Three economic components

The transition economy is divided into three components: public economy, private economy and mixed economy:

The public economic sector includes state-owned enterprises which hold a key position and key role in the economy. The subject of this economic sector is the State (authorized by the people). The State, through the Committee for Management of State Capital at Enterprises, to invest capital (both in cash and in kind) in state-owned enterprises (SOEs) through credit contracts.

SOE leaders are assigned the right to manage and use capital effectively according to the market mechanism. SOEs focus on development in key and essential sectors and fields; national defense and security areas; the areas in which enterprises of other economic sectors do not invest.

Assoc. Prof. Dr. Vu Van Phuc

SOEs operate under the market mechanism, taking economic efficiency as the main evaluation criterion, being self-control, self-responsibility and fairly competing with enterprises of other economic sectors in accordance with the law, ensuring publicity, transparency and accountability of SOEs.

The State does not interfere in the operations of SOEs, but the State adopts economic contracts to order SOEs to produce goods that play an important role in the livelihoods of the nation, including military and defense products.

The State only plays the role of "conductor", "midwife", macro-manager of the economy, not interfering in production and business activities of enterprises, including SOEs. SOEs are responsible for their own production - business results.

It is a must to restructure, innovate and improve the quality, efficiency and competitiveness of SOEs on the basis of modern technology, innovation capacity, and corporate governance according to international advanced standards, truly operating under the market mechanism in order to mobilize, allocate and use effectively social resources, and to preserve and develop state capital in SOEs.

The private economic sector is an important driving force of the economy. The subjects of this economic sector are private owners such as: individual business households, smallholder households, private owners, capitalists, capitalist corporations ... with corresponding business forms as production and business households (farmer households, handicraft households, service business households...), farm owners, private enterprises, capitalist private enterprises (domestic and foreign capitalists), and capitalist groups.

"Improving mechanisms and policies to encourage and facilitate the strong development of the private economy in almost all economic sectors and fields ...". Improving institution and creating favorable conditions for the development of the private economic sector to turn this sector into an important driving force of the economy. Promoting the formation and development of strong private economic groups with modern technology and advanced governance capacity of the world.

Completing policies to support the development of small and medium enterprises. Nowadays, the division of labor has developed according to product details, so not only big enterprises can apply advanced and modern technology. At the same time, digital technology, the Internet, electronic computers, robots, artificial intelligence ... can be connected to form cooperation on a large scale in product manufacturing, without the need to focus on a large number of workers in one location.

The mixed economic sector (part of which is state capitalism as V.I. Lenin named) includes companies, businesses, cooperatives, and economic organizations formed on the basis of linking different owners: between public economic actors and domestic private economic entities; between public economic entities and foreign private economic entities; between domestic private economic entities; between domestic private economic entities and foreign private economic entities ...

The mixed economic sector is to promote the development of all forms of production and business association, supply of goods and services according to the production network and market value chain in order to receive, transfer and create the spread of advanced technology and modern governance, increasing added value and expanding consumption markets.

Type of production - business organization is usually joint venture, joint stock, limited liability companies with two or more owners, types of cooperatives... Encouraging the formation of multi-owned economic groups, which are capable of participating in regional and global production networks and value chains.

The common point of these types of production - business organizations is that the objects of ownership include tangible and intangible assets of production - business organizations formed from the contribution of private owners based on the principle of voluntary and mutual benefit.

Each owner benefits when these companies operate efficiently or is responsible for losses proportional to the equity they contribute. In addition to assets contributed by owners, there are also assets from other sources (supported, sponsored, presented, donated, or accumulated results of production-business activities) belonging to joint ownership of the members of this economic organization.

Mixed production and business organizations of this type have their charters of operation and elect the Board of Directors on certain principles prescribed by the charter, to act on behalf of the owners to manage and effectively use common assets of the production - business organization, bringing benefits to the owners and contributing to the common interests.

