Title: State policy on small and medium enterprises (SMEs): a case study of morally sensitive enterprises in District 1, Ho Chi Minh City
Author: Xuan Minh Le
Year: 2007
Keywords: N/A
Theme: Post-development
Advisor(s): Preecha Kuwinpant
The full thesis available here.
Abstract: Vietnam's economic transition to a market economy and its integration into the global economy has significantly impacted private sector participation in the country, as evidenced by a 95% increase in the number of small and medium-sized enterprises (SMEs). A major challenge for SMEs, particularly those deemed "morally sensitive," is the obstacle they face in obtaining business licenses in Ho Chi Minh City. This research aims to study the factors affecting the application for business licenses for "morally sensitive" SMEs within the context of the market economy transition and WTO regulations. The study found that, in practice, the process of registering such businesses is complex, lacks transparency, and is illogical. Furthermore, it revealed that government officials held views and ideologies opposed to registration, contradicting the study's hypothesis. Based on these findings, it can be concluded that the policy failed due to several reasons: 1) Bias among conservative government officials who opposed "morally sensitive" businesses; 2) Misinterpretation of the policy by lower-level officials; 3) Lack of public understanding of business registration regulations; and 4) Prejudiced views of the public and media towards private businesses. Overall, it can be said that, in the context of the transition to a market economy and integration into the global economy, the failure of this policy stems from the conflict between the principles of a market economy and the ethical principles of society. Finally, the authors suggest that researchers studying the implementation of this policy in Vietnam should place greater emphasis on the roles and responsibilities of lower-level government officials. Thanks to the transformation to market economy and international integration of Vietnam, the role of private sector takes a vital part in the economy, in which SMEs take over 95% of the total number. However, despite their significant contribution, SMEs working in “sensitive” services still have faced many obstacles when obtaining the business registration certificate in Ho Chi Minh City. The purpose of the research is to study the factors influence issuance of business registration certificate for “sensitive” SMEs in the context of Vietnam's transformation to market economy and WTO penetration. Findings from the study prove that issuance of business registration certificate for sensitive enterprise is complicated, non-transparent, and unreasonable. Especially, contrary to the hypothesis, the study finds various opposite viewpoints of officials due to their ideology. Based on the findings, it can be concluded that this policy failed due to some reasons: (i) bias of conservative officials against “sensitive” businesses; (ii) inadequate interpretation of the policy by street-level bureaucrats; (iii) poor knowledge of the public about regulations on the business registration; (iv) traditional prejudice of the public perception as well as mass media towards private sector. Overall, in the context of economic transition and global integration, two conflict principles market economy versus social morality also contribute to the policy failure. Last but not least, in order to close this research, the author recommended prospective researches researchers pay much more attention to actions and the role of street-level bureaucrats when studying policy implementation in Vietnam.