Authors: n n n n
Tran Huu Huynh Dau Anh Tuan Pham Chi Lan Nguyen Dinh Cung
CAMS
Changing Attitudes towards the Market, and the State of the Vietnamese People Survey
SOE
State-owned Enterprise
FDI
Foreign Direct Investment
Ltd
Limited (company)
VCCI
Vietnam Chamber of Commerce and Industry
PC
People’s Committee
WB
World Bank
WTO
Word Trade Organization
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Executive Summary In the last 25 years, Vietnam has state-directed transition from centrally-planned economy to a multi-sector market economy. Changing Attitudes towards the Market, and the State (CAMS) 2011 aims to study the evolving perception of the Vietnamese people on the role of the State and the market in the country today.
ship, price controls, and transparency in planning and implementation of the State policies. On the other hand, respondents working in media, embassies and development organizations, and civil society organizations, are among those who seem less satisfied with the current situation and changes.
e results of CAMS 2011 show that the majority of respondents prefer market economy and private ownership of enterprises. ey also consider that transparency is necessary in the planning and implementation of the State policies. However, a significant share of the people surveyed also favor state intervention in the market to stabilize prices of common items.
e group of respondents from civil society organizations appears to be less impressed by the changes in the economy and the transition to the market economy. ey would also like to see more changes in the future. ere are differences in satisfaction levels and expectations among those who have advanced degrees and those with lower level of education. ere is, however, no significant difference in responses along gender lines.
e survey suggests that the people who are most satisfied with the status quo are those who work for provincial government or city administration, the Communist Party’s Central Committee Office, the National Assembly Office, national government, private domestic enterprises, and enterprises benefitting from foreign direct investment (FDI). In particular, the changes they favor include the transition to the market economy, diversification of enterprise owner-
e results of the CAMS 2011 show that there is a high level of consensus among those surveyed on the requirements and measures of reform of the state-owned enterprise (SOE) sector, and on the need for improved transparency planning and policy implementation. ere is also a generally optimistic view about Vietnam’s long term growth outlook and potential.
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Introduction e reform process in Vietnam over the last 25 years can be viewed as the transition from a State-directed, centrally-planned economy to a multi-sector, market economy that has been labeled as the “socialistoriented market economy ".
member of many international organizations and entering into a wide range of bilateral and multilateral agreements. Recently, the State has signaled the beginning of a range of new economic reforms – such as transforming and partly privatizing SOEs – that emphasize the principles of the market economy, including equality between economic sectors, the adoption of market prices, and reframing the role of the State as that of a facilitator instead of a controller. However, the signals given are sometimes inconsistent. Bridging the gap from thought to practice at different levels has been particularly difficult during the draing of recent laws addressing price management and land ownership.
Recent discussions in the National Assembly and reports in the mass media reveal a struggle to clearly delineate the roles of the State and the market in Vietnam. How much should the State intervene in a market economy be? What is the optimal size of the SOE sector, and which areas of business should SOEs focus on? How to meet the requirements for transparency when operating in a market economy? ese are just a few of the important questions that remain to be answered by both the State and the people.
How do Vietnamese people perceive – and what are their attitudes towards – the role of the State and the market in the process of transition to a market economy? How do people from different sectors, including government agencies (from policy makers to the policy implementers at local level), enterprises, civil society organizations and foreigners who work for development organizations in Vietnam, regard this issue? For the purpose of answering these questions, VCCI – in collaboration with the
e proliferation of the private businesses in the last 10 years across several industries and activities makes it impossible for the State to apply the former management and control of the past. e number of private enterprises has leapt from around 30,000 before the year 2000 to nearly 600,000 enterprises by the end of 2011. In addition, Vietnam has become deeply integrated into the international economy, becoming a
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World Bank – launched a survey under the framework of the Vietnam Development Report 2012 in late 2011. Irish Aid, and the Embassy of Ireland in Vietnam, supported the data processing, writing, and publishing.
support from Ms. Mags Gaynor, Deputy Head of Development, Ms. Pham i Hanh Nguyen, assistant to the Irish Aid, Ms. Nguyen i Huong, bilateral relation advisor and Ms. Truong i Minh, financial and audit advisor, this research would not have come into reality.
is report has been jointly prepared by Mr. Tran Huu Huynh, Mr. Dau Anh Tuan, Legal Department of the VCCI, Md. Pham Chi Lan, senior economist, and Dr. Nguyen Dinh Cung, Deputy Director of the Central Institute for Economic Management (CIEM), with the support and assistance of Ms. Le anh Ha, Ms. Bui Linh Chi and Ms. Nguyen Le Ha at the Legal Department of VCCI.
We highly appreciate comments and feedbacks received Dr. Le Dang Doanh, economic expert; Dr. Nguyen Quang A, economic expert; Mr. Le Duy Binh, managing director of Economica Vietnam; Mr. Pham Ngoc ach, Vietnam Academy of Social Sciences; Ms. Nguyen Ngoc Lan, Vietnam Competitiveness Initiative project. ey have made great contribution to the initial dras of the report.
We gratefully acknowledge the support from Mr. Deepak Mishra, Chief Economist, and Mr. Doan Hong Quang, Senior Economist of the World Bank in Vietnam during the process of designing, surveying and preparing of this report. Without the
e assessments and feedbacks presented in the report is under the ownership of the research team, and does not necessarily reflect the view of VCCI, WB, Irish Aid, or mentioned above individuals.
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Content 1.
CAMS 2011 METHODOLOGY 1.1 Survey Methodology 1.2 Respondents to CAMS 2011
11 12 14
2. TRANSITION TO MARKET ECONOMY
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3. DETERMINATION OF PRICES
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4.
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STATE-OWNED ENTERPRISE REFORM
5. IMPROVEMENT OF TRANSPARENCY AND ACCESS TO INFORMATION 47 6. OPINIONS ON VIETNAM’S ECONOMIC SITUATION
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List of Tables Table 1.
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Forms of answers under CAMS 2011
List of Figure Figure 1. Figure 2.
Age Groups of Respondents to CAMS 2011
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Classification of Respondents to CAMS 2011 by Profession
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Figure 3.
Level of Education of Respondents to CAMS 2011
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Figure 4.
Market economy is prefered model as assumed by profession groupings under CAMS 2011(%)
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Figure 5.
Views on prefered economic model by education level under CAMS 2011 (%)
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Figure 6.
Views on prefered economic model by positions and age group (%)
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Figure 7.
Percentage of respondents who agreed or totally agreed with the statement “Vietnam’s economy
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is now a market economy” Figure 8.
Percentage of respondents that agreed or strongly agreed with the statement
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Figure 9.
