VINACHEM

As Vietnam seeks to attract significant private investment, innovative thinking is critical to navigating complex legislative landscapes.

Innovating thought processes is an urgent and vital task to address and clear the "chokepoints" of our system, especially in the face of "the pressing realities of the country." Among the three major chokepoints currently identified - institutions, infrastructure, and human resources - the institutional issues stand out as the “chokepoint of the chokepoints.”

Long-standing limitations and shortcomings must be urgently addressed to avoid hindering development, wasting resources, and missing opportunities for growth in this new era.

This responsibility falls on the entire political system, but significant burdens rest on the shoulders of the National Assembly, its agencies, representatives, and the government.

These remarks were made by General Secretary To Lam during the opening session of the National Assembly on October 21, reflecting an unprecedented urgency and clarity, emphasizing the need for effective solutions to address the urgent challenges facing the nation.

Recognizing this situation, the General Secretary noted that substantial reform in legislative work is necessary. He urged a transformation in the approach to law-making to ensure it meets state management needs while fostering creativity and unlocking all production potential, thereby mobilizing every resource for development. He called for a shift from rigid management thinking, definitively abandoning the notion that “if it cannot be managed, it should be banned.”

It has been a long time since I encountered such a comprehensive directive on institutional reform articulated in concise, persuasive terms, serving as a compelling call to action in the face of today’s pressing realities.

First, I would like to reiterate the “strategic breakthroughs” required to improve the institutional framework established in the documents from the 13th National Party Congress: “Comprehensively improving the development institutions, primarily those that facilitate the socialist-oriented market economy. Modernizing national governance to enhance competitiveness. Prioritizing a comprehensive, quality improvement in the legal system, mechanisms, and policies to create a favorable, healthy, and equitable investment and business environment for all economic sectors, promoting innovation; effectively mobilizing, managing, and utilizing all resources for development, particularly land, finance, public-private partnerships; enhancing appropriate decentralization and delegation while strengthening monitoring, supervision, and control of power through legal systems.”

However, these “strategic breakthroughs” appear to have not yet fully and effectively transformed into laws and policies that expand space for development; in many instances, legal frameworks and policies even hinder economic progress.

Thus, the General Secretary’s speech aligns closely with the “strategic breakthroughs” outlined in the documents. This assessment contrasts sharply with recent views on institutional development that suggest blaming all inefficiencies solely on the system.

Surveys conducted by the Vietnam Chamber of Commerce and Industry (VCCI) have clearly indicated the quality of institutions.

The recently published VCCI report on the Business Legal Flow revealed a declining trend in the ability of businesses to predict changes in central regulations from 2013 to 2021. The highest rate was recorded in 2014, with 15.75% of surveyed businesses stating they could always or frequently predict changes; however, by 2021, this figure had dropped to just 4.55%.

Regarding the predictability of law enforcement, the percentage of businesses that could always or frequently anticipate government actions has also declined. In 2014, 8.27% of businesses could foresee how local authorities would implement central regulations, but by 2020, this number had fallen to 5.56%.

Furthermore, numerous issues plague implementation. According to VCCI, in 2021, around 31.9% of businesses felt that "departments did not adhere to the guidelines and policies of provincial and city leaders," and this figure rose to 45.2% in 2022. Similarly, 50.4% of surveyed businesses indicated that “the authorities at the district and town levels did not follow the guidelines and policies of provincial and city leaders.”

Such legal realities help explain why Vietnamese businesses struggle to grow and hesitate to expand; the number of companies listed on international stock markets or those aiming for global market dominance remains minimal, despite nearly 40 years since the economic reform.

This situation has prompted the Ministry of Planning and Investment to propose establishing a special working group led by government leaders and Politburo members, including ministers and heads of various ministries, agencies, and localities, to review and consolidate all projects facing obstacles, identify causes, preliminarily propose solutions, and develop a government resolution to guide ministries, sectors, and localities in addressing specific issues, reporting to competent authorities on matters beyond their jurisdiction.

In future legislative developments, how can we attract private investment in major national projects such as the North-South high-speed railway (over $67 billion); numerous urban railway systems in Hanoi and Ho Chi Minh City (over $92 billion); and power projects (over $15 billion annually)?

How can Vietnam effectively attract true “eagle” foreign direct investment (FDI) in sectors such as semiconductors, chips, AI, and data that are shaping the future, rather than continuing to pursue labor-intensive and resource-dependent projects?

These questions and more are being raised as part of the policymaking, legal framework, and institutional development processes to proactively enter “the era of national awakening.”

I particularly appreciated the word “thinking” used three times and “innovation” mentioned eleven times in the General Secretary's speech before the National Assembly.

For it is precisely this innovation in thought that has previously enabled generations of our ancestors to achieve the Doi Moi (Renovation) in 1986, transforming a single-component economy into a multi-component one, the momentum of which still drives us today.

Undoubtedly, innovating thought processes is an urgent and vital task to address and clear the “chokepoint of the chokepoints,” particularly in terms of institutions, in response to the pressing realities facing the nation.  – Source: VNN –