The universal features of ownership in the modern market economy and recommendations to improve the ownership relations in Vietnam*

Dr. Assoc. Prof. Dang Thi Lan – University of Social Sciences and Humanities - Vietnam National University, Hanoi.

Dr. Assoc. Prof. Pham Thai Quoc – Institute of World Economics and Politics - Vietnam Academy of Social Sciences.

Abstract: After 30 years of renovation, development and international integration, Vietnam's economy seems to be more freedom in institutions - with an important platform of ownership - to be able to develop towards becoming a market and modern economy. To get more space for development, Vietnam is required breakthroughs in reforms related to property regime. The market economy is based on a modern platform of private property, respect private property - private property prevails, while Vietnam advocated developing market economy-oriented society (socialism). After 3 years of research and fieldwork at home and abroad, the research team has synthesized materials, data, initially propose some statements.

This paper published some research results through a detailed analysis of ownership issues from the point of Marxist Leninism theory - to the theory and practice of ownership in the market modern economy in the world, pointing out the universal problems related to the selection, adjustment and completion of the ownership in the modern markets economy, also pointing out the difference of property regime in Vietnam in its comparison to the world, which proposed a number of recommendations in order to improve property relations in the Vietnam.

Keyword: Modern markets economy, Vietnam, ownership, modern economy, market economy-oriented society (socialism).

*This research was funded by The National Foundation for Science and Technology Development (NAFOSTED) in the Research Code No. I1.2-2011.14


The late 1980s and early 1990s, the crisis of state socialism took place and centrally planned economy model countries in the world faced a stalemate. Some socialist countries began to shift to the market economy. However, the market economy is an attribute, which is characterized by capitalism. In the meantime, it is thought that is characteristic of capitalism have certainly not consistent with a socialist state. Therefore, from the beginning of the 1990s Vietnam advocated building the market economy under socialist orientation i.e. socialist-oriented market economy, while the Chinese’s allege was to build the state socialism with Chinese’s colourness.

Twenty years later, in the early 2010s many developed countries did not recognize Vietnam as market economy including the United States. Why? To explain this question from the perspective of ownership, the research team, including Assoc. Dr. Vo Dai Luoc - former member of the Prime Minister’s Research Commission, Prof. Dr. Dang Hung Vo - former Deputy Minister of Natural Resources and Environment (MONRE), has conducted their research on this issue for 3 years (2012-2015).

The objectives of research aims at reviewing; summarizing and pointing out the problems that are universal in the modern market economy in the world, comparing its universality to the reality in Vietnam as to present distinctive features in its comparison to the world, from which proposes the recommendations for improvement ownership relations in Vietnam.

Besides Vietnam, some countries are selected for researching are: 1/ The developed capitalist countries, representing the UK, Germany, USA, Japan, Sweden. 2/ The developing economies such as China, India, Russia, South Africa. To understand the real situation, the research team conducted a site-survey in some countries such as Hong Kong, Beijing, Guangdong (China) and Ho Chi Minh City, Phu Quoc, Da Nang, Quang Ninh (Vietnam). In China, the research team conducted the exchange and interviewed many Chinese experts [13]. In Vietnam, besides discussion with many experts, the team also conducted 05 surveys in Danang, Mong Cai (Quang Ninh), Ho Chi Minh City, Phu Quoc (Kien Giang) and Hanoi.

The reality of 30 years of renovation in Vietnam with a large part of innovation, ownership regime reform, eliminating the monopoly of public property regime, reform of public property regime; gradually recognize and promote the role of the private property regime under which diversificated forms of ownership in the economy, socialist-oriented market economy. State economic sectors associated with state ownership are now exposed some weaknesses, not reflect as the foundation and mainstay of the national economy. Proprietary mechanisms, especially in the possession of the resources of the state-owned enterprises (SOEs) have not been eliminated in many areas of manufacturing, trading, while investment efficiency and productivity are low. Many of the state-owned assets are wasted or lost during the process of management . Although, the SOEs’ reform is ongoing, this also faces many unsolved problems so far both theoretically and practically such as: Which areas should be equitized? Which areas should be monopolized by state? How to handle the state assets? How to evaluate the price? How to improve the efficiency of retained SOEs? ...

