Taking advantage of being a runner-up and located in a young, dynamic economic region known as a destination of the world’s trade and investment, Vietnam managed to hold up its economy to be less gloomy than the world’s economy.
The highlights of Vietnam’s economy in 2012 are: Low growth, just 5.03 percent but a gradual growth from quarter to quarter; 6.81 percent of inflation after years of double digit inflation; over US$9 billion of surplus of overall payment balance thanks to 18.2 percent of total export turnover, and overall total import turnover growth of 6.8 percent compared to that in the same period in 2011, for a trade surplus of US$300 million, after 19 years of deficits.
The quality of these successes remains poor, with a lack of transparency and instability in even these highlights. In fact, at the end of 2012, Vietnam’s economy is stuck with the large three bottlenecks going into 2013: growth in total demand, increase in unemployment, and dangerous bad debts in banks.
The three bottlenecks also relate to the inappropriate structure of the economy: High power of State owned enterprises in using resources, inefficient society’s capital, high bad debts; FDI sector only focuses on craft industry and/or high profit areas with low employment and instability; private sectors remains weak in competition, incapable of creating more jobs and increasing salaries, which are already low. These weaknesses not only reflect the clear disadvantages, but also suggest a pressure, a challenge to implement reforms - the urgent reforms include restructuring the public investment sector, the banking sector, the state owned sector, as well as the whole economy.
Apart from urgent and short - term reforms for the three bottlenecks mentioned above, the State must clearly identify the terms of the Stated owned capital ownership and businesses rights. Relating to that, the State should sell some or all of its ownership, or allow other sectors to lease these resources according to enterprise field, helping the State recover part of its capital and use it in some identified fields for social securities, such as: health, national security and defence, education, science with academic research, science with strong application, and developing human resources for the country.
Most of State capital and society’s capital (managed by the Government) will be invested to regain profits and reduce burdens for the society. As for all natural resources, national advantages and national brands that belong to the society, the Government will have to require rents to restructure revenues of the state budget. The vagueness between rents and natural taxes for exploiting natural resources must be cleared in order to reject the taxes or rent arrogation from the legal owner - the society.
A real revolution of ownership of capital, assets and resources must accompany the legal system restructuring in the direction of true State jurisdiction: the Government should only be a legal creator, the administrative system and judicial system must be appropriate and professional. The market mechanism must be the function of the economy. Government policies should only direct and influence aggregate demand and supply to guide the market. It is necessary to reduce administrative requirements that have distorted measures driving the market - oriented economy, such as: prices, interest rates, exchange rates, brands, and fair competition conditions. The very market and transparency of the State jurisdiction will purify corruption, weaknesses and continuously select intelligent managers suitable with the interests of the country, the Government, workers and people.
Strategic issues lie in the structure of institutions, mechanisms and institutional transparency. Only when the comprehensive restructure of the economy is legalised to collect essences of the socio - economic background, to serve the society and market, will current and future bottlenecks be solved.
Dr Nguyen Dai Lai
Vietnamese
