Vietnam's business climate has witnessed significant changes over the past year, according to Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry.

Loc was speaking at the 2017 year-end session of the Vietnam Business Forum (VBF) in Hanoi on Tuesday.

“The private sector has also received more attention from the government than ever before, but it is still not enough,” Loc added. “Private enterprises make up nearly half of gross domestic product, but nearly 60 percent of them are unable to make a profit.”

“Private enterprises still need more support from the government to help them to cash in on opportunities during the country’s international integration process,” he said.

He believed that in the future the private sector will become the backbone of the economy.

Vu Tien Loc, chairman of the VCCI. Photo by VnExpress

Administrative procedures are still a big obstacle to business performance. The Vietnam Provincial Competitiveness Index pointed out that in 2016, 35 percent of surveyed companies spent at least 10 percent of their time on administrative procedures, which one in four of them said was the biggest problem facing their operations.

Hirohide Sagara, co-chairman of the VBF Consortium's management board, acknowledged the economic progress Vietnam has achieved since joining the WTO in terms of foreign investment, living standards and building a market economy.

At the same time, he said concerns remain related to transparency, efficiency and labor productivity, adding that the VBF's year-end session aims to tackle these concerns to promote growth in the private sector.

The VBF, which was established in 1997, is a channel of policy dialogue between senior leaders of the Vietnamese government and the business community, covering almost all economic fields in order to develop a favorable business climate, mobilize private sector investment, and spur sustainable economic development in Vietnam.