Evaluation on the pace of transition to the market economy in Vietnam during the period from
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2006 - 2011 (%)
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Figure 10. Determinants of prices on household consumer items, percentage of respondents
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Figure 11. State vs. market in setting the prices of essential household consumer items, classified by profes-
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sion groups (%) Figure 12. Evaluation of the role of the State and the market in price determination (%)
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Figure 13. Evaluation of the level of increase in number of the State regulations addressing price stabilization by profession groups (%)
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Figure14. Evaluation of the performance of price stabilization programs (%)
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Figure15. Evaluation of the performance of price stabilization schemes by level of education
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Figure 16. What kind of ownership is the more preferable? (% of respondents) Figure 17. Evaluation of ownership of enterprises by profession group (percentage of total)
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Figure 18. Evaluation of ownership by education level (percentage of consensus) Figure19. Response to “State ownership remains the dominant form of ownership in Vietnam’s enterprise
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sector” by profession grouping (%). Figure 20. Opinion regarding the speed of transformation from State ownership to private ownership in
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2006-2011( %) Figure 21. Evaluation of speed of transformation from State ownership to private ownership in the last five years in Vietnam (%)
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Figure 22. Evaluation of the contribution of large state-owned enterprises to the national economy (%) Figure 23. Evaluation of the general contribution of large SOEs to the Vietnamese economy divided by
41 42
sector (%) Figure 24. Evaluation of the level of compliance with laws and regulations across types of enterprises
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(percentage) Figure 25. Evaluation of SOE reform solutions for Vietnam (%)
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Figure 26. Evaluation of the role of transparency in planning and implementing State policies (%)
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Figure 27. Attitudes toward the role of transparency in planning and implementing State policies, broken
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down by profession groupings (%). Figure 28a.The proportion of respondents supporting the viewpoint: “The state’s decision and policymaking
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process is highly transparent in Vietnam” Figure 28b. The proportion of respondents supporting the viewpoint: “The state’s decision and policymaking
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process remain highly secretive in Vietnam” Figure 29. Evaluation on the level transparency in the policy making and implementing process over the past 5 years Figure 30. Percentage of people supporting the viewpoint: “The economic situation in Vietnam is better
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today than around 5 years ago” Figure 31. Percentage of those agreeing with the statement “On the whole, I am satisfied with the present state of the economy”
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Figure 32. Responses to the assertion that “Children who are born now will have a better life than my gen-
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eration”
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Cams 2011 methodology The World Bank conducted this survey – in collaboration with the VCCI – from August to October 2011. The survey aims to establish the changes in perception that Vietnam’s residents are experiencing in terms of the role of the State and the market. The survey was conducted with the participation of individuals across different fields and sectors of society. SURVEY METHODOLOGY e people surveyed live in Vietnam and work in different organizations and agencies, including the Party’s Central Committee Office, the National Assembly offices, national and local governments, domestic enterprises, foreign firms, media, organizations of civil society, and development organizations operating in Vietnam.
terprises nationwide, including privatelyowned domestic enterprises (comprising joint stock companies, limited liability companies, and private companies), foreign-invested enterprises and SOEs (companies in which the State owns over 50% of the charter capital). ose companies operate in many different industries in many provinces and cities of Vietnam.
e survey was conducted using a random sampling method. In order to form the sample list, VCCI prepared a list of different groups of surveyed people and then selected randomly a subset from each group to send the questionnaires.
e list of enterprises was built upon a database available to VCCI from tax agencies. VCCI selected a sample of 1,000 enterprises nationwide, including privately-owned domestic enterprises (comprising joint stock companies, limited liability companies, and private companies), foreign-invested enterprises and SOEs (companies in which the State owns over 50% of the charter capital). ese
e list of enterprises was built upon a database available to VCCI from tax agencies. VCCI selected a sample of 1,000 en-
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e survey was conducted by sending official sets of questionnaires in the form of official dispatches by VCCI to participants, including through e-mail where possible. A separate website in both Vietnamese and English1 was designed to make it convenient for the survey respondents to answer the questionnaires. Participants in the survey were informed through questionnaires and e-mails that they had many choices in how to respond to the survey: either by sending response to VCCI using stamped envelopes, by fax or e-mail, or by answering online through the website.
companies operate in many different industries in many provinces and cities of Vietnam. For the purpose of obtaining the survey list of local government agencies, VCCI used data of participants from around 100 recent seminars it hosted on diagnostics of the provincial competitiveness index (PCI) in over 50 provinces. is list also includes many people representing various positions, from the Party provincial secretary, Chairperson of the People’s Committee, and leaders and staff of local departments, to officials at district level. Once again, VCCI randomly selected a sample of 250 people out from the list to be surveyed.
A group of collaborators was available to assist VCCI in calling respondents and support respondents if they had any questions.
The World Bank and VCCI selected 100 journalists from available sources to receive the questionnaires. In addition, VCCI also sent questionnaires to Vietnamese people and foreigners working in non-governmental organizations, international donor groups, and organizations operating in Vietnam under a sample culled from the Bank and VCCI’s data.
CAMS 2011 received 1,023 responses by the end of November 2011. Nearly 47% of the respondents sent their feedback to the questionnaires in hard copy via post or fax. More than 34% of respondents sent their answers via e-mail and nearly 19% answered questionnaires online.
Table 1: Forms of answers under CAMS 2011
1.Website – Vietnamese version is at www.khaosat.com.vn, English version is at: www.surveyonline.com.vn
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RESPONDENTS TO CAMS 2011
Figure 1. Age Groups of Respondents to CAMS 2011
More than 65% of the respondents are male and nearly 35% are female. The average age of survey respondents is 38.4 years. Among all respondents, 30% are under the age of 30, 27% are over 49 years of age, and the remaining 43% are among the most common age group of respondents, ranging from 30-to-49 years old. As originally designed, the CAMS 2011 participants were drawn from many different organizations and agencies. However, as regards to profession, the number of people working for the Party’s Central Committee and government agencies (at both central and local levels) accounted for approximately 39% or respondents. Of this group, 13% worked for ministries and central agencies, 19% for People’s Committees and local government agencies, 4% were members of the National Assembly or working for the Office of the National Assembly, and 3% worked for the Party’s Central Committee agencies. Nearly 41% of the survey respondents were from different enterprises, of which almost 30% were from privately-owned domestic enterprises.
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Figure 2. Classification of Respondents to CAMS 2011 by Profession
39%
41%
of respondents from state sector and
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from corporate sector
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In terms of education level, almost 90% of participants of CAMS 2011 had undergraduate or postgraduate degrees, while the remainder had high school degrees. î ˘ese figures do not reflect the structure of education of the Vietnamese population in general, especially the populations in agricultural sector and non-formal businesses. On the other hand, they are relatively consistent with the structure of the Vietnamese population who work in the corporate sector, public sector, and other organizations.
Figure 3. Level of Education of Respondents to CAMS 2011
Almost all of the respondents (nearly 97%) were Vietnamese and the rest foreigners living in Vietnam. Most of these foreigners are working in foreign embassies in Vietnam, in bilateral or multilateral development organizations, or in foreign enterprises.
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Transition to Market Economy An important question under CAMS 2011 sought to determine the respondents’ view about a preferred economic model2. The results of the survey did not come as a surprise. Of the survey participants, nearly 87% believed that the market economy is better than any other economic model. In contrast, only 7% preferred the State-led model to the market economy, and more than 6% regarded the economic model as unimportant.
