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investors as well as enterprises were clearly defined.
Another noteworthy point is that business freedom
is recognized. These important changes have
contributed to a sharp increase in the number of
newly registered enterprises.
However, until in Law on Enterprises 2005,
all enterprises, regardless of ownership were
regulated to create a more level playing field
among SOEs (previously governed by Law on
State-owned Enterprises), foreign enterprises
(previously governed by Law on Foreign
Investment) and other types of enterprises such as
limited liability companies, joint stock companies,
partnerships, domestic private companies, limited
liability companies , joint-stock companies from
SOEs, enterprises of political organizations, socio-
political organizations converted into.
Then, Central Resolution 5 (XII) on perfecting
the socialist-oriented market economy affirmed:
“The state economy, the collective economy and
the private economy are the core to develop an
independent, autonomous economy”. The role of the
private economy was raised, became the core of the
economy, beside the state economy and collective
economy rather than just one of the driving forces of
the economy as before.
Status, position and role of the private economy in
Vietnam’s economic development
From a constrained perspective up to now, the
private economy was recognized as an important
player in economic development and identified as
an important engine of the economy.
PRIVATE ECONOMY, A DRIVING FORCE OF VIETNAM’S
ECONOMIC DEVELOPMENT
ASSOC. PROF. TRAN KIM CHUNG, TO NGOC PHAN, PhD. -
Central Institute for Economic Management *
The private economy of Vietnam has contributed a great deal to the socio-economic development of our
country. Private enterprises contributed 43.22% of GDP and 39% of total social investment, created many
jobs in the economy. However, there are many factors that make difficult and limit the motivational role
of the private economy, so some measures need taking to make it become the foundation of the Vietnam’s
economic development model in the coming period.
Key words: Private economy, economy, development, state-owned enterprise
Received:December22
nd
,2017
Revised:January4
th
,2018
Acceptedforpublication:January5
th
,2018
Institutional development for private economic
inVietnam’s economic development
From the renovation to now, the institution for the
private economic has remarkably developed. Most
notably, there is a change of viewon the role of private
economic in the Party’s document. In the pre-reform
period, Vietnam implemented a centrally planned
economy. The government decided all economic
activities, allocated inputs and distributed outputs.
State-owned enterprises (SOE) and collectives are
still the twomain types of ownership in the economy.
Therefore, the existence of private and individual
ownership is constrained by the perspective that they
are the source of capitalism at that time.
After the reform period, the Seventh National
Party Congress 1991, the Party determined that
“state economy and collective economy are the
foundation of the national economy”. In 2000
many legal documents were passed such as Law
on Land (1988), Law on Enterprises, Law on
Private Enterprises (1990), Law on Bankruptcy of
Enterprises (1993), Law Amending, Supplementing
a number of Articles of Law on Enterprises, Law
Amendment Supplementing a number of Articles
of Law on Private Enterprises (1994), establishes
a legal framework for the operation of the private
sector. However, the development of the private
sector is still very slow (Hakkala and Kokko, 2007).
Since 2000, when Law on Enterprises (1999)
has taken effect, the rights of the state, officials,
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