The number of companies shutting up shop rose last year while fewer new ones were incorporated, reflecting the poor business environment and the government's failure to support business.According to a recent report by the Vietnam Chamber of Commerce and Industry (VCCI), the number of businesses that shut down or suspended operations increased by 6.29 percent last year to over 54,200.Most of them were in the finance, banking, and real estate.The number of newly established firms declined by 9.9 percent to 69,900. Their total registered capital was estimated at VND467.3 trillion (US$22.3 billion), also down 9.9 percent from 2011.Vietnam now has just 300,000 firms, compared to nearly 700,000 during the past decade.Most of firms operating in Vietnam now are mainly microenterprises, which have less than 10 employees, and small ones with 10-50 workers.In 2011 some 39 percent of medium-sized companies reduced their staff size and became small firms while 5 percent of small firms became microenterprises.The average number of staff in a Vietnamese firm decreased to 34 in 2011 from 74 in 2002.Pham Thi Thu Hang, general secretary of the VCCI, said Vietnam lacks medium-sized and large enterprises that take part in the global supply chains.Only 2.1 percent of firms are medium-sized, the report said.Ineffective measuresThe VCCI blamed the situation on the poor business environment and the government's ineffective support measures, which benefit only large firms.According to the Doing Business 2013 report by the World Bank, Vietnam ranks 99th out of 185 economies for ease of doing business.
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