2. In obtaining consistent feedback regarding the concepts of State-led economy and market economy, definitions were included in the questionnaires. A State-led economy was defined as one in which the State – through central planning – allocates resources for different activities. State capital is the dominant form of ownership and prices are under State control or are heavily regulated. A market economy was defined as one in which resources are allocated by market forces, with the State’s primary role limited to facilitator and regulator. Prices are determined by the level of demand and supply in the market.
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In terms of profession, all groups expressed strong support for the market economy model. ose from the media showed the strongest support for the market economy model (with 97% preferring this option), followed by those from government offices, ministries, departments and People's Committees, and provincial departments (92%). e group of SOEs and of the Party’s Central Committee agencies returned the same percentage (86%-87%). Of those who worked at the
National Assembly offices, 75% said preferred the market economy model – the lowest percentage among all professional groups. A more surprising result is that 83% of respondents working in the private sector in Vietnam (including domestic private companies and foreign private companies) viewed the market economy as preferable, which is lower than average and below the level of preference expressed by those in the State economic sector. Figure 4: Market economy is prefered model as assumed by profession groupings under CAMS 2011(%)
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87%
of (Vietnamese) respondents agree that “market economy is preferable to any other form of economic system”
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Figure 5. Views on prefered economic model by education level under CAMS 2011 (%)
About 10% of surveyed people employed by the private sector believed that the State-led economy is superior, and 7% declared that the choice of economic model is unimportant. With respect to education level, 87% of the respondents who have graduate or postgraduate degrees supported the market economy, which is a higher degree of preference than among those from lower level of education. e proportion of supporters of the State-led economy model in the group of undergraduates was 14%, considerably higher than the group with graduate and postgraduate degrees (6%).
e levels of support for the market economy model also differed according to the positions3 and ages of the respondents. Nearly 90% of those in senior positions supported the market economy model, compared with
85% of the group of medium-ranking to lowranking positions. e support level of people from 30-to-49 years old and over 50 years old both measured around 90%, compared to nearly 83% of those under 30 years of age. Figure 6. Views on prefered economic model by positions and age group (%)
3. The survey team of VCCI classified positions of the respondents into three groups. The senior group included deputy directors and above of central agencies, deputy heads or above of local government offices, deputy directors and above of enterprises. The group of medium-ranking positions included departmental levels (head/deputy head of a department) in national or local central agencies, enterprises and others.
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In evaluating the economic transition from a centrally-planned economy to a market economy in Vietnam from 1986 until now, one out of every four respondents agreed or totally agreed with the statement that Vietnam’s economy is now a ‘market economy’. e professional group that most ap-
preciated Vietnam’s efforts in this field (at 33% approval) was from provincial government or city administration, while the group from the media showed the least appreciation (at 3%). Nearly 60% of respondents stated that they only partly agreed with this statement.
Figure 7. Percentage of respondents who agreed or totally agreed with the statement “Vietnam’s economy is now a market economy”
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25%
of total respondents share the opinion that “Vietnam’s economy is now a market economy’’ At the other extreme, only 22% of the respondents agreed with the statement that the economy of Vietnam remains basically a state-led economy. e group with highest percentage in favor of this statement is
drawn from the foreigners living in Vietnam. is group includes respondents coming from embassies, development organizations (40%) and FDI enterprises (39%). No-one from the Party’s Central
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Committee Offices and only 8% from provincial government or city administration agreed with this proposition. It is noteworthy that the proportion of respondents from the State agencies or SOEs who
agree with the statement was lower than average, while the proportion of respondents from private enterprises, and civil society organizations was higher than average. Figure 8. Percentage of respondents that agreed or strongly agreed with the statement “Vietnam’s economy remains primarily a state-led economy”
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22%
of respondents think that “Vietnam’s economy remains primarily a state-led economy” Hence, it’s possible to say that foreigners and local people hold differing appreciations of the transition to market economy in Vietnam. Specifically, people working in international institutions or FDI enterprises saw a lower level of transition to a market economy in Vietnam than respondents working in “local” entities. It is quite understandable as “foreigners” might compare the economy of Vietnam today with their
home economies or with other countries in they lived or worked, while the Vietnamese people compare the current economy with that in the past.
In evaluating of the speed of transition to a market economy in Vietnam during the last five years (from 2006-2011), 44% of respondents said that the speed is fast or extremely fast, 28% thought that it is slow or extremely
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slow, and 26% considered the speed as neither fast nor slow. In consideration of each group, the domestic private sector – including self-employed businesses and private domestic enterprises – was most positive about the speed of transition to market economy over this period (about 55%), and the group with lowest rating was that of embassies and development organizations in Vietnam (approximately 29%). It is likely that the important changes (such as the Enterprises Law 2005, the Investment Law 2005, and the entry into the World Trade Organization (WTO) and Project 304) have
had positive impacts on the viewpoint of the domestic private sector; meanwhile, administrative measures to deal with inflation and macroeconomic instability in the past four years may have had unfavorable impact on their judgment of the pace of transition to a market economy in Vietnam. It is noteworthy that the survey results revealed that most respondents thought that the pace of transformation to market economy in Vietnam during the last five years had been slow or not fast, and that this judgment was common among nine out of the 11 profession groups.
Figure 9. Evaluation on the pace of transition to the market economy in Vietnam during the period from 2006 2011 (%)
4. The abbreviation name of Decision No. 30/2007/QD-TTg by the Prime Minister dated 10/1/2007 on approval of the project on simplification of the state administrative procedures for the period 2007-2010.
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e perception of the respondents reveals that people from all walks of life support the transformation of the national economic system to the market economy, with an overwhelming percentage of people viewing the market economy as the most preferable model.
riod is the period when Vietnam joined the WTO and participated in various multilateral and bilateral economic commitments. Under these accords, Vietnam was requested and expected to reform aggressively and quickly towards a more market-oriented economy to take full advantage of the benefits and overcome the challenges of international integration. is period also was characterized by the global financial and economic crisis, as well as food and energy price spikes. Vietnam fell into recession and stagnation during these years, suggesting that Vietnam did not take advantage of the available transformation opportunities as expected.
However, this section of the survey also revealed that, from the viewpoint of the respondents, Vietnam’s economy so far has not actually been a market economy despite the fact that reforms have been underway for 25 years. is attitude may reflect the "twilight" between the market economy and planned economy in Vietnam: on average only 25% of respondents said that – essentially - Vietnam's economy is a market economy, whereas nearly 60% of the respondents only agreed in part with that assessment. At the same time, 22% of respondents viewed the economy of Vietnam today as basically a state-led economy. Aer a quarter of a century, only a quarter of respondents believed that the market economy in Vietnam had been formed, so convincing the majority of people about the market economy status of Vietnam may take long time. However, it should be born in mind that different views about market economy may have considerable implication on people judgment.
