Hanoi’s proactive measures, significant challenges remain. The process of institutionalizing reforms is complex and resource-intensive, requiring sustained commitment from both central and local authorities. For instance, while the goal of reducing business conditions by 30% is laudable, it is still under review, with no clear timeline for full implementation. This delay highlights a broader issue: the gap between policy formulation and execution, which could undermine the private sector’s confidence if not addressed promptly.
Moreover, while Hanoi’s advantages are undeniable, scaling these benefits to other regions of Vietnam presents a logistical and political challenge. Rural areas and less developed provinces may struggle to replicate Hanoi’s success without tailored support and infrastructure investment. Ensuring equitable growth across the country will be critical to preventing regional disparities from widening, a concern that policymakers must tackle alongside urban-focused initiatives.
Another key issue is the need for a cultural shift within Vietnam’s governance structures. Historically, the state has played a dominant role in economic planning, often overshadowing private initiative. Resolution 68’s emphasis on empowering the private sector requires not just legislative changes but also a rethinking of how government authorities interact with businesses. This includes fostering a mindset of partnership rather than control, a transition that may take time to fully materialize.
A Forward-Looking Vision
The private sector’s role in Vietnam’s economic future cannot be overstated. With nearly half of the nation’s GDP already tied to private enterprises, and with cities like Hanoi leading the charge through targeted policies and ambitious growth targets, the foundation for a dynamic, domestically driven economy is taking shape. Yet, the path forward is fraught with challenges, from bureaucratic inertia to the need for broader regional development.
As Vietnam continues to implement Resolution 68 and refine its support for private businesses, the question remains: can the state deliver on its promises to create an environment where local enterprises truly flourish? The answer will likely determine whether Vietnam achieves its goal of catching up with the global economic frontrunners in the coming decades.