In order to interprete of these questions, this paper publishes some research results through a detailed analysis and indicates the universal issues related to selection, adjustment and completion of ownership form in the modern markets economy. Moreover, the paper also aims at pointing out the difference of property regime in Vietnam and the world, which proposes a number of recommendations to improve the ownership regime of Vietnam.

1. Some theoretical issues about ownership in the modern market economy

The debate over property appeared from very early in the history of human civilization. From the period of ancient chattel slavery system to the development of capitalism or in the socio-economic context with so much social injustice and exploitation, people want to find out the principles of an ideal private ownership system and its moral values.

Ancient philosopher Plato once said that we should have collective ownership to promote the efforts of the community because of common interests and to avoid divisions in society [10]. In contrast, Aristotle supported private ownership. He enhanced the relationship between private property and freedom, because private property helps to create a human “freedom” and become a real citizen; private ownership promote such qualities of cautionness and responsibility; and private property is an important condition for the full enjoyment of individual’s benefits from their labor [1].

During the Enlightenment, when capitalism made the treatise against kingship, thinkers began to pay more attention to explaining the formation of the ownership and management of personal property; and opposed the accumulated assets of the feudal society by exploiting their people. Thomas Hobbes and David Hume said that there was nothing called “mine” and “his” in a natural way. According to Hume, the property was the result of a contract between the members of society to respect the possession and enjoyment of the property that a person may have due to their luck or labour [6].

John Locke (1632 - 1704) gave an opinion on the law of first possessor. According to Locke, the one who were master of his body, could own the fruits of their labor force. Labour outcomes were expressed as a result of labour force combined with the tools and resources they did not own. According to Locke, at least they also have rights over those who have not put effort into to obtain the same results. To exercise the third right, i.e. to punish those who did not make two rights was truly a challenge for every individual. Locke said that individuals needed to achieve an agreement that meant to have commitments with other parties, to cede the right to punish those who did not comply with the first two rights to a new entity, which was the state, but still retained the rights to two of his liberty and personal property.

Locke's theory shows the relationship between the nature of ownership and the state as well as the relationship between the individual and the state. Ownership is a natural right and the state capital was formed through a “social contract” with the purpose of protecting the property of individuals. No one has the right to infringe upon the interests of others: when the state breaks the social contract with the people and become a robbery of the people, the people have the right to remove contract and create another country.

Same as Locke, Frédéric Bastriat had a famous saying: “Life, liberty, and property do not exist because humans have created laws. Conversely, the fact is that life, liberty and property have existed previously and that for men to create law” [3].

In the discussion about the role of the market, Adam Smith argued that a prosperous society and an economy of capitalism (capitalist) develop that require three important elements: the rule of law, private property and free to contract [11]. This is also the basic institutions of the market economic freedoms of capitalism. According to Smith, the government is set up to ensure the property of citizens; and he acknowledged the fact that this may lead the government to help protect the interests of the rich before the poor’s demands and interests of the property owners over the demands of the people with no property. Supporting Smith’s theory of private property, Charles Comte opined that the state’s intervention in the ownership of the property for centuries only brought negative consequences for justice and economic productivity; however he added that property could only be a worthy cause if it was not used to harm others [2].

According G.W.F. Hegel, the property would enable individuals to develop themselves; and create real personal freedom because without property, individual freedom is only an ideal [5]. Later, T. H. Green also shared that ownership contributed to the development of ethics, the will and sense of responsibility [4]. Both of them agreed that the achievement of the right to private property was only one step to form social responsibility of individuals as assets gives people the freedom to chose reasonably and more responsibility for common good [17].

By the mid-nineteenth century, the industrial revolution changed the British, French and other capitalist countries. The concept of property has been extended beyond the land including scarce goods in general.

Bentham (1791) clearly indicated the relationship between the property and the state; he said that the state has created ownership. The State had benefits and private purposes and these benefits outweigh the benefits of individual. The state also has the right to put their interests above the interests of every citizen as their freedom and property. Bentham opined that the legal system on property ownership is “the noblest triumph of humanity”.

