EXCERPT | Vietnam & it's Evolving Concept of A Socialist-Oriented Market Economy (SOME)

By Prof. Adam Fforde via Journal of Current Southeast Asian Affairs

By Prof. Adam Fforde 

via Journal of Current Southeast Asian Affairs

Image Attribute: News.cn

Origins 

This strategic slogan appears historically to link simply to Soviet development doctrine, often known as Marxism–Leninism. In this schema, progress towards communism via socialism is gauged by the emergence and dominance of socialist “relations of production” (Stalin 1951). Since their progressive nature is shown by their (actual) dominance by the Party, the Party’s “leading role” is manifest in forms such as Socialist-Oriented Economies (SOEs) and collectives (cooperatives). As mentioned, Party leadership of SOEs is, in this schema, rather different from that of collectives. The former relies largely upon the state, while the latter relies upon the ability of local Party Committees and cells to control appointment to collectives’ managements and to issue them with instructions that, in Leninist fashion, are to “concretise” general instructions coming from high levels. Decree # 10 of 1988 removed hundreds of thousands of cadre positions in rural areas when it, in effect, accepted a severe shrinkage in the scope and existence of cooperatives. Nowadays, this part of the “socialist economy”, which also used to include other cooperatives in areas such as trade and light industry, still exists but has a very limited scope in the interests of Party organisations in implementing the Party’s “leading role”. For SOEs, in stark contrast, there remains a central Party “block” (khoi) of large SOE groups, each of which contains Party cells.[1] However, as argued above, these are the facade of complicated relationships that do not amount to clear ownership, either in terms of the formal State regulations or the actual powers of those sharing in commercial profits.

Image Attribute: Vietnam 2016 12th Party Congress, posters and signs everywhere. This image is of Ben Thanh Traffic Circle in Ho Chi Minh City. / Source: Picture taken 17 January, 2016. Prince Roy under a Creative Commons Licence

The Notion as Doctrine 

The same source cited above, which gives standard answers suitable for those taking tests on it, states:[2]

The nature of a socialist-oriented market economy in our country:  

• It is not an economy managed according in the style of a centralized bureaucratic subsidized system  

• It is not a free market capitalist economy  

• It is not yet entirely a socialist-oriented economy. 

This is because our country is in the period of transition to socialism, and there is still a mixture of, and a struggle between, the old and the new, so there simultaneously are, and are not yet sufficiently, socialist factors. 

It is reasonably obvious from this that central tensions are those between (1) the notion that it is market forces that should drive development, (2) the goal of such development being industrialization and modernization, and (3) the simple fact that after a generation of rapid and general popular use of a market economy and major economic change, the economy has not industrialized. The evidence from analysis of the state sector suggests that the kernel of the matter is to be found there, and this is reflected in debates.

Chart Attribute: Vietnam GDP Growth Rate from 2010 to 2020* / Source: Statista 

Debates around the Concept 

To start with, it seems rather obvious that a regime that has not modernized its political foundations faces the fascinating question of how to live with an apparent economic success that its core developmental slogans, reasonably interpreted, should deem a failure: Vietnam has not industrialized. The ‘ghost in the argument’ here would seem to be that Party rule in fact does not, evidently, rely upon the state sector, that industrialization and the state sector are clearly not driving development, that economic growth has been fast, and that the state sector is not subject to coherent political control anyway.

Reports in 2015 of the drafts of the political report to the January 2016 XIIth Congress argued that a new definition of SOME was forthcoming (Viet Ha 2015), and interviewed a leading Vietnamese reformist, Nguyen Quang A, who argued that there was not real change. However, in mid-February, after the XIIth Congress, Nguyen Thanh Tuan argued in the Party’s theoretical journal that there had been an easing of the concept’s leaning towards the state sector (Nguyen Thanh Tuan 2016)

This interpretation is supported by the Political Report to the XIIth Congress, read there by the General Secretary, Nguyen Phu Trong. The report mentions the ‘leading role’ of the state sector only once (Section II), whilst the SOME is mentioned eight times. In an extended passage on the SOME (Section I) the emphasis is upon use of policy, legality, regulation, etc. and the “leading role” is not mentioned. However, IM is still seen as a sign of progress and is mentioned nine times. Production relations (quan he san xua t) are mentioned twice and not defined as the state and collective sectors. 

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About the Author:

Prof. Adam Fforde is a professorial fellow at Victoria Institute of Strategic Economic Studies, Victoria University, Melbourne, Australia. 

Cite this Article:

Fforde, Adam (2016), Vietnam: Economic Strategy and Economic Reality, in: Journal of Current Southeast Asian Affairs, 35, 2, 24-26 URN: http://nbn-resolving.org/urn/resolver.pl?urn:nbn:de:gbv:18-4-9527 

Publication Details:  

Published by GIGA German Institute of Global and Area Studies, Institute of Asian Studies and Hamburg University Press. The Journal of Current Southeast Asian Affairs is an Open Access publication, published under Creative Commons - Attribution-Noncommercial-No Derivative Works.

References:

[1]  That is, those directly under the ‘bloc’; they each in turn had their own constituent elements, usually SEs. Taken from June 2014 – the Main Page of the site is entitled “The Party Committee of the Central Business Bloc” (“ng y kh i doanh nghi p trung ng”)” (Fforde 2013: 37–38). 

[2] See online: (2 August 2016).

Disclaimer: The images and chart are not the part of original publication. They have been used by IndraStra.com for reference purposes only.