No.13   September 1, 2000   Developing Small and Medium-Scale Enterprises in Vietnam   Hitoshi SAKAI and Nobuaki TAKADA        At the request of the Vietnamese government, NRI last year devised a set of policy proposals to foster the development of small and medium-scale enterprises. The methodology we adopted was twofold: a deductive approach applying foreign experience to Vietnam's current stage of development was combined with an inductive approach based on an empirical study of Vietnamese industry and business. As part of the study, we carried out interviews at more than 300 companies in seven different industries (e.g., garments, electrical and electronic goods, and machinery and components). The topics included the challenges facing the private sector in Vietnam and the need for more administrative support. Using this information, we devised proposals for each industry, which in turn served as a basis for more general proposals for small and medium-scale enterprises as a whole. These proposals range from enacting an SME Basic Law and establishing a system for fostering the development of SMEs by means of a Small and Medium-Scale Enterprises Promotion Agency at its center to establishing a system for financing such enterprises, establishing industrial estates especially for such companies, setting up a system to help SMEs export, and providing training support. Hopefully, these proposals will serve as a basis for more detailed measures by the Vietnamese government and contribute to the development of the country's small and medium-scale enterprises. Contents I Background to the Study II Need for Policies to Foster the Development of SMEs in Vietnam and the Basic Approach to Be Adopted 1 Ninety-Seven Percent of Non-State-Owned Companies Are SMEs 2 Four Criteria 3 Four Projected Stages of Development 4 Four-Part Framework III Details of Proposals for Fostering the Development of SMEs 1 Need for Legal Framework--Especially a Basic Law for SMEs 2 Need for Coordination Among Government Entities Involved with SMEs 3 Improving Access to Finance 4 Finding Premises 5 Improving Export Promotion Policies 6 Fostering the Development of Technology and Supporting Industries 7 Training IV Proposals for Fostering the Development of SMEs Involved in the Garment Industry 1 The Domination of the State Sector 2 Dependence on CMP business 3 Need for a More Level Playing Field and More Competitive Exports 4 Policy Proposals for Fostering the Development of SMEs V Policy Proposals for Fostering the Development of SMEs in the Electrical and Electronics Industries 1 Electrical and Electronics Industries as Well as Their Supporting Industries Lack Know-How and Staff 2 Need to Foster the Development of Three Different Types of SMEs 3 Appropriate Policies for the Three Types of SMEs VI Policy Proposals for Fostering the Development of SMEs in the Machinery and Component Industries 1 Three Different Types of Small and Medium-Scale Enterprises 2 Six Different Future Types of SMEs and the Policies to Foster Their Development VII Response of the Vietnamese Government GO to PDF