The development of the socialist-oriented market economy is a theoretical breakthrough, creatively applied by our Party, and has achieved significant results in over the past 35 years of Doi Moi, especially in the first half of the 13th National Party Congress tenure, when our country had to face many difficulties and challenges. Immediately after the Covid-19 pandemic, with its severe damage and significant impact on the country’s socio – economic situation. As soon as the health and lives of people were put under control, the world and the region experienced new and complex developments. In this context, with the timely leadership and guidance of the Party, the flexible and insightful management of the Government, as well as the determined efforts and unity of businesses and the people, the country’s economy continued to grow and the socialist-oriented market economy has developed rather comprehensively with many notable features.

First, the elements of the market economy continue to develop; macroeconomic stability is firmly established, and the major balances of the fundamental economy are ensured. The market economy develops in accordance with the socialist-oriented direction, aiming for a wealthy, strong, democratic, fair, and civilised nation, in line with practical realities, operates according to the laws of the market economy, striving towards modernisation and international integration. The domestic market is linked to regional and global markets; prices are mostly determined by market principles; market elements and various market types are gradually developing. Notably, the leadership role of the Party and the governance of the State over the economy are always firmly ensured. The role of the state in the economy is increasingly adjusted to align with market mechanisms; simultaneously, democratic practices in the country’s economic and social life are promoted. The mobilisation and allocation of resources are now more in line with economic and social development strategies and plans, and are better suited to market mechanisms; the investment and business environments have also significantly been improved, etc.

At the same time, economic restructuring has achieved significant results; various markets, especially the markets for manufacturing, have developed healthily with efficient resource utilisation. The overall structure of domestic gross product in terms of ownership relationships is relatively balanced (including approximately 27% from the state economy, 4% from the collective economy, 30% from household economy, 10% from domestic private economy, and 20% from foreign-invested sectors). The transformation of the economic growth model has seen positive changes, with the economy gradually shifting towards a growth model based on productivity enhancement, scientific and technological progress, innovation, high-quality human resources, and the efficient use of resources to improve quality, efficiency, and competitiveness.

Second, the growth rate remains quite high; the scale and potential of the economy increase, and the quality of economic growth improves. With the efforts of our Party and people, the Vietnamese economy has overcome significant difficulties and challenges. In the context of a global economic and global trade downturn with numerous risks, our country’s economy has continued to experience relatively strong growth. Economic growth in 2021 reached 2.56%, while many economies around the world saw negative growth. In 2022, GDP growth reached 8.02%, placing Vietnam among the countries with the highest GDP growth rates globally, and it received international recognition for controlling inflation and maintaining macroeconomic stability. Despite GDP growth in the first six months of 2023 was 3.72%, according to the forecasts of many international organisations, this year’s target of 6.0% - 6.5% can still be achieved. The quality of economic growth has also improved, and the value of the national brand of Vietnam has grown at one of the fastest rates in the world during the 2019 – 2022 period (increasing by 74%). Reputable international credit rating agencies such as Moody’s, S&P, and Fitch all highly regard our national brand’s value and have maintained and upgraded Vietnam’s credit ratings.

Third, social welfare has achieved significant results, and national defence and security have been strengthened. This is a prominent aspect that reflects the nature of our country’s socialist-oriented market economy. Accordingly, social welfare has achieved many important results, especially in education, healthcare, and support for vulnerable groups and disadvantaged individuals. The poor, children under 6 years old, and the elderly receive free healthcare insurance; the malnutrition rate in children and infant mortality rate have reduced nearly threefold; many previously prevalent diseases have been successfully controlled, etc.

Based on economic development and effective solutions to social and welfare issues, the ability to adapt to the nation’s economic challenges has increased. Faced with unprecedented and unpredictable challenges like the Covid-19 pandemic, there have been moments of economic stagnation, with most activities focused on pandemic control. The country has also been influenced to some extent by global economic difficulties such as high oil prices, rising commodity prices, record-high inflation in many countries, supply chain disruptions, etc. However, our Party and State have remained steadfast in their development goals. Well-considered, robust, and humane policies aimed at protecting human and citizen rights, ensuring healthcare, and preserving lives have been effectively implemented, making the country a “bright spot” in the region and the world in terms of disease control, economic growth, and social welfare. Therefore, despite challenging circumstances, the happiness index in our country remains high. In 2023, Vietnam’s “Global Happiness Index” increased by 12 places in the United Nations rankings.

