Vietnam - State’s role needs to be clarified

The Hanoitimes-  Vietnam needs to clearly define the role of the State in the market-driven economy as the country is deeply integrating itself into the global economy, said experts at a seminar in Hanoi this week.

The seminar o­n Vietnam’s position in the integration process after 5 years of Vietnam’s membership in the World Trade Organization (WTO) was co-organized by the Vietnam Chamber of Commerce and Industry (VCCI) and Multilateral Trade Assistance Project (MUTRAP) in Hanoi.

“We should not be attached to the old economic mechanism while developing a market economy,” economic expert Pham Chi Lan said. “The roles of the State and businesses in the economy must thus be clearly defined.”

But Lan admitted that this would be difficult because State-owned enterprises are holding a dominant role and governance by administrative orders is still popular.

“The catchphrase of all sectors is ‘thanks to the State’s support’. This means that the general perception of the society remain unchanged compared to the old time,” she said.

According to Vo Tri Thanh, deputy head of the Central Institute for Economic Management, there are still multiple issues relevant to the State’s responsibility in the integration process.

The quality of the system of laws and regulations is still low, he said, leading to different understandings and improper application.

There isn’t any significant improvement in legal enforcement compared to the past. “The State agencies still lack a sense of responsibility in legal enforcement,” Thanh said.

He said Vietnamese society had reached a higher level with widespread development of information technology and a rising middle class.

This requires policymakers to practice transparency.

“Society and investors demand transparency and predictability from issued policies. Therefore, policymakers need to communicate in a transparent manner,” he said.

Claudio Dordi, team leader of MUTRAP, gave specifics about the State’s role lagging behind economic development.

He said State management capability indicators had continuously dropped over time.

Citing data of the World Economic Forum, he said Vietnam’s legal framework efficiency had worsened, falling from the 57th position in 2009 to 74th last year.

The Government’s transparency has also plunged to No. 91 in 2011 from No. 58 in 2007.

Meanwhile, State regulation burden has moved down 8 places to No. 113 last year compared to No. 105 in 2007.

Dordi noticed that enterprises’ competitiveness had improved, while the Government’s regulation system is going downhill.

He cited Decree 46 that restricts employment of foreign laborers and automatic import licensing to reduce the trade deficit as a drawback.

Speaking at the seminar, Truong Dinh Tuyen, former leader of the WTO negotiation delegation, shared his hope that the management mechanism will improve to meet integration requirements.

VNS

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