Special characteristics of socialist oriented market economy in Vietnam

Transcription

1 Special characteristics of socialist oriented market economy in Vietnam Vu Van Phuc* Developing a market economy plays an important role. For Vietnam, during the transition to socialism from a less developed economy, there is no other way but developing a socialist oriented market economy. The market economy repairs the natural, self-sufficient economy, strengthens the division of labor in society, promotes the development of sectors, generates jobs for laborers, boosts the application of scientific and technological advances to increase productivity, quality, types and quality of goods and services, enhances accumulation of concentrated production, expands economic exchanges between localities, and territories, promotes the dynamism and creativity of every laborer, and each economic unit, and creates a mechanism to allocate and utilize social resources appropriately and efficiently. 1 / 8

2 Therefore, developing a market economy is considered a lever to build socialism and an objective tool to socialize production. There is no replication of the market economy of one country in other countries. Among the criteria to distinguish one market economy from another, it is necessary to take into consideration the political, economic and social orientations that determine the development of the economy. In Vietnam, socialist orientations of the market economy include: First, the fulfillment of the objective of a Prosperous people, strong country, democracy, equity and civilization ; Second, development of the economy with different forms of ownership and economic sectors, of which the state economy plays the decisive role, and the state economy together with the collective economy serve as the firm foundation of the national economy; Third, social progresses and equity in each of the steps and development policies and distribution are made according to labor results and economic efficiency as well as capital and other resource contributions and through social welfare; Fourth, promotion of the right to mastery of the people to ensure the economic management and regulation of the socialist state under the leadership of the Communist Party; Fifth, building a market economy which integrates into regional and global market economies under different forms of multilateral and diversified relations and linkages. With these orientations, the goal of developing the socialist-oriented market economy is to create dynamism and efficiency for the economy, improve the effectiveness of available resources, increase new resources by raising the rates of saving, accumulation and investment in modernizing and restructuring the economy, and creating a high economic growth rate to raise the country out of poverty and its less developed status. 2 / 8

3 To this end, the natural characteristics of the socialist-oriented market economy in Vietnam can be defined as: First, the socialist-oriented market economy is a form of organizing the economy in its transition to socialism from a backward agricultural, less developed economy. This form of organizing the economy aims at enabling Vietnam to achieve the goal of a prosperous people, strong country, democracy, equity and civilization. Second, the socialist-oriented market economy is a multi-sector economy with the state and collective economies serving as the foundation and the state economy playing the decisive role. All economic sectors operate in line with the common orientation and legal framework of the socialist state. Thi rd, the socialist-oriented market economy, in fact, is a form of organizing an economy based on the principles and rules of the market economy and on the principles and nature of socialism. Fourth, the socialist-oriented market economy is an economic model, which is open both internally and externally. Existing in many socio-economic forms, the operation of the market mechanism is impacted by not only general market economic rules but also the special economic rules of the leading production method. Therefore, the model of market mechanism with the state management in the capitalist economy is different from that in the socialist oriented market economy as follows: First, the ownership regime. The market mechanism of the capitalist economy operates on the foundation of the private ownership of production materials, in which monopoly capital companies play a dominating role in the development of the whole economy. The market mechanism of the socialist-oriented market economy operates in an environment of diversification of ownership relations, in which the public ownership serves as the foundation of the national economy and the state economy plays the decisive role. While developing a multi-sector economy, the socialist orientation requires the consolidation and development of the state economy and the collective economy so that they can become the foundation of the economy in order to regulate and guide the development of other economic sectors. The State economy needs to be consolidated and developed in key economic areas: in security and national defense, and in essential social services, which other economic sectors are not capable of or not willing to invest in due to little or no profit. 3 / 8

4 Second, the class nature of the state and the purpose of the state management. In the market mechanism of capitalism, state intervention is of bourgeois nature and within the framework of the capitalist regime that aims at ensuring the socio-economic environment favorable for the rule of bourgeois class and the sustainability of capitalism exploitation. In the market mechanism with state management under socialist orientations, the socialist state intervention in the economy aims at protecting the legitimate interests of the entire working people and achieving the goal of a prosperous people, strong country, democracy, equity and civilization. Third, operating mechanism. The operating mechanism of the socialist-oriented market economy is the market mechanism with state management under the leadership of the Communist Party of Vietnam. This mechanism ensures the direction and regulation for the multi-sector economy to move toward socialism under the motto: The state undertakes the macro regulations, the market directs enterprises. The mechanism is reflected in basic ranges: First, the Socialist State plays the role of a central figure and regulates the macro economy. Second, the market mechanism is the central factor of the economy playing an intermediary role between the State and enterprises. Fourth, relations between economic growth, development with social equity. In the development of the capitalist market economy, social equity is raised when negative aspects of the market mechanism inflame social issues, pose risks of social explosion, or threaten the existence of capitalism. However, this problem is never and can never be solved radically in the capitalist regime. The bourgeois governments only solve social issues within the framework of capitalism considering it a tool to maintain the capitalist regime. In the socialist-oriented market economy, the state is involved in solving the relationship between economic growth and social equity. Social equity is not only the tool to develop the market economy but also a goal of a new social regime. The success of the socialist-oriented market economy is not only reflected in high growth but also in the improvement of all people s real living conditions, health care, education, the narrowing of the gaps between the rich and the poor, and the preservation of morality, tradition, cultural identity and conservation of ecological environment. 4 / 8

