| Businessmen are
experiencing a very difficult period when the input costs have been increasing
dramatically, while the purchasing power remains weak. However, they still
drive luxurious cars, spend hundreds of millions dong on parties and throw
money to frivolous expenses. Vietnamese
businessmen have been advised to cut down expenses and spend less money to
rescue businesses from the current difficulties. However, the plans to cut down
expenses remain just “slogans” that remain on paper. In fact, they still “throw
money down the drain”, because they believe that spending much money is “the
job of millionaires”. 30 percent of businesses bankrupt According
to Le Dang Doanh, a well-known economist in Vietnam,
trade deficit, high inflation and high interest rates are all the most
outstanding features of Vietnam’s
economy. He said that the current difficulties are the consequences of the
problems of the national economy which have existed for many years and remain
unsettled, and the consequences of unreasonable policies applied in the last
many years. Though
there have been no official statistics, the well known economist has cited the
figures from the taxation bodies as saying that it is estimated that 30 percent
of registered businesses have been bankrupted. The number
of newly established businesses and the total volume of registered capital have
also decreased significantly. In the first four months of 2011, the number of
newly registered businesses was just equal to 90.4 percent, and the volume of
registered capital was just equal to 78.6 percent of that in the same period of
2010. The figures show that the capability to access loans and the business
opportunities have decreased sharply. The Vietnam
National Oil and Gas Group (PetroVietnam) has been well known as a giant
economic group which contributes 30 percent of GDP and 20 percent of the state
budget. However, in order to stand firmly in the current difficulties, Tong
Quoc Truong, Head of the Investment and Development Division of PetroVietnam
said that the group now has to restructure the investments and narrow the
operation scale. PetroVietnam
initially planned to use 127 trillion dong for investment projects in 2011.
However, as the dong/dollar exchange rate has been fluctuating sharply (the
dollar price has surged from 18,500 dong per dollar at the time when the
investment plan was drawn up to 21,000 dong per dollar), which has made the
total investment capital needed increase dramatically, PetroVietnam has to
delay some projects. The number
of delayed projects accounts for 10 percent of the planned investment projects,
capitalized at 12,700 billion dong. Tran Anh
Vuong, Chair of Bac Viet Steel Corporation, said that the difficulties in 2011
are bigger than in 2008, while the difficulties in 2008 were bigger than in
2005, and the situation in 2005 was worse than that in 2000. This shows that
difficulties always exist. When VVG
entered the bourse in 2008, VVG shares were traded at 23,000 dong. However, the
share price has plunged to 7000 dong. “Businesses have been told to restructure
businesses and sell parts of assets, but who will buy the assets in such circumstances?”
Vuong said. Practicing thrift – the best policy Ha Thu
Thanh, General Director of Deloitte Vietnam, an auditing firm, noted
that despite the big difficulties, businessmen still spend much money because
they want try to show off by driving luxurious cars and attend luxurious
parties. “I have
been working as a general director for 13 years, but I have never driven too
luxurious car. When I go to a meeting, I take taxi,” Thanh said. “Meanwhile,
directors of small companies like driving super cars which cost their
businesses a lot of money”. “Saving
money to create finance governance efficiency is the thing enterprises should
prioritize at this moment,” she said. A
businessman, who specializes in exporting goods to China, told Doanh that he needs to
eat two turtles a week (85 million dong for each), or he feels unpleased. “This is a
kind of frivolous expense,” Doanh said. Doanh went
on to say that Vietnamese businesses should follow in the steps of a Japanese
supermarket, which has stopped the escalator system to save electricity, and
follow in the steps of American people, who walk to the office after the
meetings with partners. Though
Doanh admitted that in Vietnam,
joining parties is the most popular way to establish new relations, he has advised
businessmen to exchange views and work together without beer and alcohol. Nguyen Nga | 