There are strict and binding regulations on the responsibilities of the people in the Board of Directors who are authorized to manage production - business with the results and performance of the production - business organization. The type of mixed production - business organization is very diverse, from multinational, transnational corporations to joint stock, limited liability companies with small scale.

Cooperatives also belong to the mixed economic sector because cooperatives are also formed based on the contribution of property, capital of private owners, and of small commodity producers, and operate as mixed production and business organizations.

Regardless of form of ownership, economic sector

Subjects of ownership of economic sectors only include tangible and intangible assets that are being used in production and business activities of different types of business organizations and bring economic benefits to owners, at the same time contributing to the common interest.

"All businesses of all economic sectors must operate under the market mechanism, operate equally and competitively under the law." Implementing consistently a legal business regime for businesses, irrespective of ownership form and economic sector.

National property of people’s ownership and does not belong to any economic sector.

All national property (such as land and resources associated with land, waters, islands and resources associated with the sea, islands, airspace and resources associated with the airspace, the state budget and other capital sources mobilized by the State, all kinds of reserve funds ...) of the entire people's ownership do not belong to any economic sector.

The people delegate power and authorize the State to act as the representative of ownership, allow the State to uniformly manage by law and have the responsibility to effectively use all national assets under the ownership of the people to create basic conditions, material - technical conditions, financial conditions, construction and development of socio-economic structures ... for the equal development of all economic sectors and for the country's socio-economic development.

The state does not belong to any economic sector. These national assets belong to the entire people. If entities of all economic sectors want to use them, they must comply with the market mechanism through auction, through contracts signed with state management agencies in an open, transparent and equal manner among economic sectors.

The State is authorized by the people to perform the role of "conductor", the role of "midwife" for the development of all economic sectors, for the socio-economic development of the country. The economic role of the State is to create a legal environment, create an economic environment, create a social environment, provide public services, public goods, and create a level playing field for the development of all economic sectors.

The State is not "biased", not "inclined" to any economic sector. The State plays the role of setting orientation, building and perfecting economic institutions; using the State's tools, policies and resources to regulate the economy...

The State creates a fair, transparent, healthy and open competitive environment, following the market mechanism for all economic sectors to mobilize and efficiently use all social resources for economic development to develop the country’s economy - society.

And so, enterprises of all economic sectors not only bring benefits to their owners, but also contribute to the common good of the country and fulfill social responsibility.

The State, as representative of the entire people’s ownership, authorized by the people, on behalf of the people to effectively manage, administer and use all resources and all assets belong to the entire people to create foundations, conditions, and orientation, to guide and promote economic sectors to develop in line with the common goal of developing the country’s economy-society in a sustainable, comprehensive, creative, and inclusive manner, for the country to step steadily to socialism.

The State as an entity responsible for creating all fundamental conditions for the country's socio-economic development, for the development of all economic sectors, the State holds a decisive role in the development of the national economic system, in the cause of building and defending the Socialist Republic of Vietnam.

All economic sectors that are constituent parts of the unified national economy are equal with each other and equal before the law. There are reciprocal relations, cooperation and equal competition among economic sectors.

All economic sectors have different and similar important positions and roles. The public economic sector with SOEs that "focus on key and essential areas; important areas and national defense and security; areas where enterprises of other sectors do not invest in", plays a key role, while the private economic sector is an important driving force of the economy in the country's socio-economic development.

The public economy together with the private sector are the core to developing a highly autonomous economy. Entities of all economic sectors cooperate, compete fairly and equally before the law, jointly mobilize and use effectively all social resources to contribute to the general socio-economic development of the country with the common goal of "rich people, strong country, democracy, justice and civilization”.

Assoc.Prof., Dr. Vu Van Phuc (Vice Chairman of the Scientific Council of Central Party Agencies)

Breakthrough in economic reform and restructuring in the coming time

Commenting on the draft documents submitted to the upcoming 13th National Party Congress, VietNamNet introduces the opinions of Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management.