Trade associations need facelift

Handicrafts produced by the Ngoc Khanh Co in Ha Noi's Chuong My District. Trade associations have been ordered to boost their role in supporting enterprises in difficult times. — VNA/VNS Photo Trong Dat

Nguyen Xuan Son, chairman of the Viet Nam Association of Small-and Medium-Sized Enterprises, said that trade associations had to call for help on behalf of their members when needed.

According to figures from the General Statistics Office for the first half of the year, more than 26,000 enterprises had gone bankrupt or ceased operations, an increase of 5.4 per cent over the same period last year.

Capital shortage has been a major reason for bankruptcies. Although the State Bank decided to reduce interest rates to 13 per cent maximum, the implementation is different. Tran Hong Phuc, deputy general director of Renaissance Holdings Construction JSC, told Kinh te & Do thi newspaper that the company still borrowed at an interest rate of 15 per cent per year.

According to the Ministry of Industry and Trade, the country has more than 300 trade associations, founded to protect the interests of its members, however many of them did not assist in growth.

Under investigations by the Viet Nam Chamber of Commerce and Industry (VCCI), up to 71 per cent of associations do not have specific departments specialising in law.

Some operating in the mechanical industry, for instance, have not actively responded to association activities. Many believed that by sharing experience, customers would reveal business secrets, so they decided not to participate, according to Pham Thi Thu Ha, a member of the Viet Nam Association of Mechanical Industry.

She said many associations were born "just for fun". The activities of these have not been progressive or brought businesses many benefits, hence making enterprises afraid to participate. Moreover, it not only takes time but also money to pay membership fees.

Besides, some retired officials who kept high positions in State groups or offices often appeal to enterprises to establish associations in order to create fame. "They don't really worry about supporting their members," she said.

However, Deputy Minister of Trade and Industry Nguyen Thanh Bien said via the Government web portal that trade associations face a lot of difficulties such as lack of resources, specialised staff and a legal framework for development.

Dao Phan Long, vice chairman and general secretary of the Viet Nam Association of Mechanical Industry, said that a specific law differentiating between societies and associations needed to be built.

Son said the status of associations should not be the same, and that levels of support to their businesses should differ.

Associations are formed to support industries and businesses to grow, but to do that, there should be clear policy and regulations on capital, he stressed.

Bien suggested the State clarify the role and function of trade and support associations, aiming to promote the export of goods to foreign countries, strengthening the domestic market, developing mechanisms to exchange market information and business customer membership.