In addition, economic and social development has been closely intertwined with national defence and security, with a focus on building a comprehensive national defence system in terms of capability, forces, and posture, closely integrated with people’s security. Central and local agencies and departments have shown focus on mobilising, managing and utilising resources effectively for national defence and security to maintain political security, social order, and safety, ensuring the security of significant events for the Party and the State. Resources have been concentrated on the development of a modern, dual-use defence industry, contributing significantly to the common achievements of the nation, the work of defending the Motherland early and from afar, and the cause of maintaining a peaceful and stable environment for national development.

The 13^th National Party Congress clearly defines: “The socialist-oriented market economy is the overarching economic model of our country during the transitional period to socialism. It is a modern market economy, internationally integrated, operating in full compliance with market economic laws, under the rule of law of a socialist state, led by the Communist Party of Vietnam; it ensures the socialist orientation for the goal of “prosperous people, strong, democratic, fair and civilised nation”, adapted to each stage of the country’s development”. Based on the achieved results, in the coming time, it is necessary to continue comprehensively implementing the directions for the development of the socialist-oriented market economy as outlined in the 13^th National Party Congress Resolution.

First, intensify and enhance the efficiency of the state-owned and collective economies. In this regard, there should be an emphasis on developing the state-owned sector, ensuring that it will truly play a leading role in the national economy. An important task is to accelerate the resolution of bad debt issues, divestments; effectively implementing the equitisation and restructure of state-owned businesses; promoting innovation, upgrading technological capabilities, and applying modern corporate governance practices; closely monitoring and supervising business practices to prevent the misappropriation of state capital and assets. Also, there should be a focus on strengthening and developing the collective and cooperative sectors to meet the requirements of the market economy and international integration. Consequently, the State needs to further enhance support and encouragement for the development of cooperative and collective economic models, small and medium-sized enterprises, and household economies in agriculture; and intensify efforts and improve the effectiveness of transitioning the growth model in agriculture from agricultural production to agricultural economics.

Second, create favourable conditions and support for the development of the private sector. It is necessary to improve policies to promote the development of the private economy, genuinely considering the private sector as a significant driver of the economy. In addition, we should pay attention to the development of strong private enterprises that can meet the requirements of the economy; and the private sectors should enhance technological capabilities, develop human resources; expand markets, improve the income and working conditions of employees, participate in social activities, protect the environment, and fulfill its social responsibilities. Also, the State should be more effective in implementing the policy “Remove all barriers, prejudices, create all favourable conditions for the development of the private sector; support the private enterprises in innovation, technological modernisation, and human resource development, and enhancing labour productivity. Encourage the formation and development of large private economic conglomerates with strong potential, capable of competing regionally and internationally. Strive for at least 2 million businesses by 2030, with the contribution of the private economic sector to GDP reaching 60% - 65%”.

Third, encourage the development of foreign-invested economy in line with the country’s economic and social development strategy, planning, and goals. We should fully embrace the perspective that “foreign-invested businesses should be increasingly encouraged to develop in accordance with the country’s economic and social development strategy, planning, and goals”. The government, at all levels and sectors, should make efforts to implement effective policies and rigorous management to leverage positive impacts and mitigate risks for the economy in attracting Foreign Direct Investment (FDI). Additionally, we should improve and effectively apply regulations concerning technical aspects, scientific and technological conditions, environmental standards for FDI projects, along with incentive policies to attract FDI projects with green, clean, and environmentally friendly technologies. Also, it is necessary to encourage the attraction of FDI projects with positive spillover effects; prioritise high-tech FDI projects willing to transfer technology, which can have positive effects on domestic businesses, enabling them to participate more deeply and effectively in key segments of the global value chain.

Fourth, improve the investment and business environment to meet the requirements of market economic development in the new situation. The State should comprehensively develop the market elements and types; and implement a consistent market value mechanism that is linked to regional and global markets. In addition, we should fully harness the role of the market in allocating production resources; regulating production and goods circulation; managing business activities and filtering out weak and inefficient enterprises. Also, it is necessary to continue to refine the legal system, mechanisms, and policies in line with the demands of building a modern market economy and international integration. Furthermore, there should be a focus on effectively improving the investment and business environment, promoting entrepreneurial innovation, and developing industries and sectors, as well as businesses based on leveraging the achievements of science and technology, especially the advancements of the Fourth Industrial Revolution; developing competitive products, high-tech products with high added value, environmentally friendly products, and effectively participating in global production networks and value chains. And last but not least, the State should pay attention to the vigourous development of the service sector based on the application of modern science and technology achievements, especially high-value-added services.

Assoc. Prof., Dr. NGUYEN MANH HUONG