The conference “Policy Dialog on the market economy of Vietnam”

On July 29th, 2020, Vietnam National Economics University (NEU) coordinating with the Central Economic Committee, MASSEI, Fraser Institute, and Atlas Foundation co-organized the conference “Policy Dialog on the market economy of Vietnam”. The conference focused on theoretical and practical issues to promote the development of market economy of Vietnam with reference to the Economic Freedom of the World Index (EFW).

Views of the conference

The conference attracted many economists, policy experts, scientists from some institutes and universities in Hanoi, representatives from some companies, and many media organizations. Special guests included Prof. Dr. Nguyen Van Thao, Deputy chairman of The Central Theoretical Council of the Communist Party of Vietnam; Prof. Dr. Tran Tho Dat, President of University council of NEU, member of the Economic Advisory Group for the Prime Minister; Ms. Nguyen Thi Huong, General Director of the General Statistics Office of Vietnam.

Assoc. Prof. Dr. Bui Duc Tho delivered the Introduction and Opening remarks

At the beginning of the conference, the Vice rector of NEU, Assoc. Prof. Dr. Bui Duc Tho delivered Introduction and Opening remarks. According to him, the more an economy grows, the stronger the relationship between economic freedom and economic growth. This has clear implication for Vietnam, when it is to overcome the low middle income development threshold, that is Vietnam should use indexes on economic freedom to measure the development of market economy in Vietnam. Prof. Bui Duc Tho hoped that this conference will help us identify specific policy issues paving the way for more reforms in the coming years.

Next was the general discussion session. First, Assoc. Prof. To Trung Thanh – Head of the Research Management Department – NEU, presented his analysis of the development of the market economy of Vietnam from the view of the EFW index. He showed that Vietnam still needs to improve on many aspects of economic freedom, especially components related to Sound Money and Freedom to trade internationally. Some specific policy issues were drawn based on the analysis.

Assoc. Prof. To Trung Thanh presented the topic: “The development of market economy in Vietnam and some concerned issues: From the perspective of the Economic Freedom of the World Index of Fraser Institute, Canada”

In his presentation, Dr. Nguyen Dinh Cung – member of the Economic Advisory Group for the Prime Minister and Former President of Central Institute for Economic Management of Vietnam (CIEM) – emphasized the need to adopt new conceptualization of the socialist-oriented market economy of Vietnam. He argued that to create a breakthrough so that Vietnam can officially become a full modern market economy, there must be proper conceptualization of the functions of and relationship between state and market; clear distinction between the two processes: marketization and socialist orientation; and the reforms must be aimed at the right place, at the right moment, by the right people, with the right instruments. He also called for the use of measuring tools to monitor the development of the market economy, whereby the government can find policy solutions based on specific indices, rather than being limited at the mere theoretical level.

Dr. Nguyen Dinh Cung talked about “Reform the socialist-oriented market economy ideology in Vietnam”

Sharing about the world’s experience in economic freedom and countries’ ability to overcome the middle income trap, Dr. Fred McMahon – Fraser Institute – showed that throughout the history, global free trade, free economies, and economic freedom have brought immeasurable benefits to the humankind. People living in nations with high economic freedom always have much higher living standard and higher life satisfaction than those with low economic freedom. Particularly, citizens in nations with freest economies have higher life expectancy, GDP per capita over 36,000 USD, the percentage of population living in extreme poverty is very low (only 1.8%). Meanwhile, in nations with lowest economic freedom, 40.5% of population living in extreme poverty and over 27% is relatively poor and GDP per capita only stood at 6,100 USD. Dr. McMahon also noted that many countries used to have high growth rates in the past could not sustain their growth due to their failure to reform the economies in favor of economic freedom. Therefore, it is essential for Vietnam to reform its economy to promote economic freedom thereby overcoming the middle income trap.

Dr. Fred McMahon – The Fraser Institute, Canada presented the topic online, “Economic Freedom and the ability to overcome middle income trap of developing countries: Experiences in the world”

The above presentations stimulated many comments and discussions among the experts and scholars at the conference. Among those were the comments from Prof. Dr. Tran Tho Dat and economic expert Pham Chi Lan – Former General Secretary of Vietnam Chamber of Commerce and Industry. Prof. Tran Tho Dat believed that using a trustful index like EFW to assess economic freedom is a good opportunity for Vietnam to develop its market economy in accordance with international standards since the index can help Vietnam identify components of a market economy and have a clearer vision of reformation. In reviewing the development of market economy of Vietnam, Mrs. Pham Chi Lan stated that while there are many favorable treatments for state-owned enterprises and foreign owned companies, there is virtually none left for the private sector. In the private sector, there have been some big companies which emerged as important players in the economy, but they are crony firms, for otherwise, it would be hard for them to access to favorable resources and policies. Moreover, she suggested that the best way to assess the development of market economy of Vietnam is to look at both indices and empirical evidence.

Prof. Dr. Tran Tho Dat addressed the conference

Economic expert Pham Chi Lan addressed the conference

After the General Discussion session, there was two thematic sessions. The first one was about public sector, legal system and property rights. Dr. Nguyen Van Dang’s presentation focused on some institutional problems and the necessity to initiate reforms for modern market economy of Vietnam. On the other hand, Dr. Nguyen Tu Anh questioned the index’s applicability in reflecting the ultimate goals of economic development and suggested that economic development may also lead to higher economic freedom as well.

Meanwhile, at the venue for the second thematic session, the participants discussed on issues related to policies on improving business environment and international trade. Mrs. Nguyen Minh Thao – CIEM, presented topic “Improving business environment: Results, problems, and vision for further reforms”. According to her, the reform implemented between 2014 – 2019, mainly through the implementation of Resolution 19 and later Resolution 02 of the Government, has resulted in some positive developments, but there are still rooms for improvement. Requirements for business, management and specialized examination, and business environment are the aspects that need further improvement. She also emphasized the importance of improving quality of regulatory content, in stead of merely reducing administrative procedures.

Mrs. Nguyen Minh Thao, Head of the Department of Business Environment and Competitiveness Studies. Source: baodautu.vn

With regard to international trade issues, Mr. Le Sy Giang, an expert in international trade laws, the director of GH Consults L.L., presented the topic “Trade freedom index and the openness of the economy”. He argued that Vietnam’s economy nowadays is already highly integrated so, instead of being more open to international trade, Vietnam should promote its internal economic freedom; tariff schemes should be reassessed for each category of goods so that domestic producers’ and consumers’ interests are better protected; non-tariff barriers of Vietnam should be reviewed as well so that they are not too broad.

Mr. Le Sy Giang, Director of GH Consults LL. Source: doanhnhansaigon.vn

In the afternoon session, a group of experts, chaired by Mr. Dinh Tuan Minh, had a meeting to summarize the results of the morning sessions and propose some research agenda as well as policy advocacy, taking advantage of the EFW index, to propose policies for promoting the development of market economy of Vietnam in the coming time.

 

 

 

The conference “Policy Dialog on the market economy of Vietnam”

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