After Bentham, John Stuart Mill (1848) has splited between the principles in the process of production and distribution. He viewed that the principles of production have scientific and little changeable characters, while the distribution of productions is the decision of the people and changed by the prescribed man-made principles. Science, not property rights is fundamental to the production process. Mill said that ownership of the means of production was not a privilege that was social responsibility. The capitalists and landowners are forced to use their assets to meet the needs of consumers; otherwise they will be eliminated by the market. John Stuart Mill was one of the first who opined that people would change and public ownership would replace private property.

According to the Marxist perspective, ownership is primarily social relations between people in the possession of the natural and human-generated wealth. Ownership is the conditions for manufacturing in the society; no one can carry out manufacturing without owning any public means of production. Social production is the basis of existence and development of human society. Ownership is the premise of wealth creation and benefits for owners. Therefore, when discussing on socialist revolution and socialist construction, the Marxists always place ownership on the top position as it is extremely important both economically and politically. Ownership is the basis of political and social regime.

The ownership relations keep changing and no ownership exists permanently. Marx and Ph. Angel generalized the process and interchangeable forms of ownership in history. The first form of ownership is tribal ownership, the second is communal ownership and state ownership, the third is feudal ownership or class ownership and on the basis of the gradual disintegration of new feudalism there emerged and developed the bourgeois property relations. Marx also pointed out decisive objective basis of the existence of a certain form of ownership that is the development of productive forces. The movement and development of property relations is a natural historical process. A social pattern - with a certain form of ownership disappears, a new social form with a new form of ownership would emerges only in certain conditions that is beyond the control of human subjectivity. The cause of the transformation that is the development of new productive forces requires new ownership relations accordingly. Angel wrote that “any change of social system, any modifications in terms of ownership relations are also the inevitable result of the creation of new productive forces, no longer in accordance with the old ownership relationship anymore” [7, С. 467]. Marx also talked about the ongoing transformation of property relations from low to high: “Ancient ownership relations” was destroyed by “feudal ownership relations”, and feudal ownership relations were destroyed by “bourgeois ownership relations”. Thus, history has criticized the ownership relations” [7, С. 41].

The classic Marxists are of the view that the regime of private property of capitalism is the cause of the oppression and exploitation and injustice, because the forces of production are in the hands of a few capitalists, while the masses is increasingly becoming proletarians. There comes a time thanks to the development of modern industry, the productive forces developed that makes it possible to produce enough products for everyone, and makes private property regimes become shackles preventing the development of the productive forces, the bourgeois private property regime will be replaced by public ownership regime.

2. Some universal issues related to selection, adjustment and improvement of the ownership in the modern market economy

The market mechanism is a realistic economic mechanism that firmly established in the history of the world economic development. Though, it is not a perfect mechanism, so far it has proven to be a mechanism for allocating resources and the best mechanism for economic development.

The market economy is an economy with multi-ownership regime, in which the private sector plays an important role. In the market economy, private economy, private ownership absolutely dominates that compared to the vast ocean and other economic form is seen only as the rare and meager islands.

A notable difference between the modern market economy and old-style market economy is the modern market economy with the platform of the market mechanism, self-regulating markets along with the steering and controlling mechanism that are planned carefully and targeted the right objects of the Government, while old-style market economy depends entirely on the regulation of market

In the modern market economy, forms of ownership has been established, transformed in the process of mobilization, development of production and affected by many factors. However, the universality problem of the process are:

1) Market economy closely associated with private ownership. As we mention to a

market economy, we cannot help but acknowledge the great role of the private sector, recognize the common self-existence, domination of the private sector. Private sector closely associated with the formation and ripens of the market economy; create vitality for the market mechanism.

2) The developed capitalist countries developed their market economies, from classical market economy to modern the market economy. In the modern market economy, the flexible adjustment of state has repaired the “market imperfections” such as anarchic situation, overproduction, workers-masters conflicts, impoverishment ... as it used to be.

In the modern market economy, the role state is indispensable, there should have state-owned. However, we should not forget the principle of the market economy is “small government, big society”. Despite the intervention, the adjustment mechanisms of the state, but the market is still the most influential factor determining the production and business activities as well as consumer behavior.

