Viet Nam is developing a comprehensive competition policy scheme in an effort to refuel reform and accelerate growth towards a market-based economy.
|A production line for electronics spare parts at SYNOFEX Viet Nam Company in Hà Nội’s Quang Minh Industrial Park. Việt Nam is developing a comprehensive competition policy scheme to boost growth. — Photo Quang Hải|
Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM) said at a seminar in Hà Nội yesterday that the Government assigned CIEM to develop the project on comprehensive competition policy in line with Resolution 19 about improving the country’s business climate and national competitiveness.
Cung said that the project on competition policy, which was expected to be core driver of the second wave of economic reform, would be completed next year.
Three decades have passed since Việt Nam embarked on the process of economic reform, room for reforms by using demand-stimulus policies, like loosening monetary and fiscal policies and State investment, have narrowed down, Cung said.
“Việt Nam could not continue using demand-stimulus policies to boost economic growth because these policies threaten to trigger macroeconomic instabilities,” he said.
“It’s time the country shifted to enhancing productivity and efficiency to ensure sustainable economic growth,” Cung said, adding that focus should be placed on developing competition policy in the next period of reform.
This became critical for the Southeast Asian economy to re-energise its economic growth and narrow the gaps with other countries in the region.
During the past decade, Việt Nam’s economic growth had been in a slowdown, from 7.8 per cent in the 1990-2007 period to 6.7 per cent in the 2007-12 period and 5.8 per cent from 2012 to date.
Cung said that the economic slowdown could not continue, especially when the country was entering a rapid process of international integration. “Only through reform, can the economic growth rate be restored to 7-7.5 per cent,” Cung stressed.
Cung said it’s time Việt Nam geared up efforts to establish a fully market-based economy, adding that there were still distortions due to the significant interference of the State management agencies in the market.
“The country pressingly needs intensive reform across all sectors, especially in State governance,” Cung said. “Reform will be thorny as issues related to groups of interest or preference to State-owned enterprises (SOEs) and ownership of public assets must be tackled thoroughly.”
The development of the private sector must be promoted, he said.
According to Lanchlan Rosalie, from the Australia Productivity Commission, the private sector should be encouraged to participate in sectors which were now under the monopoly of SOEs, like power and telecommunications.
She said that it was important to eliminate preferential policies given to SOEs and promote the competition between the SOEs and private firms.
Economic expert Lưu Bích Hồ said antitrust was essential to promote competition.
Việt Nam ranked 56th out of 140 economies by the World Economic Forum’s Global Competitiveness Index.