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Sweeping reform opportunities in the vision of the year 2035
Updated: 3/14/2015 3:35:55 PM GMT + 7
In the message of the Prime Minister at the beginning of 2014, the issue of institutional reform which had been emphasized at different times in the last 3 decades was stressed urgently.

At the 11th National Congress, from the assessment that "economic institution, quality of labour force, infrastructure are the bottlenecks to development”, the Party determined that improvement of market economy institution with focus of creating equal competition environment and administrative reform is one of the three breakthroughs.

Recently, in order to sum up and direct the continuation of implementing the Resolution adopted at the 6th plenum of the 10th Central Committee, the Politburo had Conclusion No. 103-KL/TW dated on 29 September 2014 on summing up five years of implementation of the Resolution on improving the socialist oriented market economy institution.

Vital necessity of reform

From the angle of development and improvement of institutions,in order to implement key guidelines of the Party, the government has improved many huge, important, complex programs, requiring to speed up the progress of the programs so that the government can submit the institutional, legal reforms to the Politburo, the Secretariat, the Central Committee; submit to the National Assembly many important laws affecting business environment such as Law on enterprises, investment, land, housing, construction, bidding, customs, taxation, public investment, investment and state capital management of enterprises…

In 2015, other important laws will be submitted to the National Assembly for approval, such as Law on organization of the government, Law on organization of local governments, Law on state budget, Law on planning, Civil Law, Criminal Law, etc., making their contribution to improving legal framework for economic management.

Under the term of 2011-2016, the government, Prime Minister have set institutional reform as a central task of special attention. The urgent necessity of reforms has spread through many important policies, strongly affecting lives of the people and enterprises.

At the very beginning of the term, the government issued the Resolution No. 30c/NQ-CP dated on 8th November 2011 on the comprehensive program of State administrative reform for the period 2011-2020 with the objectives of "development, improvement of the socialist oriented market economy institution to liberate production forces, mobilize and utilize effectively all sources for the national development”.

The Prime Minister issued the Decision No. 339/QDD-TTg dated on 19th February 2013 on approving the overall scheme on restructuring economy in association with transfer of growth model towards to increase quality, effectiveness and competition capacity during 2013 - 2020, in which improving market economy institutions for economic restructuring and development is the central task.

Especially, the government has recently issued the Resolution No. 19/NQ-CP dated on 18th March 2014 on main tasks, solutions to improve business environment, enhancing national competitiveness. The common feature of the policies is the practical assessment of weaknesses in the national competitiveness, slowly improved institutions, and business environment. Those policies formed a system of consistent, synchronous, comprehensive solutions including main tasks.

First,revising, proposing amendments, supplements, improvement of the legal framework related to strategic breakthroughs. Continuing formulation and improvement the legal framework with focus of improving market economy institution, providing firm legal bases to promote economic restructuring. Strengthening quality of laws, ordinances and legislation/legal normative documents; closely controlling and ensuring the unification, consistence of legislation/legal normative documents.

Second,revising, amending, supplementing mechanisms, policies to improve the enforcement and quality of national governance to improve and enhance the quality of business environment. Keeping simplification of administrative procedures, not formulating, issuing regulations of prohibiting and limiting business rights of enterprises and individuals due to the weaknesses of management capacity and level of relevant state management organizations; not formulating and issuing regulations irrelevant to condition and actual lives of majority of population and enterprises, etc.

In terms of the implementation, the government, the Prime Minister have strongly directed by synchronously adopting many solutions, carrying out many tasks to improve the legal framework, reform administrative procedures in taxation, customs, construction licensing, land, power accession, enterprises’ establishment and dissolution, investment, social security, etc.

At the same time, assigning specific and direct tasks to ministers, heads of ministerial level agencies and government bodies, chairmen of the People’s Committees of provinces and centrally-governed cities to take responsibilities of reforming and quality of institutions in sectors, aspects and localities under their assigned state management competence.

The feasibility of institutions, policies has drawn special attention. The policy lag has been reduced remarkably in such policies as SOE management regulations, land policies, investment environment improving policies, policies of expanding rights of business freedom, etc.

The Vietnam 2035 report: a key of reform - establishing mechanisms for driving forces

In his 2014 new year’s message, the Prime Minister, Nguyen Tan Dung, stressed "It is the right time that we are in need of more driving forces to bring back the momentum of rapid growth and sustainable development. The driving forces must come from renovating institutions and strongly developing the people’s rights to mastery”.

This message showed the dialectical viewpoint of establishing, improving institutions, closely connecting institutional reform, legal system improvement to urgent requirements from such realities that it is necessary to generate driving forces for reforms in this time. This viewpoint rooted from the judgment that "the driving forces which were generated in previous reforms are no longer strong enough to promote development”. Clearly, "it is the time” of generating a prominent, competitive legal framework to provide motivations and legal corridor for economic breakthrough development.

This is also the issue in the theme "modern institution”, a part of the VN 2035 report.

Institutional reform is not an overnight task. Institutions of economic management are required to be further studied to be amended, supplemented, improved and implemented with enduring efforts of many sides. Proposed new laws, policies must form breakthrough solutions of economic management methods; opening up the bottlenecks of institutions, making the most use of reform opportunities; effectively develop inner forces of the Vietnam geo-economy; forming institutional frame of integration; highly competitive institutions compared to those of regional countries to attract investment etc.; making full advantages of important international agreements that Vietnam has negotiated, joined, such as ASEAN Economic Community (AEC), Vietnam – EU Free trade Agreement, Trans-Pacific Partnership (TPP), etc.

These are current challenges which should be dealt with in the directions and visions of Vietnam’s institutional reform towards 2035 under the theme "Modern Institutions”.

The role of institutional reforms was stressed by the author of the famous book named "Why nations fail?” with repeated words "Institutions, institution, institution” at the end of one chapter in the book. The authors also conveyed the message "Development, prosperity, harmonized, democratic, progressive society, all these can be explained by the institutional structure of each society. Therefore, to reach prosperity, institutional reform is the key”.

Obviously, in the policies mentioned above, implementation of solutions of institutional reforms clearly shows the viewpoint of improving modern institutions: Closely connecting democracy with establishing rule of law state; connecting institutional improvement with democratic expansion: setting up foundation of State governance to serve the people, enterprises with accountability.

This vision, this viewpoint generate considerable opportunities, large room for reform.

Pham Chi Cong
Department of Legislation – Office of Government

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