Overview of Vietnam’s Private Sector: 20 Billionaires and Challenges Ahead
The rapid growth of Vietnam’s private sector presents both opportunities and challenges for the economy, as billionaires emerge and major corporations still lag behind global giants.
Vietnam’s private enterprises are experiencing significant growth, particularly with the rise of new billionaires in the digital age. Estimates suggest that there are currently about 20 billionaires in Vietnam, though many do not disclose their wealth. This insight comes from a conversation with Mr. Tran Si Chuong, an economic expert with nearly 30 years of experience, discussing entrepreneurship and the development of private businesses in Vietnam.
The $70 Billion Mark and the Gap with the World
When discussing the estimated $70 billion total assets of the 12 largest private corporations in Vietnam, Mr. Tran Si Chuong commented, “This figure is only equivalent to that of a single foreign corporation; for example, Elon Musk’s personal wealth is twice the GDP of Vietnam.” This highlights that, despite the progress made by Vietnam’s private sector, there remains a significant gap when compared to global conglomerates.
On the other hand, Mr. Chuong pointed out that the number of billionaires in Vietnam is growing, fueled by technological advancements and the digital economy. New billionaires can emerge almost overnight in the era of AI and digitalization. However, the key question remains: does an increase in the number of billionaires equate to the nation’s strength and sustainable development?
Key Data on Vietnam’s Businesses
In light of Vietnam Entrepreneurs’ Day on October 13, the Vietnam Enterprise White Paper 2024 presents crucial data, painting a clear picture of the national business landscape. Vietnam currently has 921,327 operating businesses, with the service sector accounting for the largest share at 68.2%, followed by industry and construction at 30.5%, and agriculture, forestry, and fisheries making up just 1.3%. The shift from agriculture to services is particularly evident.
The report also highlights the concentration of major enterprises in key cities, with Ho Chi Minh City and Hanoi accounting for over 50% of all businesses in the country. However, only 44.6% of businesses are profitable, while 46.9% are operating at a loss, indicating the significant challenges facing companies in today’s economic environment.
Challenges for Private Enterprises
Despite the growth of the private sector, there are substantial challenges ahead. One of the most pressing issues is the high debt levels of large corporations, with the average debt-to-equity ratio at 2.15 times. The return on assets (ROA) for businesses is just 2.6%, while the return on sales (ROS) stands at 4.1%, revealing untapped potential that requires strategic exploitation.
These numbers reflect the overall landscape of Vietnam’s private sector – a fast-growing economy with vast opportunities but one that requires breakthrough strategies to close the gap with the global stage and ensure sustainable prosperity for the nation.
