The relationship between “market” and “orientation” The socialist-oriented market economy model was officially introduced at the 9th Congress, but until now there has been no summary to see which side we are leaning towards, the market economy or the socialist orientation. In your opinion, which side are we leaning towards? Dr. Tran Dinh Thien - Former Director of the Vietnam Economic Institute : I think that overall, the development is biased, a bit heavy on the “orientation” side, the “market” side is somewhat “restrained”, not properly developed. But because of the bias, both sides have not developed “to the right level” and not “at the right level”. We chose the market economy as a method to solve the development deadlock, to save the economy following the centralized planning mechanism which was in a serious crisis at that time. In principle, “development” is the consistent goal (orientation axis) of Socialism. We choose the Market Economy to solve the main development problem at the most difficult moment, which further affirms the value of the Market Economy as the central content of the Socialist orientation.

Dr. Tran Dinh Thien: If the market is hindered from developing, the consequence will be that the economy will find it difficult to escape the risk of falling behind. Photo: Hoang Ha

In essence, the application of the market economy helps solve the central problem of the socialist path that Vietnam has chosen. In that sense, the more the market economy is promoted to develop strongly and healthily, the more basis there is to realize socialist goals. That logic of relationship is absolutely not a forced deduction, or as people often say "trying to cut the foot to fit the shoe". It has been proven by the practice of innovation and development in Vietnam over the past decades. It can be seen that over the past decades, the Vietnamese private economic sector, although small and weak, has been a force that has helped the economy maintain a socialist orientation in a substantial way. For the simple reason, this is the sector that creates the most jobs and income for workers. Creating jobs and income for workers is one of the basic goals of socialism. Let me describe it with numbers: The private economic sector accounts for 50% of GDP, 35% of total budget revenue and creates jobs for 50-60% of the total workforce in our country. So can the state-owned or FDI enterprises do the same?! That said, if the market is hindered from developing, the consequence will be that the economy will find it difficult to escape the risk of falling behind and to achieve the goals of socialism. Only by opening up and following the market economy will Vietnam have the opportunity and conditions to integrate into the world economy. But if we do not integrate with the world, who can we play with and how will we develop?! Internally, we follow the market; and the most important thing of the market economy is the price mechanism, supply - demand, and competition. At the beginning of the Renovation, the State gradually eliminated the ration card system, in essence, the State abandoned the pricing mechanism that was subjectively and imposed by the State, to transfer the price-determining function to the market. Supply - demand and market competition will determine prices. The price of kerosene, the price of food - the price of the most vital goods, also the most scarce - was transferred to the market mechanism. Thanks to that, the scarce and deficient economy revived, with unexpectedly strong vitality. The economy flourished, the country gradually escaped poverty firmly. But the subsequent process was not always consistent with that logic. In the economy, the phenomenon of using the name of "maintaining the Socialist orientation" to maintain discrimination, to maintain the request-grant mechanism and the cumbersome administrative process system, and the tendency to criminalize economic-civil relations... distorts the competitive environment, causing many bottlenecks and binding the economy, especially for market entities of "Vietnamese nationality", is not uncommon. With such a view, we must now approach to fundamentally and properly resolve the relationship between the two sides of "market" and "orientation", in which the key point is the pricing mechanism of important resources. Land prices and electricity prices are among them, which are bottlenecks causing conflicts and many serious consequences, and are major issues of the present time. At the same time, it is necessary to ensure that maintaining the Socialist orientation does not hinder or bind the process of marketization and modernization of the economy. The historical lessons of innovation - thoroughly reforming the market, believing in the motivation and strength of the Vietnamese business sector, especially the business force, still have value in providing approaches, principles of action and the bold spirit of innovation of decades ago. Whether land prices follow the market or are still heavily speculative, whether the land pricing mechanism is based on market principles - with the true land property rights of economic entities guaranteed, with the support of powerful tools such as land rents and land taxes that the state knows how to use intelligently... are issues whose radical solutions have only just been opened. Vietnam has developed "to the ceiling" Sir, cases like SCB, Van Thinh Phat and many large enterprises that have to go to court are making people worried, private enterprises are also a problem...? "In a gourd, it is round, in a tube, it is long" or "What institution, that enterprise". Why do enterprises commit such violations? I think the fundamental problem - I must emphasize that "fundamental" lies in the institution.

