BOX: Country strategy in the support of the SME sector

Milestones:
June 1998: the Government assigned the MPI with the task of defining a strategy for SME development and established the Prime Minister’s Research Commission on SME Policy (PMRC) headed by a Vice-Minister of MPI with official document No. 133/1999/QD-TTg dated 31 May 1999.
22 June 1999: approval of the Enterprise Law on (replacing the Company Law and the Law on Private Enterprise) which took effect as of 1 January 2000.
September 1999: Government’s Action Plan for PSD where MPI undertook the task to design the institutional framework (with support from UNIDO)
23 November 2001: Government Decree No. 90/2001/ND-CP on Support for Development of Small and Medium Enterprises
18 March 2002: Resolution No. 14-NQ/TW of the Party’s Central Executive Committee “Continuation of Renovating Policies and Mechanisms to Promote and Facilitate Private Sector Development”
21 May 2002: The Prime Minister approved the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) that calls for the “building of capacity for organizations at the central and local levels in charge of managing and supporting SMEs...and development of specific policies in creating a supportive environment..”
Mid 2002: the Government launched an action plan 2002-2005 to implement the Resolution of the 9th National Congress of the Party: the action plan for the encouragement and facilitation of the cooperatives (those under the Cooperatives Law) and private economic sectors (those under the Enterprise Law).

Government Decree No. 90/2001/ND-CP on Support for Development of Small and Medium Enterprises

The Decree defines SMEs as independent production and business establishments, which are registered according to the current law provisions, each with registered capital not exceeding VND 10 billion or annual labor not exceeding 300 people. Enterprises set up and operating under the Enterprise, the State Enterprise and Cooperatives Laws and business households registered under the Government Decree No. 02/2000/ND-CP of February 3, 2000 are considered as SMEs.

Decree No. 90 provides the framework within which the Government plans to support and encourage SMEs in Viet Nam; the main elements are:

Encouragement of investments by SMEs through financial measures, including the setting up of a credit guarantee fund for SMEs,
Setting up of industrial parks and production sites for SMEs,
Enabling SMEs to take part in government procurement programs,
Promotion of subcontracting, partnerships, and exports from SMEs,
Facilitation of business development services (information, consultancy, training, market access, technical ervices and trade promotion services, etc.) for SMEs to improve their competitiveness,
Encouragement provided towards the setting up of enterprise associations to represent and provide services for SMEs.

Decree No. 90 also provides the mandate for the establishment of the Department for SME Development (SMED) as a semi-autonomous General Department (Cuc) directly under the Minister of MPI and the SME Development Promotion Council (SMEDPC) as an advisory body to the Prime Minister of Viet Nam and three Technical Support Centers, under the SMED, in Hanoi, Danang and Ho Chi Minh City.