5 Fifth, income distribution. The success of the socialist-oriented market economy is not only reflected in the pace of economic growth, but also the improvement of people s living conditions, social issues, fairness and equality. The special characteristics of the socialist- oriented market economy is reflected in: First, determining effectiveness targets that need to be achieved such as the growth rate of GDP per capita, indexes of development of education, health care, employment, poverty reduction, culture, society, and ecological environmental protection. Second, raising the social function of the socialist state in social insurance system, income distribution policies, and policies for people with special needs (revolutionaries, war invalids, and people with disabilities ) This situation requires the socialist-oriented market economy to combine harmoniously the three following issues: 1- Combine profit with social issues to make sure that subjects of the market economy earn high profit and at the same time to create normal socio-political conditions for economic development. 2- Closely combine distribution principles of socialism and the principles of the market economy such as distribution based on the labor force, capital, talents and distribution via social welfare funds in which the principle of distribution based on the labor force play the principal role. 3- Regulating income distribution requires the State, on the one hand, to work out policies that reduce the gaps between rich and poor, ; on the other hand, to adopt policies and measures to raise the legitimate income of the rich, the poor and the entire society as a whole. However, the market economy in Vietnam is still strongly imbued with such characteristics as: F irst, the market economy in the transition period is a transitional economy. The transitional characteristic is reflected in the wide range of intertwined production types: socialist production of goods, capitalist production of goods and small-scale production of goods (many economic sectors with various forms of ownership participate in goods production). Each type of goods 5 / 8

6 production has its own particularities concerning socio-economic nature and development level, but all of them are a part of the unified national economy, and are established and dominated by a unified social market with common supply-demand relations, prices and one currency. Therefore, these types of producton both cooperate and compete with one another equally before law. They are protected by the law in term of the rights to ownership and to legitimate incomes. However, these types of goods production no longer retain its nature because they bear their transitional characteristics. Economic factors and relations in goods production of each economic sector have shown new things. For example, capitalist production of goods has state economic factors including electricity, water, infrastructure, communication and information etc... and there have appeared the economic relations with other economic sectors under the Socialist State management etc... In the transitional market economy, the socialist production of goods plays a decisive and directing role for other types of goods production. Second, the market economy is still underdeveloped because the quantity of goods is low, types of goods are monotonous, the volume of goods circulating in the market and import-export revenue is low, production costs and prices of goods are high, the quality of goods is poor, markets are small in scale and size, the competitiveness of enterprises and goods is weak in both local and overseas markets, the number of excellent business managers is limited, workers incomes are low, thus, purchasing power is limited, many types of market are at a low level including the capital, securities and labor markets,... The low level of the production originates from the low level of the production force, the small scale production of the economy, the underdeveloped work division and infrastructure, and the large proportion of manual labor and an incomplete awareness of Socialism Third, the market economy develops towards international economic integration. The faster the scientific and technological revolution develops, the higher level of socialization of the production force is, leading to the expanded regionalization and internationalization of the economy. Therefore, the development of a market economy is not only based on local conditions but also takes into consideration international economic relations, and the trend of internationalization of economic life. The market economy of each country must connect with the world market to develop. The modern scientific and technological revolution diversifies the quantity, quality and types of commodities for production and individual consumption so that every country, even the most developed one, cannot produce all types of commodities. Therefore, each country, based on its strength, must choose the most effective and competitive commodities to produce. Production of goods in Vietnam can only develop strongly if it can effectively attract and utilize foreign investment capital and apply the world s scientific advances to tap the great potential of the economy. To this end, the right path is to develop a new economy geared towards increasing exports and effectively replacing imports. Fourth, developing a market economy in combination with promoting the national cultural identity. Developing a market economy in line with an open economy is inevitable, but in that process, in addition to absorbing global cultural essences, there are risks of importing cultures that are alien to the national traditions and characteristics. To preserve a market economy filled with Vietnamese cultural identity, it is necessary to effectively undertake the state s macro management under the Party s leadership, rejecting a pragmatic lifestyle, which is dominated by money and the commercialization of all social activities, and instead honoring cultural values 6 / 8

7 and moral norms as well as eliminating backward customs and lifestyles. The quintessence of human civilization must be selectively combined with the preservation of national cultural essences, and the building of the socialist cultural factors. In Vietnam, developing a socialist-oriented market economy is aimed at meeting the following requirements: Economic growth must be closely linked to the progress of social equity, achieving the goal all interests are for the sake of the people, human liberation and human comprehensive development. High-level economic development is based on a modern production force and the public ownership of major production materials. The state economic sector plays the decisive role and together with the collective economy serves as the foundation of the national economy. Other economic sectors develop under the State management. The dynamism of the market mechanism must be connected to the State s management. It is necessary to diversify the forms of distribution with the increasing domination of distribution based on labor, continuously reform and refine the relationship between urban and rural areas, and between regions in the country to boost the overall national strength. It is important to expand international economic relations according to the principle of increasing national internal strength and turning external factors into internal ones. To develop the socialist-oriented market economy, the following solutions should be implemented: First, consistently implement the policy of a multi-sector economy. Second, expand labor division and re-distribute labor and population nationwide as well as in each locality and region towards industrialization and modernization. Third, create and develop market elements synchronously. Fourth, accelerate the scientific and technological revolution to industrialize and modernize the 7 / 8

8 economy. Fifth, maintain political stability, fine-tune the legal framework, and renovate financial, monetary and pricing policies. Sixth, train high quality economic managers and business people to meet the demands of the socialist-oriented market economy. Seventh, expand external economic relations to develop the market economy. /. *Associate Professor Doctor, Editor in Chief of the Communist Review 8 / 8