VNU JOURNAL OF SCIENCE, ECONOMICS-LAW, N01E, 2004 SOM E THOUGHTS ON THE ROLE OF THE VIETNAM ESE STATE IN THE PR O C ESS OF SH IFTIN G TO THE MARKET ECONOMY Tran Anh T a i(*} Nowadays, in th e world, there are Low developm ent level; under­ many different economic operation models developed labor a t varying levels of success Yet th e re is no techniques and model t h a t operates w ith o u t th e S ta te ’s based economy w ith tradition al farming; interference A stron g and intelligent state rice monoculture; im balanced and weak is one of th e d e te rm in a n ts for th e success in d u stria l stru c tu re ; low living stand ard , of an economic operation model high unem ployed rate These not only Shifting from a centrally fostered d isad v a n ta g es for th e formation and developm ent of th e m a rk e t economy the form ation a n d developm ent process of - The relatio ns of production were set the m a rk e t economy in V ietnam , which is regulation, will th e have of up and m a in ta in ed by the domination role differences of public ow nership of m eans of production S ta te ’s m any role u n d e r types: th e people ownership and from the ordin ary m a rk e t economy collective ownership T ypical C h a cteristics o f the P r o cess o f S h iftin g to Market E om y in V ietn am and th e Role o f the State 1.1 B ackground of M a rk et Economy in V ietn a m agriculture- and m odernization b u t also created and economy u n d e r th e regulation of th e State, with technology; backw ard caused difficulties for th e industrialization planned economy to the socialist-oriented m a rk e t associated divisions; th e S h ift P rivate ownership was not accepted a n d w as the object of transfo rm atio n and abolishm ent Production to prim arily and m a in ta in e d exchange on the were basis of m aterial relation The relation between commodity a n d money created an opposite * D om estic C ontext system t h a t was, in fact, not accepted and After a long tim e op erated u n d e r the was re s tra in e d to its maximum State- development The m a rk e t relations were subsidized m echanism s, th e V ietnam ese alm ost not set up or existed in a formal economy will have following fea tu re s w hen a nd distortional m anner centralized b u re a u cra tic and shifting to m a rk e t economy: - The economy was a closed, self- existing and severely im balanced system The official economic operation mechanism n Dr., Faculty of Econom ics, Vietnam National U niversity, Hanoi was 45 the ordered mechanism In this T ran A nh Tai 46 mechanism: the S ta te re g u la te d economic co u n tries to join in in te rn a tio n a l exchange activities th ro u g h a sy stem of production an d co-operation e a s ie r a n d more equal p lans an d product th ro u g h a distribution, system of price, and foreign exchange te and in te re s t te th a t are stip u la ted strictly an d subjectively - The production s tru c tu re ch aracteristic focused of monopoly spread th a t on were a h a d its scale tr e n d of regionalizing the d ev elop m ent w e n t along w ith e n h an c in g th e protectionism T h is tre n d is c o n tra ry to developm ent H ow ever, in t h a t c u rre n t state situ a tio n , it o ccurred from typical causes, owned of w hich th e dire c t cau se w as the dynam ic The estab lish ed large T he th e first one a n d is th e essence of m a rk e t its operations on S ta te en terp rises - and w ithout competition The production relation s were vertical u n d e r th e m ech anism of issue and delivery, m aking th e horizontal relations a very difficult situation d evelo pm en t of new in d u strialized countries - The collapse of Socialism in the form er Soviet U nion a n d E a s te r n Europe c re ate d a sign ifican t space in the dev elo p m ent of V ietnam T h ere a re two - Finance w as weak, u n stable, based on sides of a coin h ere Along w ith escaping a less developed economy t h a t bore heavy from consequences of war T he high inflation V ietn am h a s c h an c e s to join in an opened lasted too long, domestic savings was not world yet operation Also, V ie tn a m lost a reliable existed, and centralized th e and m a n ag e m e n t a pp rop riate bureaucratic, state-subsidized m ech an ism s to objective were ru les of a closed and economy subsidized w ith a more system, effective an d firm sup po rt not the m a rk e t economy * In tern a tio n a l C ontext 1.2 The R e g u la tio n o f C ontext to the R ole o f th e S t a t e in S h iftin g to M a rk e t E om y in V ie tn a m In th e above-m entioned specific V ietnam w as shifting its economy to context, w h e n co nsiderin g th e role of the m ark et economy w hen the in te rn a tio n a l S ta te in th e process of shifting to m a rk e t context economy in V ie tn am , in o ur opinion, we and th e world situ a tio n had s u b sta n tia l changes Some of which are as follow: should pay a tte n tio n to th e followings: - In V ie tn am , th e re is a historical fact The tre n d of in te rnation alizatio n, th a t th e S ta te integration into th e world economy an d the economic d e v elo p m en t developm ent process of an organic world fo un datio n is m arket o w n ersh ip and economic creating caused m any relation s op po rtun ities c h an g es b etw een for in the nations, the poor b e tw een subsidized th e had th e a-' decisive role in for decades popularity th e of public hom ogeneousness c e n tra lly economy Its with plan n ed and m aterialized V NU Jo u rn a l o f Science, Econom ics-Law, N„IE, 2004 Some thoughts on the role o f the Vietnamese state in the economic relations and th e a u ta rk y economy 47 follows, bring into full play the internal forces of its economy, and learn effectively From t h a t s ta r tin g point, th e reform can only be im p le m e n te d