Clarifying role of state in economy

16:19 | 08/05/2016 Society

(VEN) - The Ministry of Planning and Investment and the World Bank hosted a workshop in Hanoi entitled, “Role of the State in a Market Economy: Institutional Reform Issues for 2016-2020”.

Clarifying role of state in economy

After being equitized, the Vietnam National Petroleum Group has achieved significant progress

Over the past three decades of renovation, Vietnam has failed to clarify the conception of socialist-oriented market economy as well as the role of the state and state-run enterprises. State investment has still accounted for around 40 percent of total social investment, which is regarded as much higher than other developing countries except China and Malaysia while about double the rates recorded in developed countries, said Dr. Nguyen Dinh Cung, Director of the Central Institute of Economic Management under the Ministry of Planning and Investment.

Although the public investment institution has been amended and the principle on public investment planning has been well defined in the 2014 Law on Public Investment, public investment in economic industries and sectors has decreased unremarkably while that in public services for human development has failed to increase substantially. The state budget dominates public funding.

According to the World Bank, Vietnam has achieved progresses in public investment restructuring and the equitization of state-owned enterprises. However, the state interference in the domestic economy which is regarded as still in depth will probably affect socialist-oriented market economic development and economic entities.

Vietnam is politically stable and attractive to foreign investors. However, the role of the state and the responsibilities of state leaders have not been clarified causing a major obstacle to Vietnam’s economic development. Enhanced discipline, transparency and accountability in the management of state budget and public debts while ensuring national financial security are necessary for Vietnam, said Sandeep Mahajan, the Lead Economist of the World Bank in Vietnam.

It is necessary to continue public investment restructuring and further promote the equitization of state-owned enterprises. The state should undertake what the private sector is unable to do including economic development sponsorship, social and national security and funding economic sectors to develop.  The state should also promote the equitization of state-owned enterprises in hospitality, transport and trade, while establishing agencies charged with managing state-owned enterprises. This would be a step towards improving the role of the state in the economy, said Nguyen Dinh Cung.

Director of the Central Institute of Economic Management (CIEM) under the Ministry of Planning and Investment Dr. Nguyen Dinh Cung said, “It is necessary to continue public investment restructuring and further promote the equitization of state-owned enterprises. The state should undertake what the private sector is unable to do.”

 

Nguyen Hoa


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