Abstract
This paper examines changing forms of state control in Vietnam. It argues that while reform and rapid economic growth have been associated with promotion of market activity and decline in directly controlled activity as measured by the number of SOEs (State Owned Enterprises) and the state sector's share of gross industrial output, this conceals a major reformatting of state control. Direct control over equitised SOEs has been maintained by the state holding the majority of the shares. Meanwhile complex, often inconsistently enforced and interpreted regulation ties enterprises to the state, a situation reinforced by the state's ability to facilitate (or not) access to credit, technology, market information and know-how. Perhaps even more significant is the manner in which, in much of the new economy in Vietnam, the former distinction between the public and the private has been blurred, and in many cases new hybrid forms have emerged that defy conventional classification. This reformatting of power has been accompanied by the emergence of some serious contradictions which may come to undermine the developmental effectiveness of the Vietnamese state.
Highlights
It has generally been concluded that the rapid economic growth experienced by Vietnam since about 1990 has followed from reforms which have resulted in a significant reduction of the state’s control over economic activity (Clark, 2004:92; Gainsborough, 2005:4; Vietnam Consultative Group, 2004)
It has been argued that, while in terms of such measures as gross industrial output and the number of SOEs, there has been some retreat of the Vietnamese state from control, such indicators may well give a false impression because of the development of new and more complex methods of direct and indirect control
If this is the case, how should the reformatting of state control in Vietnam be viewed? Is it a product of a rearguard action of the party-state system whose position is being increasingly compromised by the forces of the market and economic globalisation? There is no doubt that there is continuing distrust of the private and foreign sectors by many elements of the party-state system and real concern over the emergence of an ‘independent business community’ and expansion of foreign ownership
Summary
It has generally been concluded that the rapid economic growth experienced by Vietnam since about 1990 has followed from reforms which have resulted in a significant reduction of the state’s control over economic activity (Clark, 2004:92; Gainsborough, 2005:4; Vietnam Consultative Group, 2004). From 1992, interest rate and other reforms progressively removed some of the attraction to commercial capital of remaining within the SOE ‘shells’ (Fforde and Goldstone, 1995:86) This encouraged the formation of new wholly private companies closely tied to the party-state, some involving hiving off established commercial operations, but with parts of the party-state and/or its officials and functionaries retaining significant influence or even outright control. The increasing security of private operation has encouraged many parts of the party-state to outsource accounting and other activities This was the case with PetroViet Investment and Development, a wholly owned subsidiary of the state oil company PetroViet, which has become a major provider of auditing services to all sectors of the economy. There is a real question mark over the extent to which such developments are centrally planned and coordinated, rather than the result of the coincidence of separate decisions of wellconnected and well-informed parts of the party-state system and its close associates
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