It is noteworthy that the resolutions of the Party and the Vietnamese government in recent years recognized the limitations of the reform process and the gaps in the economic system, and identified the compelling need to change in the context of new developments in Vietnam. Promoting reform and perfecting market economy regulations are considered among the first priorities in the action plan aer joining the WTO, as well as in the Socio-economic Development Strategies for 2001 - 2010 and 2011-2020. e distance between resolution and action is, however, considerable. And the dim view of the pace of economic reform revealed how the failure in honoring commitments to reform may affect public confidence.
e survey also showed a significant percentage of people who were dissatisfied with the speed of economic transformation in the last five years, as 28% viewed the reform process as slow or extremely slow, and 26% thought the process neither fast nor slow. It is noteworthy that this five-year pe-
Another interesting result of this section of the survey is that the group of people who gave a lower rating to the formation of the market economy and the speed of reform
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in Vietnam is the group of people with more experience and better understanding of market economies, such as FDI enterprises, embassy officials, and development organizations. Assessments of the group from private domestic enterprises showed a more divided view, where the percentages of the people with either high or low ratings of the formation and speed of the reform were almost equal, highlighting uneven satisfaction. As future development of the Vietnam’s economy depends heavily on creating a favorable business environment for domestic and foreign investors, pushing the reform through is extremely important to help change perceptions and enhance confidence.
is basically a state-led economy”, the consensus view of respondents from State agencies or SOEs is lower than average, while, that of respondents from private enterprises and civil society organizations is higher than average. is suggests that State representatives and civil society have different views on the influence of the State in the transitional economy in Vietnam. People who work in public sector do not perceive the overwhelming role of the State in the economy unlike those who are under the influence of that role. One could suggest that as long as those in public sector people cannot perceive the State’s role, it will be difficult to generate an internal impetus strong enough to drive reform in the public sector – the most critical sector in the reform process.
On the other hand, in considering the statement “e economy of Vietnam today
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Determination of Prices One of the important characteristics of a market economy is that prices are determined by supply and demand and market competition. To measure the perceptions of Vietnam’s residents in this area, the World Bank and VCCI survey team prepared three statements for respondents to consider. e first was "Prices of essential items consumed by households should be determined by the market forces (i.e., by demand and supply), with no interference from the state." e second was "e State should intervene in the market place to stabilize price of essential items consumed by households." e remaining was a neutral option: “For people like me, it does not matter whether prices are determined by the market or the state." Figure 10. Determinants of prices on household consumer items, percentage of respondents
Surprisingly, 68% of the respondents to this survey said that the State should intervene in the market to stabilize prices of essential household items. Only 28 percent of respondents thought that the market should determine prices. e survey team tried to analyze respondents’ views by educational level but this failed to reveal any significant insights. ose who favored state intervention on prices is the same among those with or without university degrees (70%), while the proportions of those who favor the market setting prices were 28% and 24% respec-
68% “
tively. Two-thirds of the group of postgraduates supported State intervention in prices and 31% of them favored the role of the market.
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of the total number of respondents consider that “State should intervene in the market place”
ose profession groupings that most favor the role of the market included respondents from embassies and development organiza-
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of most of the essential goods and services consumed by households (such as electricity, petroleum, foreign currencies, gold, land, financial services, airlines, railways, etc.). Respondents’ attitudes may have reflected concern about the consequences if the State abandons control over prices. e second reason may reflect media attention to price movements. Specifically, the mass media oen blame price fluctuations on speculators or the profit motives of business people, and are quick to call for the relevant government agencies to intervene. Accordingly, the usual message is that State intervention is beneficial and brings more benefits to the consumers than market forces5.
tions (54%), followed by the media (41%), civil society organizations (32%), and private domestic enterprises (30%). In contrast, supporters of State intervention headed by people from the Party's Central Committee (87%), the National Assembly (78%), and SOEs (75%). Among the five profession groupings that most supported State intervention, four groups were from the State agencies, with the remainder from SOEs. Overall, the results of CAMS 2011 showed a relatively contradictory picture where the majority of Vietnam’s residents profess strong support for the market economy model, private ownership of enterprises, and a high degree of transparency in the planning and implementation of State policy, while at the same time they support State intervention with regards to prices of essential goods and services. What is the rationale for this contradiction?
Another factor may be Vietnam’s recent experience with rising inflation, which may encourage consumers to favor state intervention and price stabilization. Above all, these responses could reflect limited awareness and understanding of the market economy and how it can impact development results.
e first explanation points to the monopoly and dominance of SOEs in the market
5. Currently, there are a lot of discussions in Vietnam on the role of the State. For example, the recent debates on the role of the State in imposing the ceiling service fee for luxury buildings in Hanoi and Ho Chi Minh City. The People’s Committees in both cities issued Decision No 4250/QD-UBND providing ceiling rates for service fees for different types of buildings, effective from 29/9/2011. The highest rate is VND 4,000 (~USD 0.2)/m2/month. More details can be viewed at: http://www.anninhthudo.vn/Xa-hoi/Gia-tran-dich-vu-chung-cu-4000dm2thang/416852.antd
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Figure 11. State vs. market in setting the prices of essential household consumer items, classified by profession groups (%)
In assessing the current state of price-setting in Vietnam, 32% of survey respondents agreed with the statement "Prices of common items consumed by households are largely determined by market forces with lit-
tle or no state intervention," while 19% of agreed with the statement that "î ˘e prices of common items consumed by households are mostly regulated by State rules and regulations". Figure 12. Evaluation of the role of the State and the market in price determination (%)
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In considering the level of increase in number of State regulations in the past five years (from 2006 - to 2011) addressing the stabilization of prices of essential household goods, 59% of respondents said that there has been an increase and only 9% answered that there has been a decrease. Most profession groups
agreed that the number of regulations to stabilize prices has been increased in the last five years. It is perhaps surprising that the respondents from the group of embassies and development organizations who believed that there has been an increase, and those who thought that there has been a decrease, were the same.
Figure 13. Evaluation of the level of increase in number of the State regulations addressing price stabilization by profession groups (%)
In recent years, some local governments have initiated and implemented price stabilization schemes targeting some common household items. Under these schemes, the government provides financial support to some selected enterprises (such as interest-free loans or low-interest loans) to sell common items at lower-than-
market prices. î ˘e view of the State regulatory agencies is that the implementation of such practices has helped in controlling inflation and managing the increase in price of some commodities. However, many others argue that this program is not eective; goods are distributed in large supermarkets that the poor, who need sup-
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port the most, cannot directly access. In addition, it’s difficult to monitor the actual selling price and define the relevant price reduction against the market price, which results in distortion of the market and the creation of opportunities for misconduct or corruption.6
In this survey, the World Bank and VCCI raised a question to study the effectiveness of such schemes. It is notable that only 36% of respondents found these schemes effective in terms of price stabilization, compared with 57% who viewed them as ineffective.
57% “
Figure 14. Evaluation of the performance of price stabilization programs (%)
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of respondents feel that price stabilization program has been ineffective.
ere seems to be an inverse correlation between the degree of support for price stabilization programs and the level of education. Among respondents who have a high school degree or lower level of education, 58% believed that these programs are effective compared to 21% of the group of postgraduates. In contrast, 75% of the postgraduates claimed that the price stabilization approach is not effective, against 31% of respondents with a high school de-
gree or lower level of education. us, the level of awareness and understanding of the market economy does impact perceptions of the role of the State and the market, as well as the demand and the pace of transition to the market economy in Vietnam.