The historical lessons of innovation - thoroughly reforming the market, believing in the motivation and strength of the Vietnamese business sector - still hold true. Photo: Hoang Ha

We need to continue reforming, abandoning the practice of asking for and granting, and allocating resources according to the market; limiting the licenses of “children”, “grandchildren”, and “great-grandchildren” that are often exploited and colluded with. In addition, we need mechanisms to ensure publicity, transparency and accountability... The core issue is to deal with the system mechanism. Only by abandoning the system of allocating scarce resources through the “asking - giving” and “allocation” method can we gradually break away from the situation of making things difficult and annoying for businesses and society to “make a living”, and only then can we hope to fundamentally eradicate the problem of corruption and bribery. That is the core of the problem. Therefore, I think the recent statements of the Prime Minister and the General Secretary requesting to limit the criminalization of civil issues and cases, avoid damaging the market economy, increase decentralization, empower all levels of subjects, and strengthen the individual responsibility regime are opening up very bright prospects for the development of a future socialist-oriented market economy. Many people say that Vietnam has reached its "ceiling" in development. Do you agree with this view? Vietnam still has a lot of room for development. As mentioned, the resource markets or the markets of production factors are being "tied up", if they can be opened up, the economy will explode. The space for innovation also needs a new approach, which will help promote the potential capacity of Vietnamese intelligence. The same goes for the national governance system and enterprises, if modernized early, it will create an extremely strong driving force for development. According to the standards of the civilized and progressive world, we will resonate with the strength of the world. Many of us still have the traditional farmer mindset. They look at development not in terms of global competition or competition, but with a long-term vision, looking towards the future. I still say that Vietnam seems to mainly keep a short-term, downward-looking attitude when competing with the world for development. We still have a heavy tradition of "looking down at the fields" and have not yet seen the true meaning of market resources - the era, on the basis of changing thinking. We have not completely transcended the traditional land mindset to reach the development mindset of the ocean and digital space - the universe. That is the space - resource - main driving force of modern development. The immense resources for development are wind, sun, ocean and the digital world, not limited to each fragmented and conflict-filled field.

The economy is preparing for a new stage of development. Photo: Hoang Ha

And fortunately, Vietnam has recognized and joined the race in that spirit. The Government's approach to the semiconductor industry, to green development, and most recently, the General Secretary's message about the country's future associated with digital transformation, are opening up for the country the prospect of a desirable turnaround. Opportunity for change After the Covid pandemic and the stagnation in the public sector for the past 5 years, do you find the current reality of the people and businesses very compelling? Currently, the domestic sector of Vietnam is facing great difficulties, so difficult that it cannot be ignored, overlooked, or indifferent. The business health charts all show that. But that also means that hope is being compressed. The economy is preparing for a new stage of development. The new dynamics of the economy, the tireless efforts of the Government in developing modern connecting infrastructure, strengthening institutional reform , not simply adjusting and removing the bottlenecks of mechanisms and policies left by the past but also aiming to build an institutional system for a new economy... are sowing confidence in the recovery and rise of the economy. General Secretary and President To Lam requested that there needs to be a unified understanding of the new context that is opening a new era, an era of rising up of the Vietnamese people. Do you agree with this point of view? General Secretary and President To Lam raised the issue very correctly and accurately: this is an opportunity for change, an opportunity to switch to a new way of development. Development thinking and development vision need to be changed. The implication here is probably: what is available, even if correct, will still not be enough, and will not guarantee the country's future in the world - the new era. We have achieved many good results but they are not enough to solve current problems, let alone the demands of the volatile future. Therefore, the innovation process needs to be implemented more thoroughly, according to the commitments in FTAs ​​and international standards, according to the requirements set by the digital economy and the green economy as vital orders. That is also the key to solving the relationship between "productive forces - production relations" that modern demands.

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