3) The market and the state are both mechanism for resource allocation that have its own strengths and weaknesses; they are complementary rather than mutually exclusive. The state should not take charge of the market in the area where it can function well. State only repair market failure and not do more than that. The goals of state intervention is moving owards ensuring the effectiveness and stability of economic performance as well as more equitable distribution.

4) Private ownership, private business associated with objective existence of personal or of the family interests. As long as the family economy survive, the private one still exist. The private sectors, themselves also develope from small to big, from weak to strong. Development of market economy also means to nurture and build the platforms (resources, legal ...) that enabling the private sector to grow.

5) Privatization accompanied by liberalization is a popular trend in the market economy in the world. Privatization helps increase economic efficiency, reduces the burden on the state and creates economic vitality. However, privatization requires the strict legal regulations, otherwise will cause great loss to society without giving effectiveness to the economy.

6) Ownership relation is variable according to the development of productive forces and it is the innovation of science and technology that has expanded property objects. Monotonous or diversity of ownership mobilizes with the change of environment of the country and the world, but always with the presence of state ownership and private ownership.

7) In the market economy, private property is illustrated as the vast ocean (the majority), while state ownership as the small island (minorities). Market mechanisms only actively and effectively operated in such conditions.

8) The form of ownership is only a means to stabilize and develop the production rather than the need to reach the goals of social production.

9) The diversification of ownership as it has been shown that the more economy develops, the richer and more diverse forms of ownership are. Diversification of ownership is not only seen with the ownership of production materials, ownership of enterprises, but ownership in the property (land) and resource ... In the first phase of the development of market economy, the common forms is a private company, limited liability company, SOEs ... with the clear separation. To the phrase of modern market economy, in addition to the private companies and the SOEs, there are more forms of mixed ownership (joint stock Company), joint ventures with foreign countries, transnational companies, Multinational Corporation ... with the coexistence multiple forms of ownership intertwined, integrated into each other. In developing countries and countries with transitional economies, the diverse form of ownership is increasing. The mixed integrated forms of ownership help make the most of these advantages by eliminating the weaknesses of each type of property. State ownership has advantages when you need to gather, mobilize resources while private ownership is favoured with its responsiveness, flexibility and efficiency. Owners of the state - in principle - are concern about in public interest while private owners pay much attention to efficiency and profit. Perhaps, this makes public-private partnership agreement becomes favourable as it promote the advantages of each party, at the same time partly overcome the market failure and impairment of Government (or Government Failure).

10) The scale of ownership changes from small scale to large one. There was a time, many countries appreciated the efficiency and promoted the slogan “small is beautiful”. However, due to the development of production and accumulation of wealth, as well as the required investment for the development and application of high technology, the scale of economic activity is increasing. Since then, the scale of ownership also constantly increases. Today, the ownership scale of households and enterprises are constantly increasing; the transnational company owns thousands of billions of dollars of capital. The increase in the scale of ownership (through acquisition or merger ...) not by the will and aspirations of the people, but objectively, because the development of productive forces.

The scale of state ownership changes in order to allow the government to better perform its functions. In developed countries, after the Second World War (for the needs of reconstruction, job creation ...), state ownership comprised of increasing proportion in the economy and to the 1970s of the 20th century, this proportion slowly reduced. However, due to the economic crisis (global, regional) in some countries, the scale of state ownership has increased, and then decreased after the economy recovery.

11) Equitisation with the internal content is to form the mixed ownership trend that is strongly influenced by the market mechanism. The ways of ownership transformation enables centralized capital, expand the scale of production - business, and quickly apply scientific – technological advances... thereby enhance the competitiveness. The development of the stock market have very important role to play in form of share ownership and the economy of the country.

Share ownership is also a modern and prioritized form of ownership because it has many advantages, in conditions of strict legal regulations, it moves towards openness and transparency under supervision of several parties. Enterprises with 100% state capital, by a representative of the management of state property rights are not clear, sometimes considered a “derelict”, when converted into shareholding enterprises, it becomes to “deliberate”, with clear property rights. Therefore, the enterprise shares (whether different ownership structure) is a common form of the modern market economy.