6. Reference should be made to: The Labor Magazine, Price Stabilization – possible or not? http://laodong.com.vn/TinTuc/Binh-on-gia--co-lam-duoc/43414 ; VnExpress, Price Stabilization Policy – reconsideration is needed: http://vnexpress.net/gl/ban-doc-viet/kinh-doanh/2011/07/can-xem-lai-chinh-sach-binh-on-gia/
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Figure 15. Evaluation of the performance of price stabilization schemes by level of education
up the shortcomings of the State and SOEs in business activities, and blame the market for unfavorable movements. Respondents’ perceptions to this section of the survey also reflect a limited awareness of the functions and the roles of the State and the market in the economy. is is especially true for those who work in the public sector. Five professional groups that boast the highest percentage of people supporting State intervention in prices come from State agencies and SOEs, lad by those from the Party's Central Committee agencies and National Assembly. When the persons who hold the most powerful positions and the greatest responsibility in terms of politics, economics, and media are supporters for State intervention in pricing decisions, it is obvious that the role of the market is likely to be somewhat limited. How people perceive things under this section of the survey once again reflects the shades of gray within the Vietnamese economic system, in which there is not a clear line between the role of the State and the market in business activities and in price determination. Given the direct involvement or intervention of the State into many business activities and in determining prices of many commodities, people are not clearly aware of the role of the market and instead have faith that the State’s ability to intervene in prices can protect them from adverse effects arising from market fluctuations. On the other hand, without unbiased and rigorous information, most people cannot determine the real roots of market volatility. Additionally, some government officials and media seek to cover
e increase in the number of the State regulations in terms of price stabilization in the last five years, as assessed by most of the professional groups, indicates an accelerating trend for intervention of the State into market prices, which is not in line with the requirements for reform and international commitments on trade liberalization. Meanwhile, despite the intervention of the State, rising inflation and continuously escalating commodity prices in the domestic market (which create a burden on the macroeconomic stability and real incomes of the Vietnamese people) characterize the Vietnamese economy at this time. is raises questions at to whether State intervention can be an effective and sustainable solution to stabilizing price volatility.
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State-owned Enterprise Reform State ownership and SOE reform have been attracting increasing attention and debate in Vietnam. As a result of the issuance of Enterprise Law 1999, the private economic sector has seen robust development, and the number of private enterprises and their contribution to the economy have been increasing. Although the development of the private economic sector has been encouraged, CAMS 2011 finds that the primacy of State-owned economic sector is reaffirmed in policies of the Party and government.
Figure 16. What kind of ownership is the more preferable? (% of respondents)
According to the World Bank and VCCI survey, a majority (70%) of respondents believe that private ownership in enterprises is more preferable than any other type of ownership. î ˘us, given the fact that most of the Vietnamese people appreciate a private economy model, one would expect that the process of SOE equitization undertaken by the government would receive great encouragement. Some 13% of the survey respondents said that State ownership is a good practice while 19% answered that ownership type is not important.
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As far as profession is concerned, a majority of respondents in all groups said that private ownership of enterprises is a preferable model. The group of media, local governments, embassies, and development organizations located in Vietnam had the highest evaluation of private ownership. Of the respondents from Party Central Committee agencies, 57% expressed a preference for private owner-
ship, which is the lowest level among the 11 profession groups of the survey. It is surprising that the respondents from the group of private enterprises were not among those that gave strong support to the private ownership model (59%, which is 10 percentage points lower than the average level), instead preferring State ownership (22%, 9 percentage points higher than the average level). Figure 17. Evaluation of ownership of enterprises by profession group (percentage of total)
î ˘ere was little dierence in preferences for private ownership or State ownership between graduates and post-graduates, but it is quite dierent between people with high school or below level of education and the two remaining groups. Specifically, 63% of the respondents from
the high school group supported the dominance of private ownership while 69% of the remaining two groups have the same view. On the other hand, 23% of the respondents from the high school or below group supported the dominance of State ownership.
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Figure 18. Evaluation of ownership by education level (percentage of consensus)
e results of CAMS 2011 regarding the changing attitude to ownership type in Vietnam’s enterprises were quite interesting. About 31% of survey respondents agreed that State ownership is the dominant type of ownership in Vietnamese enterprises, nearly double the proportion who do not believe this to be the case (16%). On average, 19% responded that private ownership is dominant in Vietnamese enterprises while 24% disagreed.
“
“
69%
of the respondents are of the opinion that private ownership of enterprise is preferable any other form of ownership If broken down by group of profession, 58% of respondents from embassies and development organizations agreed with the opinion that State ownership is dominant in enterprises in Vietnam. e agreement and disagreement percentages in such State agencies as local governments and Party Central agencies differ little (see figure 19). erefore, it can be reasoned that most of the survey respondents are wavering and cannot evaluate the status, role, and position of private ownership and State ownership in the current economy. Among the respondents, the number people believing that State ownership is dominant is always higher that of the opposite opinion in all the surveyed groups.
Economic reform in Vietnam over recent years was aligned with the transformation from a State-dominated economy to a multi-sector economy in which the private sector experienced great development. e number of SOEs decreased substantially from over 12,000 enterprises in the 1990s to over 3,000 enterprises late in 2011. However, up to now, most of the equitized SOEs have been small- and medium-sized and a number of enterprises suffer losses or struggle to be successful7. In addition, the State generally retains a significant stake (over 50%) in a large number of the equitized enterprises. 7. VDR 2012
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Figure 19. Response to “State ownership remains the dominant form of ownership in Vietnam’s enterprise sector” by profession grouping (%).
Figure 20. Opinion regarding the speed of transformation from State ownership to private ownership in 2006-2011( %)
Regarding the speed of transformation from State ownership to private ownership during the period 2006-2011, 37% people agreed that it was fast or extremely fast, while 34% answered that it was slow or extremely slow. Another 28% were ambivalent, declaring that it was neither fast nor slow. An insignificant number of people (1%) saw a reverse transformation in which the role of private enterprises was diminishing. As a result, there is no majority view among respondents as to the speed of transformation In reality, the equitization speed and the number of equitized enterprises dwindled significantly over the last three years years compared to the three years to end-20088.
8. According to VDR 2012, as a result of equitization, capital withdrawal, merger, acquisition, and liquidation of enterprises, the number of SOEs significantly decreased in the period of 2002-2005, but the pace of decline slowed in 2005-2008. In 2009 there appeared a reverse trend, given the establishment of 175 new SOEs at central level, which persisted throughout 2010 and 2011.
