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Vietnam Today

Market economy preferred

Released at: 22:39, 23/07/2015

Market economy preferred

Survey respondents overwhelmingly support Vietnam's transition to a market economy.

by Minh Tuyet

Eighty-nine per cent of the 1,643 respondents in the Vietnam in Transition - Changing Attitudes to the Market and the State (CAMS) report, released on July 23 at a workshop of the same name, said they preferred Vietnam to have a market economy.

There seemed, however, to be no clear sense of whether Vietnam has a State economy or a market economy. In the survey 49 per cent of respondents agreed that Vietnam’s economy is basically a market economy, while 36 per cent believed it was a State economy.

Regarding the speed of economic reform, only 29 per cent of respondents believe the pace of Vietnam’s economic transition to a market economy over last five years has been quick, with 36 per cent saying the process has been slow. Moreover, the report also shows that policymakers are more optimistic about the pace of the transition than non-state enterprises, media organizations, and non-government organizations.

Explaining the difference in views between policymakers and businesses about the pace of the transition, Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc made two points. “The conduct of the transition has been the weakest point,” he said. He noted that policymakers tend to be removed from reality. Secondly, he stressed the role of businesses in the transition process, where they have to enhance their abilities and be active in the process.

Though most respondents support the market economy, they still want intervention by the State to stabilize the price of necessary goods, as said by 75 per cent of respondents to this most recent survey; a 7 per cent increase compared to CAMS 2011.

Finally, only about 20 per cent of respondents were satisfied with the current economic situation, though 63 per cent believe in a better future.

A State-led economy is defined as one in which the State, through central planning, allocates resources for different activities, where State capital is the dominant form of ownership, and where prices are controlled or heavily regulated by the State.

A market economy is defined as one in which resources are allocated by market forces, with the State’s primary role being one of facilitator and regulator, with prices determined by the level of supply and demand in the market. A market economy creates level playing field for every sector, encourages creativity and reduces speculation.

Definition presented at the “Vietnam in Transition - Changing Attitudes to the Market and the State” workshop on July 23

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