return icon Vietnamnet.vn

Should Vietnam take drastic measures to eliminate monopolies?

VietNamNet Bridge - The telecommunication fee in Vietnam has been decreasing sharply thanks to the policy on eliminating the monopoly in the telecom sector. However, monopolies still exist in other business fields.
VietNamNet Bridge - The telecommunication fee in Vietnam has been decreasing sharply thanks to the policy on eliminating the monopoly in the telecom sector. However, monopolies still exist in other business fields.

{keywords}

Prof Michael Woods, an international consultancy expert, recently spoke about a big automobile manufacturer in Australia which could not survive competition with imported cars.

The Australian government plans to save the manufacturer in an effort to maintain laborers' jobs with the state budget’s money. 

However, the country’s national competition council asked the government to let the manufacturer go bankrupt. Analysts commented that this may not happen in Vietnam because of the differences in views. 

The difference can be seen in the policy on car imports. The Ministry of Industry and Trade, reasoning that domestic production protection and the task of easing the trade deficit, released Circular 20 five years ago, stipulating that car importers must be authorized by manufacturers.

As a result, 200 businesses had to leave the market, because foreign manufacturers only authorized a few Vietnamese companies to import cars.

VCCI has been repeatedly calling on to abolish the circular, emphasizing that the legal document is not in line with the spirit of the competition laws.

The telecommunication fee in Vietnam has been decreasing sharply thanks to the policy on eliminating the monopoly in the telecom sector. However, monopolies still exist in other business fields.
“The circular sets discriminatory treatment on different businesses (authorized and unauthorized), thus indirectly restricting the number of suppliers,” it stated. With the regulation, customers can only buy goods from certain suppliers, which is a competition restriction.

Director of the Central Institute of Economic Management (CIEM) Nguyen Dinh Cung cited a series of legal documents that show ‘anti-competition’.

Transport firms, for example, must have 20 vehicle units at least to provide transport services in central cities and provinces and 10 vehicle units at least in other localities. In the past, they just needed to have one vehicle to join the market.

“They (the policymakers) argue that the requirement on high capacity will help encourage large production, thus reducing prices and benefiting consumers. However, this is quite illogical in competition,” Cung said.

Cung commented that Vietnamese both like and hate the market economy, and are hesitant to apply market economy rules. 

Vietnamese, for example, still prefer a subsidy for electricity prices. They don’t want the market rules because they fear the prices will be higher. This do not realize that it is the market mechanism, not a monopoly, that will bring long-term benefits.

That is the reason why reform in the power sector has been going slowly.

‘Fear of competition’ is one of the reasons behind Vietnam’s low position in WEF’s (World Economic Forum) ranking in competition. Vietnam ranks 71st among 140 economies. 


Luong Bang

MORE NEWS

The best September photos on VietNamNet

Hot air balloons with the Vietnamese national flag of 1,800m2 on the banks of the Saigon River, Typhoon Noru making landfall in Quang Nam Province, the roofs of many houses being blown away...

BSR to expand Dung Quat Oil Refinery

The Ministry of Industry and Trade (MOIT) has asked Binh Son Refining and Petrochemical JSC (BSR) to clarify some issues related to its project on expanding Dung Quat Oil Refinery.

Dutch conductor to lead concert at Opera House

Conductor Leon Bosch from the Netherlands will lead a concert featuring masterpieces by European composers at the HCM City Opera House on Saturday, October 8.

‘578’ to represent Vietnam at Oscars

An action film starring Miss Universe Vietnam 2018, H'hen Niê, 578: Phát Đạn Của Kẻ Điên (578: Magnum), has been selected as Vietnamese representative at the 95th Oscars, 2023.

USD surges to VND24,000, US$1.7 billion withdrawn from circulation

The State Bank of Vietnam (SBV) withdrew nearly VND41 trillion ($1.7 billion) through open market operations as the US dollar rose to over VND24,000 on September 26-30, 2022.

HCM City to build a series of new traffic projects

HCM City is speeding up procedures to start the construction of key traffic works at gateways by the end of the year, according to HCM City's Department of Transport.

Burning garbage in Hanoi threatens residents' health, property

There have been consecutive fires caused by people's poor awareness, who were burning garbage and straw in residential areas, causing fires recently in Hanoi.

New cargo airline still waiting for license

After the Prime Minister agrees on the establishment of IPP Air Cargo, the Ministry of Transport (MOT) will implement procedures to grant a license to the air carrier, according to MOT Deputy Minister Le Dinh Tho.

Master plan for Mekong Delta focuses on infrastructure development

The Master Plan for the Mekong Delta designed for 2021-2030, with a vision to 2050, is focused on infrastructure development.

Current monetary policy quite suitable

Many people are concerned whether the country will face a tighter monetary policy and higher exchange and interest rates in the near future.

Danang, a wedding destination for India’s billionaires

Could Danang be the wedding destination of choice for Indian billionaires? It certainly has the right hotels and quality wedding infrastructure for the purpose, an Indian tourism company representative said.

Big shortage of human resources for artificial intelligence

Vietnam is facing a big shortage of human resources for artificial intelligence.

VN to improve science and technology market to reduce reliance on imports

Vietnam plans to focus on improving the science and technology market with the establishment of three trading platforms in order to reduce reliance on imports, Minister of Science and Technology Huynh Thanh Dat has said.

Vietnam may not reach goal of 5 million int’l visitors in 2022

Vietnam’s tourism industry aims to serve 60 million domestic tourists in 2022. By the end of July, the figure was already over 71 million visitors.

Vietnam sets course for zero carbon shipping by 2030

The Ministry of Transport has recently issued a plan with supportive measures for vessel owners to develop container ships with zero carbon emissions by 2030.
back_to_top