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Figure 21. Evaluation of speed of transformation from State ownership to private ownership in the last five years in Vietnam (%)
Similar to other aspects, the group of embassies and development organizations in Vietnam was the most anxious for a more rapid transformation from State ownership to private ownership in the last five years (83% evaluated the transformation as either slow or extremely slow), followed by the media group (48%). e most optimistic groups were from private domestic enterprise, with formal and informal (selfemployed business) groups with proportion of 47% and 50% viewing the pace of transition as slow or extremely slow respectively.
come from policy-making agencies (members of National Assembly, people from National Assembly offices, or the Party’s Central Committee Office). e continuing importance and scale of the State economic sector reflects the perceived importance of the role of SOEs in a socialist-oriented market economy. State-owned enterprises have always been considered as an important material base of the socialistoriented market economy: they have a leading role in the development of strategic industrial sectors of the country; they serve as a tool to implement industrial policies in line with directions set by the Party and Government; and they are a tool to regulate and stabilize the macro-economy to meet
It is noteworthy that the two groups that found the transformation process to be “normal” (i.e., neither fast nor slow) all
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social objectives. By such a concentration of resources, large State economic groups and corporations are expected to become the backbone of the economy with the ability to compete with large foreign enterprises in a fair and equal manner.
Figure 22. Evaluation of the contribution of large state-owned enterprises to the national economy (%)
In reality, SOEs have a dominating position in important economic sectors such as energy (coal, electricity, petroleum), transport, finance, insurance, and communications. ey have been deploying up to 39% of the capital of the economy, 45% of the total fixed assets, and 27% of banking credit9. SOEs have been using much higher amounts of capital and land against private enterprises. It is worrying that SOEs use much more capital to produce one unit of product as compared to the average levels of industry; the labor productivity of such enterprises experience slow increases compared to other industrial enterprises, for example. Meanwhile they see low efficiency of fixed assets usage, high financial leverage, and low financial security.
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e CAMS 2011 survey conducted by VCCI and the World Bank has shown the attitudes of Vietnamese people to the general contribution of SOEs to the economy, with over 41% respondents rating their contribution as average, while 28% saw it as positive and 29% negative.
28%
Figure 23 illustrates that people from different professions have different opinions as to the contribution of State corporations and groups to the economy. e most positive evaluation came from the group of the Party Central agencies (47%), National Assembly agencies (38%), provincial People’s Committees and departments, and – surprisingly - 33% of local private enterprises. ese profession groupings also have the smallest proportion of people negatively evaluating the contribution of State corporations and groups.
41%
of the respondents rate the overall contribution of the large state owned enterprises as “positive”
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29%
with “neutral” opinion and with “negative” opinion.
9. Data from 2009, source: VDR 2012
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In contrast, there is high proportion of survey respondents from embassies, development organizations, civil society organizations, media, and FDI enterprises that negatively viewed the economic contributions of State economic groups and general corporations. Specifically, 68% of respondents from embassies and development organizations and 61% from civil so-
ciety organizations had negative opinions on the contribution of these entities, while positive views among of these two groups was 17% and 14%, respectively. It is noteworthy that among 56 respondents from SOEs, only 13 (24%) had a positive assessment of the contribution of large SOEs and 12 (22%) had negative views. Figure 23. Evaluation of the general contribution of large SOEs to the Vietnamese economy divided by sector (%)
CAMS 2011 also measured the attitude to the degree of compliance with laws and regulations among dierent types of enterprise. Enterprises are divided into three types, namely SOEs, FDI enterprises, and local private enterprises. According to the survey results, about 10% of the survey respondents
fully believed in the compliance with laws and regulations across all types of enterprises. FDI enterprises are rated highest with respect to compliance with laws and regulations, while SOEs ranked last (see figure 24).
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SOE reform continues to be a crucial part of the future economic transformation of Vietnam. is has been reaffirmed in a number of documents of the Party as well as recent actions of the government10. CAMS 2011 shows that respondents strongly supported solutions to improve the functioning and efficiency of SOEs. It is interesting that most the survey respondents said that all eight categories of reform solutions to improve efficiency of SOEs that have proven popular in developing countries would be successful if adopted in Vietnam.
Figure 24. Evaluation of the level of compliance with laws and regulations across types of enterprises (percentage).
e most effective solutions are ranked in the following order: accelerating equitization and improving transparency (87% respondents for both measures, independent auditors (86%), strengthening regulation (83%). Figure 25. Evaluation of SOE reform solutions for Vietnam (%).
10. It was identified in the third meeting of the 11th Communist Party of Vietnam Central Committee that the reorganization of SOEs is among three urgent priorities. The government has taken some initial actions, specifically as of 21st November 2011, the Ministry of Finance issued Decision no.2799/QD-BTC on the establishment of the Steering Committee to Develop SOE restructure project.
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e CAMS survey revealed that the Vietnamese people have a better understanding of various enterprise models in the market economy, with a high proportion supporting a private economy. Even among the group of survey respondents from the Party’s Central Committee Office (who gave the lowest rating to private economy model), over half (57%) supported this private sector while less than one-quarter (14%) supported State ownership. e development of Vietnam since the beginning of reforms, especially from the debut of Enterprise Law 1999, and the robust development of the private sector have contributed to the formation of such perceptions.
Vietnamese enterprises, nearly 31% came out in favor of State ownership against 10% for private ownership. is again confirmed that the State-led economy continues to play a dominant role as compared to that of the market and the private economy. is provides a picture of an economic transformation process in Vietnam that has raised hopes of freedom and equality in doing business, accompanied by a high degree of trade liberalization, but that is blighted by a slow process of ownership transformation. In reality, although the number of SOEs has substantially decreased and remains at a low level compared to the total number of enterprises in Vietnam (about 1,300 fully owned by the State out of more than 600,000 enterprise), the State retains a significant ownership stake in enterprises. As a result, private ownership is limited and it is difficult for the private sector to access resources, stunting its development. is is regrettable given popular recognition of the importance of private ownership, even in the State sector.
According to the responses as to the speed of transformation from State ownership to private ownership in the last five years, the differing views might be explained by considering two factors: a lack of transparency in the information regarding the shi in ownership, or different perceptions of the necessity to change the model of ownership in the aermath of Vietnam’s accession to the WTO. It was interested to note that two groups – comprising respondents from the National Assembly and from Party Central Committee agencies – decided the transformation was taking place at a “normal” pace. Both groups have important roles in pacing the process of transformation of ownership, and their responses suggest they see no need to accelerate this effort.
e attitude of the Vietnamese people toward the contribution of large SOEs to the national economy clearly shows the dissatisfaction among a majority of the survey respondents, with 70% giving normal and negative responses. However, the people from the Party’s Central Committee Office, the National Assembly Offices, provincial government and city administration hold more positive assessments than other groups. is may arise from the different evaluation method of these three groups, which was not absolutely based on
When considering whether State ownership or private ownership is dominant in
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laws, regulations, and policies as well as of operations of enterprises, the lack of people’s confidence in this respect is understandable. e lowest level of confidence in SOEs may arise as a result of popular information and discussion in recent years about persistent weaknesses in the management of SOEs.
their actual contributions to socio-economic development or the efficiency of capital usage in large SOEs. No matter the reason, this view must be taken into consideration as these agencies together have a great role in issuing, supervising, and implementing policies on investment and the State management of SOEs, as well as on the State assets held and used by such enterprises. If these agencies do not have accurate assessments of the contributions of SOEs to the economy or produce higher and more rigorous standards on SOEs, it will be difficult for the Vietnamese economy to improve efficiency and increase competitiveness.
e support evident for solutions to improve the functionality and efficiency of SOEs suggests that the people are anxious to see strong, effective, and absolute reforms at SOEs. e fact that respondents highly appreciated eight groups of solutions that have been popular in reforming SOEs in developing countries shows that the people will wait for different methods that are closer to popular international standards rather than conservative approaches that appreciate the “unique” features of Vietnam, which only seem to prolong this crucial reform process.