effectively if it is from successes and experience of the pioneer counties In th a t condition, it could not be left for th e “invisible h a n d ” A initiated by th e State strong and intelligent S ta te is one of the - V ietnam is in th e process of shifting d e te rm in a n ts for th e success to m a rk e t economy, so th e role of th e State is not ju s t lim ited in overcom ing and correcting th e negative effects a n d defects of the m a rk e t economy, b u t its m ain duty is to establish developm ent themselves th e fo u n d a tio n of for the m arket Here, th e relations d e v elop m ent of m ark et relatio ns is asso c iate d w ith the r e ­ aw aren ess process and, Given this, it is possible to say th a t w hen shifting to a new stage, the role of th e S ta te is not decreased b u t increased On the other hand, it has shown a trend t h a t contrary to the changing process of the role a n d economic function of the State of V ietnam Shifting to m a rk e t economy m eans shifting to a new system, where the th e re fo re , it is m a rk e t w ith its objective rules will shape a necessary to overcome s te p by step and new power regim e is th a t ind ep end en t of correct the defects a n d fa ilu re s of the the State The m a rk e t itself contains a participation of th e S ta te in re g u la tin g the self-adjustm ent m echanism and th a t is the economy in th e p a st decades to conform to main m echanism to regu late th e economy the ta sk s in th e new stage This is completely different from the old system in which the S ta te directly - V ietnam economy from is a sh iftin g poor, agriculture-based to m a rk e t b a c k w a rd economy and M ost of V ietnam ’s population is in ru r a l areas Therefore, in o rder to b rin g into play the key role of a g ric u ltu re a n d to help the farm ers u n d e rs ta n d th e b e n efits a n d , there from, mobilize th e m a jo rity of people to take p a rt in the d e velo pm en t, especially in the first stage, th e role of th e G o vernm en t controlled the economic system s regulation economy So, these two have two different m echanism s, two different power regimes, and th e specific method of a nd the e x te n t to which the State p articipates in regu la tin g th e economy are also different The tra n sitio n to m arket economy relatively reallocates the regulation power betw een the S tate and th e m a rk e t in th e way th a t limits the is crucial Besides, how a poor co un try can S ta te ’s power a n d extends the m a rk e t’s cope the power However, the n a tu re of the m atter big is not to abolish the economic role of the - As a developing country, V ietnam State, b u t th e method, domain, and scope to im plem en t th a t role will base on other with economic poverty w hile d evelopm ent is a s s u rin g also a challenge to the G o v e rn m e n t should not by pass s ta g e s but should utilize the a d v a n ta g e s of a c o u n try th a t VNU Journal o f Science E conom ics-L aw , Nt J E 2004 ru les th at economical are more subjective and T ran Anh Tai 43 In accordance w ith subjective logics of m a rk e t economy progress, it objective operations of th e State The could be shifting of V ietnam economy since 1975 sep a te d into two ta s k s relatively to the h a s shown t h a t the economic reform is a two stages of m a rk e t economy progress: struggle the stage of shifting to m a rk e t economy system (centrally planned m echanism ) and and th e stage of o p eratin g th e s tru c tu re d unorthodox one (free m arket), following m a rk e t economy the tendency of confirming th e m ark et Basically* V ietnam is in th e process of carrying o ut th e first ta s k to achieve a structured prim ary m a rk e t economy mission to w ith develop the an nstituticnal framew ork The n a tu r e of this 'ask is tc create m a rk e t subjects a n d a free b u s in e s s environm ent, s tru c tu re functional market: labour m ark et, financial m arket, 'tock rrarket, ta x system , price and interest late stige mechanism orthodox That economic process could be considered in th e following periods: Period 1975 - 1986 From th e policy perspective, the economic reform in V ietnam s ta r te d from 1979 by th e resolutions of the 6th Plenum of the P a rty C entral C om m ittee (4th P arty Congress) This w as the re s u lt of a long accum ulation of restrictions and contradictions du rin g nearly two decades Succeeded to and concomitant with the first betw een is th e operatio n of the of existence of th e b u reau cratic centrally m echanism s planned, w ith State structured m a rk e t system In th is stage, subsidies The economic reform s included: the State’s influences are associated with firstly, th e Directive No 100 of th e C entral the lonf-term economic grow th and to C om m ittee’s S e c re ta ria t (1/1981) officially de\elop macro balances as th e conditions regulated for th a t jrowth agriculture; secondly, the Decree 25/CP on th e product C ontract in the portions in in d u stria l production; Economic R eform in V ietn a m from the lolicy P r o c e ss P e r sp e c tiv e The 'ealities in th e la s t 15 y ears have followings were th e Resolution 26 of the Politburo and Directive 109 of th e C entral C om m ittee’s S e c re tariat shown tiat the shifting to m a rk e t economy im provem ent of has depended a lot on policy process The circulation, especially the Resolution of the reform s fast or slow, stable or troubled, 5th P a rty Congress, 8th Plenum (6/1985) on grew or receded - all th e se are originated adju stin g the price level, reform ing the frcm salary vhat policies does th e S tate regime on the distribution ' and in compliance irrplemcharisrr economy However, in fact, th is was a to the new one period of extrem ely troubled, u n stable th e unavoidable cost for th