State-run sector plays pivotal role in national economy
Chairman of the National Assembly's Financial and
Budgetary Commission Phung Quoc Hien talked with Vietnam Economic Times
about the State's role in the market-oriented economy.
*The
revised Constitution took effect on January 1 but there remain concerns
over whether the State economic sector should continue playing the key
role. What is your opinion?
While a number of countries are
reviewing their development theory, we (Vietnam) are on track for
building and operating an effective market-oriented economy, which can
serve as a base for the country's development.
I support the
fact that the revised Constitution says the State economic sector must
play the key role. This would enable the State-run sector to guide and
push forward the nation's economic development and help fix its
downsides such as overly favouring benefits, unfair competition, not
favouring essential goods, fraudulent trading, tax dodging, unemployment
and negative impacts on the environment. No other economic sector could
replace the State sector in doing those jobs.
*So it seems the State still wants to take charge of managing the economy. Is that right?
We
shouldn't worry about this as the revised Constitution says all
economic sectors, including the State sector, will have to operate under
market mechanisms. This means all participating sectors will have an
equal playing field.
For the State to manage the market economy
means that it will introduce a system of policies and regulations to
serve as a base for the market to run on. The State's involvement in the
market will be completely transparent. The State will only give
administrative orders for the national benefit and to businesses that
violate the laws, and will limit giving such orders to State-run
enterprises. Management by mechanism, policies and laws should be
upheld.
*Does the State economic sector maintaining its key role mean State-owned enterprises (SOEs) will continue to be "favoured"?
We
considered the SOEs' role while discussing the revision of the
Constitution. From my perspective, the role of the State sector in the
market-oriented economy is very significant. In fact, there is a lot of
concern over the role of SOEs, as their performance has been poor and
ineffective in past years. Quite a number experienced revenue losses and
committed bad debts, causing the public to worry.
Poor
management, whether at State-run, private or foreign-invested
businesses, will definitely result in ineffective operation and revenue
losses. There are SOEs that experienced revenue losses - but so did
thousands of non-State businesses. The weaknesses and poor performance
of the State economic sector, in my view, were not the result of its own
nature, but loopholes in our policies and ineffective law enforcement.
The selection of leaders and managers in the State sector has not been
good, which led to abuse of power and corruption.
*So in your view, the key role of SOEs should not be affected by the mistakes they have made?
We
should go deeper into the role of SOEs. We should also admit that many
are performing poorly and take responsibility to fix them, rather than
denying their problems.
However, look at what the SOEs did during
the economic downturn in recent years. Without them, would there be
investment in developing remote and mountainous areas? Would private
businesses invest in projects in poor and distant areas that have no
potential to make revenue? SOEs did.
One more thing, if the SOEs
operated only for their own benefit like other companies, then this
would not fulfill the goal of leading the nation's economy under the
State's orientation.-VNA