Establishment of Economic Development Ministry proposed

Published: 21/01/2010 05:00



The Ministry of Planning and Investment has submitted to the government an economic restructuring scheme, including a proposal to set up an Economic Development Ministry.

Nguyen Dinh Cung, vice director of the Central Institute for Economic Management (CIEM), which compiled the scheme, talked about the scheme.

According to Cung, after analyzing problems in the current economic structure, among many solutions, the compiling board proposes to establish a Committee for Development Renovation or a Ministry of Economic Development. The first is the more favored.

Why does CIEM suggest establishing a Committee for Development Renovation or a Ministry of Economic Development?

We offered this suggestion several years ago. Why? We have talked about institutional reform but the institution is broad. Where should we make the breakthrough? We think that we should concentrate on the quality of economic policies. The establishment of the above committee or ministry must serve as the goal.

We need a central agency which acts like “general staff” in terms of policy. When ministries submit draft policies, this agency will verify or give guidance for their compilation.

Currently, before policies are sent to the government, they are only verified by the Ministry of Justice for their legality. The content is not verified by any agency. The Committee for Development Renovation or the Ministry of Economic Development would independently watch over the implementation of policies or ask for immediate amendments to ensure all policies serve the national interests.

It was suggested that the Ministry of Finance and the MoIP merge into the Economic Ministry. What would this achieve?

We think that it is better to set up a new committee, rather than merging two ministries into one. This committee would not be responsible for administrative management but will focus on policies including ensuring their quality and implementation. This institution wouldn’t need many staff and grassroots branches, only qualified personnel at a central level.

Does the board anticipate that it would be difficult for this proposal to be approved?

Japan and South Korea have such an institution. China also had a committee for renovation. International experts who research East Asia and Southeast Asia are very surprised that Vietnam doesn’t have one.

As a result, a large number of policies, frequent change of policies, conflict between laws, and ineffective implementation of policies are normal occurrences in Vietnam

International experts have also said that without such an agency, it is difficult to demonstrate “State promoting development”, especially in a period of industrialization.

The scheme also suggests setting up a General Department for Assisting the Development of Private Enterprises. Why has CIEM made that proposal?

This proposal also originates from institutional and development history. The private sector’s contribution to the economy has become more important. However, despite our own economic renovation, that sector is still in a disadvantageous position.

Administrative management agencies, despite how the laws, are always in a superior position.

The relations between the two sides, therefore, are unequal. This fact is not the fault of anyone, but a result of history. So we need a strong enough body to balance this – another state agency that would protect the private sector.

The role of the administrative court and associations are not powerful enough so it is better to have a general department to work out the problems of private firms with other state agencies.

But we have had associations and state agencies to support private enterprises but in the end private companies have to run themselves. Should general departments be a provider of such services?

This agency must be a state run agency to be able to be balance and protect the private sector. We have the Agency for Assisting the Development of Small and Medium Enterprises but this agency is weak politically. The new general department should be under the government, like the Vietnam National Administration of Tourism. It can supply public services to really assist enterprises.

This general department must work under the principle of solving emerging problems for private enterprises and suggest policies accordingly.

Why does the CIEM propose to force credit institutions to lend at least 30 percent of credit available to the private sector?

This suggestion aims to deal with the market’s shortcoming in their approach to the private sector. This ratio in other countries is between 20 and 30 percent so we propose 30 percent.

In Vietnam, if banks are free to distribute capital, they would always give priority to big businesses, state-owned enterprises and familiar clients to ensure safety and low costs.

It is good for banks but not good for the common interest. The private economic sector is using capital more effectively and they create many jobs. If they can’t have access to more capital, it will be difficult for them to develop, update technology, expand production and, in general, our economy will suffer.

VietNamNet/Tuoi Tre

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