Respondents’ views with respect to the compliance with laws and regulations of different types of enterprises highlight an extremely low level of public confidence in enterprises in general, and in SOEs in particular. Given the lack of transparency of
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Improvement of Transparency and Access to Information Transparency is fundamental to any market economy and is a topic attracting attention in Vietnam, particularly in the public sector action plan. Transparency has increasingly gained importance as both an organizational principle and a goal of administration management in recent years.
Figure 26. Evaluation of the role of transparency in planning and implementing State policies (%)
When evaluating the role of transparency in Vietnam, most of the respondents to the CAMS survey (92%) were of the opinion that high transparency in planning and implementing State policies is crucial for development. Another 3% of respondents considered transparency in planning and implementing State policies as unimportant, while 5% consider a lack of transparency as a normal phenomenon in State activities. (See Figure 26)
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Figure 27. Attitudes toward the role of transparency in planning and implementing State policies, broken down by profession groupings (%).
People of different profession groupings may have different expectations regarding the role of transparency. e group with the highest requirements for transparency included media, civil society organizations, and embassies and development organizations. e proportion of respondents from businesses, the Party and National Assembly offices, and organizations with high requirements for transparency is considerably lower than that of other groups, and even lower than the average of all surveyed groups.
92% “
Regarding the process of policy planning and implementation in Vietnam, the findings of CAMS 2011 show that the level of transparency in policy planning and implementing remains rather low. On average, only 17% of respondents thought that the
process of policy planning and implementation of the Vietnamese government is highly transparent; and 25% is the highest rate of agreement among groups; whereas 35% of the respondents agreed with the statement that this process remains opaque.
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of the respondents agree that “High level of transparency in state decision and policymaking process is essential for development”.
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Figure 28a. The proportion of respondents supporting the viewpoint: “The state’s decision and policymaking process is highly transparent in Vietnam”
Figure 28b. The proportion of respondents supporting the viewpoint: “The state’s decision and policymaking process remain highly secretive in Vietnam”
Figures 28a and 28b illustrate that a considerable proportion of respondents from embassies, development organizations, media, and civil society organizations are of the opinion that the process of policy
planning and implementation by the Vietnamese government lacks transparency. Only 3% of the respondents from this group feel that the process is highly transparent.
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policymaking and implementing process, 53% of the respondents replied that transparency increased (significantly or rather quickly) for the five-year period from 2006 to 2011. Only 4% of the respondents are of opposite opinion.
î ˘e group having the least most positive view of the transparency of the process of policy planning and implementation by the Vietnamese government includes people’s committees, departments of provincial levels, ministries, and domestic private businesses. According to figures 28a and 28b, a small proportion of respondents in all groups had either high or low appreciations of the transparency in policy planning and implementation by the government. î ˘is at least partially reflects the fact that most of the Vietnamese people remain uncertain about the transparency of the policy-making process in Vietnam. When being asked about changes to the level of transparency in the
However, it is worth-noting that the group including party bodies, central and local State agencies (excluding the National Assembly) is most satisfied with the changes in the level of transparency in the policy making and implementing process. Once again, media, embassies, and international organizations are the groups that expressed the least satisfaction with the level of recent changes in transparency.
Figure 29. Evaluation on the level transparency in the policy making and implementing process over the past 5 years
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tions. While development organizations, media, and civil society organizations gave a very poor evaluation of the transparency of the policy making and implementing process in Vietnam, respondents from people’s committees, provincial departments, and industries, governmental and central party organizations and agencies had a considerably higher evaluation of the same. Similar results are obtained from the survey on how satisfied respondents feel with the improvement in the level of transparency in the policy making and implementing process in Vietnam over the past five years. Overall, such a picture raises questions about the motivation or enthusiasm of these key actors to enhance policymaking transparency.
According to the results of the section on the role of transparency, most people view that high transparency in the State’s policy making and implementing process is crucial for development. At the same time, people said they were dissatisfied with the transparency of the policy making and implementing process in Vietnam. e proportion of respondents who viewed the policymaking process as opaque doubled that of those who considered this process as highly transparent. In this section of the survey, we have once again seen the difference in the viewpoints of people from policymaking organizations as compared to those from domestic civil society and development organiza-
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Opinions on Vietnam’s Economic Situation When being asked to make a comparison of Vietnam’s economic situation with the recent past, 47% of respondents agreed with the assertion that the Vietnamese economy is improving compared with the previous five years, whereas 18% disagreed with this viewpoint. e group of FDI businesses, domestic private businesses, people’s committees, provincial departments, and industries had the highest appreciation of the economic changes in Vietnam against the pre-
vious five years. Having the least positive viewpoint on the economic changes in Vietnam was the group of media, civil society organizations, embassies, and development organizations. Figure 30. Percentage of people supporting the viewpoint: “The economic situation in Vietnam is better today than around 5 years ago”
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fied included people from embassies, development organizations, media, and civil society organizations.
Only the group of FDI enterprises and local government agencies had a majority view that “e economic situation in our country is better today than around five years ago.” Among the remaining groups, only a slim proportion agreed with such a viewpoint. Additionally, 41% of the respondents felt unsatisfied with the current economic situation, whereas only 18% were satisfied.
Among the group of enterprises, SOEs seemed to have the most negative viewpoint, with the percentages of satisfied and unsatisfied being 9% and 45% respectively. e opinion among private domestic enterprises was a little more evenly divided, with the percentage of satisfied and unsatisfied being 23% and 34% respectively. In the group of FDI enterprises, the percentage of satisfied and unsatisfied was almost the same, being 29% and 30% respectively.
It is worth-mentioning that in all the surveyed groups, the percentage of people dissatisfied with the current economic situation was higher than those who were satisfied. e group feeling the least satis-
Figure 31. Percentage of those agreeing with the statement “On the whole, I am satisfied with the present state of the economy”
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Despite fostering a negative view of the current economic situation, the Vietnamese people seem to have a more positive view of the future. Of all respondents, 67% stated that their children would live a better life than they do. Only 9% of the respondents expressed any doubts – a significant difference. In particular, both the domestic and foreign private sectors had the highest proportion of those feeling
quite positive about the future. Although not impressed with the economic changes in Vietnam in recent years and unsatisfied with the current economic situation in Vietnam, people from embassies and development organizations still felt positively about Vietnam’s economic future, with 68% of the group reporting a positive viewpoint, which is higher than the average of the surveyed sample. Figure 32. Responses to the assertion that “Children who are born now will have a better life than my generation”
In this final part of the survey, the findings on people’s comparison of the current and recent economic situations in Vietnam fail to surprise. Nearly half of the respondents thought that Vietnam’s current economic
situation is better than five years ago. is evaluation may be based on rather impressive statistical data highlighting the development achievements of Vietnam during this period, as well comparison of the last
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in the groups of FDI companies, domestic enterprises, policy makers and implementers is higher than that of the groups of development organizations and civil society organizations. It is possible to conclude that satisfied people are more capable of overcoming difficulties in the economy, although this does not reduce the burden of responsibility on policymaking and implementing agencies to spur development and improvement within the economy.
year and the first year of this five-year period, given global economic crises. Foreign direct investment firms and private domestic businesses enjoy a more open and free business environment as a result of the Law on Enterprises–2005, and the Law on Investment–2005. Moreover, localities have also benefited from a determined process of decentralization. It is, therefore, easy to understand the high percentage of people with a positive viewpoint in this group. Opposing viewpoints of other groups may be derived from the fact that they have the access to more thorough and explanatory economic analysis. As such, they can see the more complicated aspects of the development process in Vietnam over the past five years.