12) The transitional trend from attaching much importance to ownership of tangible assets to the ownership of intangible assets. Knowledge is increasingly becoming the input factors, important asset that decide manufacturing process. The goal of the economic activity in the market economy is the value and profit. Therefore, ownership of tangible assets gradually no longer is the goal, but only a means. Moreover, in the period of intelletual economy development (related to property information, intelligence, technology, know-how, brand ...), to achieve the objective of value, not necessarily owned means of production. Valued ownership is not based on the value of ownership in kind [8] (means of production) that could still benefit (buying stocks, bonds, buy brand ...). Therefore, not only in countries with the the modern market economy but countries with transitional economy, the ownership of form of these values is increasing.

3. Differences in institutional ownership of Vietnam compared to the modern market economies in the world

1) First of all, the development perspective of Vietnam is still inadequate to the trend of modernization and international integration. Although, Vietnam has now quite extensively integrated into the global economy, the development perspective is different. In Vietnam, the private property was not attached with importance and precisely understood. In fact, private ownership of land is not acknowledged. The enforcement of intellectual property rights is not popular. Vietnam's economy still relies heavily on the state-based economy that is still regarded as a key and land is regarded as public ownership ... While, no modern market economy in the world considered state based economic is the mainstream or land owned by the whole people. In some socialist countries (such as China), they also do not consider nationalization is the mainstream, but nationalization is basic, forms of ownership and develop together. About the role of nationalization, China does not attach the importance to the proportion nationalization accounted for much and only emphasizes on the role of state control of key sectors (as those related to security, such as the military industry, the material supply industry, the basic fuel, electricity, water ...). In the structure of the ownership regime of Vietnam, the proportion of state ownership is too large. The part of state-owned enterprises accounts for 28% of GDP, if including the state-owned commercial banks, the proportion this is 34% of GDP, while in the modern market economies, the proportion is just under 10%. In Vietnam, the government wants to use SOEs as macro regulatory tools (ex. price controls), leads to the false market signals, different from the modern market economy in its applying the fiscal policy, monetary policy ... as macro regulatory tools. The view on state-controlled economy is dominant regards land as public ownership that have dominated institutional system of Vietnam, then the preferential policies for SOEs, do not really attach the importance to private sector.

2) The modern market economies in the world are associated with private ownership. In all modern market economies, there is common existence, dominated by the private sector. While the modern market economy considers private property as the foundation, the private ownership does not have that role in Vietnam. As in many other market economies, there is the presence of state ownership and private ownership in Vietnam. However, in modern market economy, private ownership dominates and illustrated as the vast ocean, the state ownership is minority – illustrated as the small island. In Vietnam, state-owned share is still large. Because of this, it is suggested that there exists in Vietnam, “a two-tier institutions” under which the big corporations of the State - is still strongly marked by the “give and take” mechanism in its operation, while the joint private companies basically follow the market mechanism. This makes the market economy lackluster, the operation of market mechanism faces with difficulties and inefficient.

Vietnam has recognized the market economy, however, is not really to favour the role of private ownership, the private sector, as well as no effective enforcement mechanisms to protect private property rights. Therefore, the allocation of resources in Vietnam is still governed by non-market forces. In the Drafted Document of Political Report of the VII th Congress Party (dated 14.02.2015), Section IV2: Continue to improve institutional ownership, with 8 points, the restructuring of SOEs set at point No. 3, Economic collective / cooperative are discussed at the 4th point, and the private sector discussed in the 6th point, just before the FDI sector. Also in this document, when discussing the socialist-oriented market economy, firstly has affirmed the leading role of the state economy, and then mentioned the private sector that considered as an important driving force [12].

In fact, in 2013, the private economy in Vietnam constituted 10.93% of GDP, much lower than the 19.55% in the area of foreign investment [14, С. 70]. In the survey “Changing Attitudes toward Market and State 2014” (CAMS 2014) [16] prepared by VCCI (2011 and 2014) has shows that only 13% of the offices of Central Party Vietnam agrees to consider basically a market economy. Meanwhile, in 2014, up to 54% of the Embassy of foreign and international organizations in Vietnam agree with the idea that Vietnam's economy today is basically the state economy [16]. However, the assessment of Vietnamese people on the actual conversion to a market economy also showed no significant and clear perception differences in the nature of the state or the market of economy. The survey showed that for every five people saying that Vietnam's economy is basically a market economy, four others believe that Vietnam is basically a state economy. This result shows that the state economy and the market economy are still co-existing and not clearly separated.

