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Market economy best for Vietnam, says poll

Publication Date : 17-04-2012


The majority of Vietnamese people prefer a market economy to an alternative economic system, according a survey released on April 15 in Ha Noi.

The poll was conducted from August to October last year by the Vietnam Chamber of Commerce and Industry and the World Bank.

The changing attitudes to the market and the State survey received responses from more than 1,000 respondents with 39 per cent coming from the State sector and 41 per cent from the corporate sector, poll organisers said.

Only 7 per cent of respondents preferred a State-led economy, while 6 per cent regarded the economic model as unimportant, the survey found.

"However, there is some confusion about whether Vietnam has really become a market economy or still remains a State-led economy," said Dau Anh Tuan, from the survey's research team.

He said only 25 per cent of respondents agreed that Vietnam was a full market economy, while 22 per cent thought Vietnam remained basically a State-led economy.

"Vietnam needs more time to convince more people fully that we are now a market economy," Tuan said.

The survey also found that a significant number of people were dissatisfied with the speed of economic transition over the last five years. It found that 28 per cent viewed the reform process as slow or extremely slow, while 26 thought the process neither fast nor slow.

Vietnam joined the WTO six years ago and it has signed up to a number of multilateral economic agreements. Under these accords, the country was requested and expected to reform aggressively and quickly towards a more market-oriented economy.

However, since its joining, the world was plunged into an economic crisis, which saw food and energy prices soar. Vietnam fell into recession as a result, the survey found.

Surprisingly, the survey found that 68 per cent of respondents thought the State should intervene in the market to stabilise the price of essential goods, such as electricity, petroleum, the exchange rate, the gold price and the cost of land, while just 28 per cent thought the market should determine prices.

Senior economist Pham Chi Lan attributed the surprising finding to the monopoly and dominance of State-owned enterprises when it came to essential goods and services.

Lan said that although State intervention to stabilise prices sounded attractive, in the long term it would be counterproductive.

The survey also found that more than half of respondents felt existing price-stabilisation programmes, implemented in a number of provinces, had been ineffective, while just 36 per cent thought they had been worthwhile.

Price-stabilisation schemes employed by the government over the last few years have involved providing interest-free or low-interest loans to companies so that they can offer essential items at lower-than-market prices.

Lan is not convinced that State intervention is the best policy.

"Is State intervention an effective and sustainable solution to price volatility? The jury is out on this one," Lan said.


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