It is good news that - although expressing dissatisfaction with the current economic situation - most respondents (including those from development organizations) are quite positive about the future. is optimism is not unfounded, given the great potential of the Vietnamese economy, particularly as Vietnam has already grasped its internal problems and proposed proper programs for overall economic reform. At the same time, the country is pursuing the goal of improving the framework of its market economy, and further defining the path of sustainable development.
Given the current economic situation, the difficulties of the Vietnamese economy are having a strong impact on the lives of many Vietnamese, as well as on the activities of organizations, and agencies. As such, the number of respondents dissatisfied with the economy was double that of the satisfied respondents. It is worth noting that the percentage of satisfied people
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Conclusion CAMS 2011 has provided a measure of the perception and feeling of the Vietnamese people on its market economy, many of its most significant elements, and the status and the level of transformation of the Vietnamese economy. e survey has yielded many interesting findings.
perior model, most of the Vietnamese people – especially those working in the Party, government agencies at local and central levels – strongly backed the State intervention into the process of pricing of common items. is point of view is in stark contrast to those of expatriates living in Vietnam. e viewpoints of people of different education levels on this issue also differ; those with a high level of education tended to profess less support for State intervention than those of lower education levels.
A majority of the Vietnamese people, regardless of their profession, ages, and level of education support the market economy, considering it a preferable economic model. Is the current Vietnamese economy a market or a State mechanism? e answer to this question has yet to be finalized. e number of people that view Vietnam as a market economy accounts for a small proportion; remarkably, it is also the case for the number of people that view Vietnam as a State-led economy. As such, it is possible to conclude that – according to the majority opinion – Vietnam’s economy is neither a State-controlled nor a market-based model. A majority of people were also of the opinion that the speed of Vietnam’s transformation into a market over the past 5 years (2006-2011) is rather slow.
Half of the Vietnamese people think that the prices of all common items are decided both by the market and through government intervention. Interestingly, although a majority of people consider the current process of transformation to a market economy as slow or not fast, they continue to believe that the current level of government intervention into the pricing of common items is not as high as expected. ere seems to be a clash of perceptions. On the one hand, they would like to speed up the transformation to a market economy, while on the other, they expect deeper government intervention into the process of pricing common items. As such, the intervention of the State in
Although survey respondents supported the concept of a market economy as a su-
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stabilizing the prices of common items over the past five years appears to be a normal phenomenon, which is not beyond the expectation of the majority of Vietnamese people. Besides, although strongly supporting State intervention in price-stabilizing programs for common items, most of the respondents think that such programs implemented by certain local authorities are not particularly efficient.
differences between the viewpoints of Vietnamese and expatriates living in Vietnam. If most expatriates think that the speed of transformation to private ownership over the past five years is slow and extremely slow, only a small proportion of Vietnamese share this point of view. e same can be said of the differing viewpoints on the contribution of large SOEs to the economy. A majority of foreign respondents and civil society organizations have negative views on the contribution of State corporations and groups to the economy, whereas only a minority of the other groups shares this opinion. As Vietnam has applied only one of the eight popular measures for reforming and improving the efficiency of SOE there are still many steps to be taken and it is quite feasible to speed up this process of reform in the future. is also corresponds to the expectation of the Vietnamese people, who find private ownership superior to State ownership.
A strong, developed, and competitive private sector is the foundation stone of a market economy. A majority of the Vietnamese people support and find private ownership superior to State ownership. Regarding the current status of various economic sectors, although more people think that the State sector has a dominant role than those who ascribe this position to the private sector, they remain a minority. Overall, the majority of the Vietnamese people is uncertain whether the current economy is denominated by the State or the private sector. To the contrary, most of the foreign groups in Vietnam believe that the current economy is dominated by the State sector.
Transparency is one of the fundamental aspects of a market economy, a view shared by most of the Vietnamese people, who also consider transparency an important factor for the development process. While the surveyed groups have reached a significant consensus that the process of policy planning and implementing in Vietnam lacks transparency, there are notable differences between expatriates, civil society organizations, and the remaining groups on the assertion that policy plan-
With respect to the speed of transformation from State ownership to private ownership, the numbers of respondents across three different groups of opinion (fast or extremely fast, slow or extremely slow, and neither slow nor fast) are quite similar. In this respect, there are significant
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ning and implementation in Vietnam is an opaque process. In other words, most Vietnamese people think that the current process is not entirely transparent, but it is not as closed as it used to be. Most of the Vietnamese working in State and Party organizations and in SOEs think that the level of improvement of transparency over the past five years has been rapid. î ˘is viewpoint is shared by only a small proportion of expatriates, people working in the media, and in civil society organizations.
Among the groups of Vietnamese people, there are also different evaluations of the role of the State and the market. The proportion of people having a positive attitude toward the role of the State tends to be higher in the group from State organizations, the Party, and from National Assembly offices. More people having higher levels of education tend to support a market-driven economy compared with those with lower a level of education. Based on these findings, we can draw three policy implications for increasing the scope and speed of transformation to a market economy in Vietnam. Firstly, it is necessary to enhance research and communication to improve the awareness of the people of the aspects of a market economy. This is necessary to make people – and especially the media - clearly understand the definition of a marketdriven model, how it operates, and each crucial element within the overall mechanism. Secondly, it is necessary to keep the Vietnamese people more informed about the current status of the economy so that they can make better comparisons with other market economies, as well as the pace and nature of change within their own economy. Thirdly, there remain considerable scope for Vietnam to transform its economy into a market-based model, and a greater pace of change.
In short, the Vietnamese people in general support the idea of a market economy and its core elements. However, different viewpoints among different surveyed groups have been found on the current status and the speed of transformation into a market economy during the 2006-2011 period. Opinions differ most frequently between expatriates and Vietnamese people. Most expatriates do not express a high appreciation of the market nature of the current Vietnamese economy, nor the speed of transformation toward a market economy in Vietnam over the past five years. Most of the Vietnamese, however, have yet to develop any clearly-defined opinion on the current status of the Vietnamese economy. As such, they are unable to accurately assess the speed of transformation.
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