3) Vietnam has recognized the market economy but no real market mechanism by the private owner, the private sector is not common, the real power is not in the majority. Furthermore, the market economy in Vietnam the socialist-oriented market economy, and the world‘s modern market economy has no political orientation.

4) Privatization of SOEs is a popular trend in the world’s modern market economy. Privatization helps increase economic efficiency, reduce the burden on the state and create economic vitality. In Vietnam, the term privatization has not been accepted. Meanwhile equitisation process has been slow. Therefore, the state of low efficiency, embezzlement, waste and loss of state assets has not been fully resolved.

5) In the market economy, modern forms of ownership is rich and diverse. Diversification in ownership is not only seen for all kinds of means of production, with the production business enterprise that saw both in owned houses, land and resource ownership ... In Vietnam, possession land, natural resources, forests, seas, islands ... is still completely owned by the state.

6) In addition to many small and medium size enterprises, in most modern market economies, there are many corporations, enterprises with large scale of ownership, such as TNCs (Transnational corporation), MNC (Multinational corporation). In the context of international integration, large scale of ownership creates owns many advantages, especially competitiveness. In Vietnam, partly due to the development of productive forces remains limited, and partly because the private sector is still young, so the big corporations of Vietnam is small and weak. The bussiness of some large private corporations in recent are more relevant to the real estate (being driven by unhealthy, risky practices) and less related to technological innovation, or technological breakthroughs (lack of a solid foundation). This is one of the distinction features.

Private economic also develops from small to large, from weak to strong. If we do not start immediately favoring the private economy, strengthening and improving the legal system for the business activities of the private sector, from which we can help built many private corporations develop, Vietnam will face many difficulties in the integration and competitiveness on the international market.

7) The modern market economy in the world has seriously favoured the intangible property, while in Vietnam we still do not attach the importance on tangible property (property in kind). Perhaps, it is also because the market economy in Vietnam more retarded. So, there are many forms of ownership such as property value information, management know-how, trademarks, copyright, all kinds valuable papers ... is still uncommon in Vietnam.

The above differences in institutional ownership of Vietnam in its comparison to the market economy in the world are also the remaining issues relating to the ownership of Vietnam. It is also due to these main differences that make Vietnam market economy distorted, reduce the national competitive advantage. Moreover, this creates risky of Vietnam's economy that continue lagging behind the region and the world. Thus, the renovation career and improvement of ownership system in Vietnam have to overcome these limitations and achieve competitiveness on par with other modern market economies.

4. Some recommendations to improve ownership relations in Vietnam

1) Development of the market economy is the right orientation. We can not continue to integrate and develop without the development of a market economy because it is the trend that most countries in the world to follow. Vietnam does not currently developed spontaneous market economy but develop a modern market economy, international integration in which the state actively and flexibly overcome the spontaneity, the downside of the market .

The market economy is the product of mankind development. Latecomer countries including Vietnam should apply market economy and use the tools in the market economy to the dynamic of the economy. It is necessary to recognize multi-ownership, in which different forms of ownership coexist, both cooperation and healthy competition with each other, and ownership is seen as a tool to promote economic development. Once again, it is confirmed that the ownership is only a means, not the goal of social production.

2) We need to clarify what is the “socialist-oriented market economy”. It should be understood as: (1) economic development, implement industrialization and shorten modernization. (2) Develop the economy in which the Communist Party plays a role of leadership, implement the target for the rich people, strong country, social justice, democracy and civilization. (3). Mounting economic reforms to democratize social life. (4) Respect for community’s benefits and social welfare, overcome the “market imperfections”, ensuring economic sustainability. (5) Every business regardless of form of ownership, it has strictly complied with the law, have made great contributions to the central and local budget as well, create more jobs, improve incomes for workers, contribute to improving social welfare ... should be considered as socialist-oriented market economy [9].

3) It cannot be said that the state ownership is better than private ownership or vice versa. To lead the economy towards the modern market, Vietnam's economy should maintain multi-ownership regimes in which the private sector is dominant and popular; State have the role to inspect and adjust to minimize the defects of economic market but state economy do not overwhelm the private sector and other types of ownership.

