Dr. Nguyen Duc Kien, Head of the Economic Advisory Group of the Prime Minister, shared with SGGP Newspaper about this matter.

Production at Thai Tuan Company in Vinh Loc Industrial Park. -- Photo: SGGP

In recent years, Grab has become a hot keyword. After many drafts, the Government issued Decree No.10/2020/ND-CP on January 17, 2020, regulating business and business conditions for ride-hailing service. However, public opinion still believes that this document has not completely solved the problems arising from the sharing economy.

Many contents in Decree No.10 can be considered being unclear about nature and purpose. Here, the nature of the problem of healthy competition is not between economic sectors, but the behavior of state management agencies towards groups of enterprises operating on different technology platforms and business models. Besides, there are also many business models similar to Grab that need to have a clearer legal framework, such as online lending. Similarly, for investment in the form of public-private partnerships (PPP), the Government needs to consolidate and complete the access framework and legal corridors for this sector, solving many current unreasonable problems.

More than the past 30 years of renovation shows that the role of the State in the market economy has been increasingly perfected in the direction of modernization, contributing significantly to achieving the development goals of the private sector. However, in many cases, the role of the State, the market, and the relationship between the State and the market still face many shortcomings because the functions of the State and the market have not been defined clearly. Specifically, the State still holds many functions that the market performs more effectively, such as capital allocation and corporate governance, while it does not pay adequate attention to the functions of construction and realization of the framework of state management, the supply of goods, and public services, and development assistance. Meanwhile, those are exactly the functions of the State.

According to Worldwide Governance Indicators, in 2019, the government effectiveness index was at a fairly low level of 53.85 points, only slightly up from the level of 53.37 points in 2017. In general, Vietnam's ranking over the past years is much lower than that of Singapore, Thailand, Malaysia, Indonesia, and Brunei. The quality of Vietnam's business environment has improved, but the ranking continuously decreased in 2018 and 2019, each year dropping by one notch. In the ASEAN, Vietnam remains in fifth place, after Singapore, Malaysia, Thailand, and Brunei.
“Vietnam make advances, but slower than other economies, it means that the country goes backward,” he said.

Indeed, the fact that enterprises can do what the law does not prohibit is a big step forward in the legal regulations of Vietnam. However, the implementation results are not as good as expected. For instance, unnecessary and unreasonable business conditions are still a major obstacle. There are only 243 conditional business lines, but there are still nearly 6,200 business conditions. Meanwhile, this field clearly shows the difference between a state governed by administrative orders and a developmental state that the country is aiming for. Obviously, there are many problems from thinking to capability and techniques of state management that need to continue to change.

Removing barriers to business is an aspect of building a developmental state. As for the second aspect - promoting innovation, he said that first and foremost, the State must overcome the specified limitations, which is to convert from management to administration, from control to companionship. Up to now, state management agencies are still extremely cumbersome and often promulgate regulations without having not clarified their nature and purpose. For example, why is it necessary to have a branch of the State Bank of Vietnam (SBV) in all localities, while the tax and customs sectors have already been merged for regional management and have still managed to fulfill their duties well? When usury takes place in rural areas, where workers are concentrated, causing frustration, where is the SBV branch? The minimum space for the office is eight square meters per person, and the office must be rented stably for two years, is it really necessary or not?  

Broadly speaking, besides the private sector, the management of State-owned enterprises also has many shortcomings that are straitjacketing managers and executives, making them not dare to make bold and creative decisions. When doing business, sometimes you win, and sometimes you lose. However, we seem to assume that State-owned enterprises must always win. That is unreasonable and is part of the important reason why it is difficult to promote innovation in State-owned enterprises.

SGGP

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