The Central Institute of Economic Management (CIEM) has been assigned by the government to draft a Comprehensive Competition Management Policy. The draft is expected to be completed in 2017.
Dr Nguyen Dinh Cung, CIEM Chairman, said that the decision taken at this point is most appropriate to narrow the gap between Vietnam and other countries in the region. Vietnam must ensure the growth rate of 7-7.5 per cent. However, according to the estimate of the Institute, Vietnamese growth rate is decreasing together with unstable macro economy that continues permanently.
Reform at stake
Dr Cung said that in the past 3 years the Vietnamese economy attained high growth rates. However considering the past 10 years, it is decreasing with 7.8 per cent in 1990-2007 to 6.7 per cent in 2007-2912 and now 5.8 per cent.
For his part, Dr Luu Bich Ho, former head of the Development Strategy Institute, said that the present market is being deformed without land and resources market. The resources are partitioned by administrative units and dominated by interest groups. The market integration is blocked by regulations on size, for example, a bus company must own at least 20 buses.
Dr Cung said: “State-owned enterprises (SMEs) are deformed with unfair competition, buying higher prices and selling lower prices, contrary to general norms. Such a market produces wrong market signals negating the efficiency of resources. The policy is manipulated by various interest groups. Vietnam cannot continue its policy on demand (expanding monetary policy, fiscal budget, State investment, etc), causing again the danger of macro-economic instability.” There must be better solution such as increasing labour productivity, resource efficiency to ensure stable economic growth. Both theory and practice show that only better market operation can create new strength for economic growth, promoting distribution and use of resources. It is also the market that develops innovations and makes the best use of personal and social resources.
According to experts, after 30 years of economic reform, the reform has reached the ceiling. The country must have a new ceiling to continue its growth. Competition policy is truly the core of the second economic reform that the government is embarking. It is regarded as “platform for new reform,” Mr Cung said.
Against monopoly, developing competition policy
According to the analysis of the World Economic Forum (WEF), Vietnam ranks 71st among 140 economies in local market competition, 77th in anti-monopoly efficiency, and 64th in distribution market of economic groups.
In similar conditions, the Australian government has conducted the first review of competition policy and is implementing the second review on 1,800 programmes in 5 years with all legal documents. According to Ms Lanchlan Rosalie, Australian Productivity Commission, 85 per cent of legal documents have been reformed and 2 core principles are promoting competition between SOEs and private businesses and anti-monopoly (lifting limits on competition). It is necessary to split monopoly, public function and State commerce, to restrict monopoly in price fixing and to eliminate privileges of SOEs.
According to Ms Lanchlan Rosalie, Vietnam should develop and apply neutral principles in competition, including taxes (without privileges for SOEs), debts (same costs as other businesses without privileges for SOEs), and management (equal treatment between SOEs and private businesses). Privileges by State budget should be applied to all businesses.
According to Dr Nguyen Dinh Cung, in 2017 CIEM must submit to the government the draft Comprehensive Competition Policy.
Nguyen Thanh
Vietnamese