Private property area is the foundation of the economy. It should be encouraged to develop and protect the necessary rights. Once, the private ownership has neither been enhanced nor admitted the privatization and once the private economy is not overwhelmingly dominate, the market economy in Vietnam is distorted and the formation of the market institutions is still difficult then the orientation towards a modern market economy will be a big issue.

Share ownership is common ownership and advanced one. It is needed to create the necessary conditions for the development of own shares.

4) We need to affirm the important role of private ownership, of the private sector as well as the contribution of the Vietnamese private sector now and then, from which we have more open look, more friendly to the private sector. As long as the family exists, the private economy exists and should be seriously paid attention to. Private economy can only promote the role and has made major contributions to economic development in the context of an institutionalized existence of freedom, openness, and respect for the entities involved in the production business.

5) The breakthrough in the theory of ownership can be seen in perspective of the private economy. If we want a breakthrough in the theory of ownership, we must recognize the role of the private sector practically as in many countries in the world as well as in Vietnam. In Vietnam, we should implement the privatization and should not avoid the privatization because every country in the whole world has been doing this.

6) Corresponding to enhance the role of the private economy, we need to narrow the state sector to below 15% of GDP [15] to increase efficiency for the economy, curb wastage, while also reduce the corruption.

7) Criticizing the view that, the state economic sector, corporations, state-owned enterprises are used as tools or the "iron fist" of the State. The state should use the law, the policy levers as a tool rather than using the SOEs as a tool, if it is only used as a temporary solution and temporary application. As this will probably be a burden, to offset large losses due to inefficient investment.

8) There should expand the programs on public-private partnership (PPP). We should mobilize the representatives of large private corporations along with the state to define the program and plans for socio-economic development. The private sector should be involved with the state in the strategic planning of national development.

9) We should establish fair rules for all types of ownership engaging in economic activities. Law must be clearly defined the role, position and rights of the private sector as a legal basis for private sector’s operation.

10) Land, water, minerals and other natural resources are owned by the state. However, the utilization of this resource has not brought the expected high efficiency. With most of the modern market economy, these resources are all multi-ownership and not entirely state owned. It is needed to diversify land tenure regimes and other natural resources as soon as possible. It is the diversification of ownership that help use land and resources more effectively.

11) Together with economic reforms, it is neccessary to concern about need to respect democracy. The modern market economy is mainly found in democratic countries. Vietnam is developing the market economy and towards a modern market economy that can not ignore the issue of democracy. In the modern market economy, democratic elements, economic institutions and progress are very closely connected.

12) The phrase "economic component" should be deleted from the documents of the Party, the Government and the State. Such wording creates discrimination, or imply discrimination between types of state-owned and non-state ownership. The phrase "economic component" should be replaced with the phrase "property forms" or "the different types of ownership."


Innovation in Vietnam has experienced over the last 30 years with lots of changes in the direction of progress taking place in this period. The market economic development and promotion of international integration are two important motives that have created new life for Vietnam's economy today. The modern market economies in world are quite liberal institutions and have broad space for development. For Vietnam's economy to grow, towards a modern market economy, it is essential to strengthen reforms relating to property as we mentioned above. We also strongly believe that with the efforts of the government and of every citizen, Vietnam will become the modern market economy, integration and development in the near future.


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  13. The research team had discussions and interviews with experts in: Hong Kong Polytechnic University - The Hong Kong Polytechnic University, (Kowloon, Hong Kong); CIMC Group headquarter at Shenzhen, Guangdong, China (China International Marine Containers Group, Shekow Industrial Zone, Shenzhen, Guang Dong, China); Institute of World Economic and Politics - IWEP, Chinese Academy of Social Sciences - CASS, Beijing, China); National Institute of Strategic and International (NIIC - CASS); Institute of Economics, Shanghai Academy of Social Sciences. Shanghai, China.
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  15. Vo Dai Luoc. Continue renewing ownership regime in the Socialist-oriented market economy in Vietnam. Journal of Economic Issues and Political World No. 3/2015.
  16. Workshop: Changing Attitudes toward Market and State - CAMS 2014 (VCCI, Hanoi 14/11/2014).

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