Fully aware of the development rule of the time and the lessons learnt from the world market economy, our Party advocated developing the socialist-oriented market economy (SOME). This shows the Party’s thinking and concept of the parity of relations of production and the level of productive forces in the transitional period to socialism in Vietnam.

Market economy is a development product of human kind and the high level of development of the commodity economy in which all inputs and outputs of the production are decided by market. The presence or acknowledgement of market economy in countries around the world shows that market economy is of robust vitality and represents a natural development and becomes a rule in human kind history. Market economy always exists and develops even when it is not accepted in a certain country. Its internal development impetus makes it an inevitability.

Market economy is a model of socio-economic organization in which production, distribution, exchange and consumption are conducted through markets. Therefore, market economy is not only a “technology”, a “mean” for socio-economic development but also represents socio-economic relations. It consists of not only factors of productive forces but also a system of relations of production. For this reason, there can’t be a general, abstract and pure market economy separated from socio-economic model and political regime of a country. The development of market economies in the world shows us the diversity of this economic model. Market economy may come in various forms, such as the ‘the social market economy” in the Federal Republic of Germany, the “allied market economy” in Japan, the “welfare state market economy” in the Northern European countries and “the socialist market economy” in China, etc. These models feature the rule of market economy and all gear toward social targets and human development.

Market economy may be applied in different socio-economic models, regardless of political regime and the level of the economy. Backward economies with low starting points like Vietnam may choose market economy as a mean to realize its goals of socialism – “Prosperous people, strong country, democracy, equality, civilization”. In particular, market mechanism must be regulated fully and synchronously; the State respects and applies rules of market economy appropriately. It is obvious that socialist-oriented market economy is not a mere combination of the two factors, namely “market economy” and “socialist-oriented” and “socialist-oriented” is not an “overcoat” of market economy but the goals and contents of the market economy.

The SOME model initiated by Vietnam is a new one aiming to surmount the limitations and negativeness of the capitalist market economy, while inheriting and upholding its advantages. However, this is an unprecedented model so shortcomings, both theoretical and practical, are inevitable, for example: (i) the inadequate understanding of SOME, especially of the state economic sector, of state enterprises, collective economy, of the resource allocating mechanism, land owning mechanism, price mechanism of some essential commodities and public services; (ii) the unconvincing awareness and explanation of the socialist-oriented factor; (iii) the over-emphasis laid on socialist-oriented and the disregard of the rules and nature of market and vice versa. These have caused a slow perfection of the market economy institutions; the rules on joining and withdrawing from market of enterprises are not fully respected; business environment is not kept transparent and equal among enterprises. The prices of some essential commodities and services haven’t conformed to the market principles. Some markets remains at low level and haven’t been operated appropriately. There remains direct and unnecessary government intervention in the economy and the subsidies and ask - give mechanism in the building and implementation of policies. Factors ensuring the socialist-oriented market economy have received inadequate attention.

The 12^th National Party Congress stated a new thinking of SOME, i.e. “an economy that fully respects the rules of a market economy while maintaining socialist-oriented to fit each development period of the country. A modern and internationally integrated market economy put under the management of the rule-of-law socialist state led by the Communist Party of Vietnam towards the goals of “prosperous people, strong country, democracy, equality and civilization”.

The approach to a modern and internationally integrated economy of the SOME model in Vietnam both includes standards and contents of a modern economy and covers the distinctive feature of Vietnam – socialist-oriented. Elements of socialist orientation develop “internally” in the process of modern market economy development and international integration, manifested in the following points: (1) Vietnam’s socialist-oriented economy should have progressive production relations conforming to the development level of production force with different forms of ownership and economic sectors in which the State economic sector plays the key role; (2) The role of people as masters must be promoted in socio-economic development; (3) Ensure social progress and equality as well as unanimity of economic development, and social progress and equity in each development step and policy; (4) Exercise the management of the rule of law State of the socialist Vietnam; (5) The Communist Party of Vietnam leads the market economy to achieve the objectives “prosperous people, strong country, democracy, equity and civilization”. The leadership of the Communist Party of Vietnam is prerequisite for realizing socialist orientation in the market economy.

Hence, it is possible to say that the most important content in market economy socialist orientation in Vietnam is the sustainable development. Obviously, in Vietnam’s development policy, the socialist orientation concept can only be realistic when it “contains” sustainable development for social progress, free and comprehensive development of each individual. Thus, the market economy and socialist orientation do not contradict but are unified.

Over the past 30 years of renewal and implementation of a socialist-oriented market economy, Vietnam has gained significant achievements in socio-economic development. Developing the socialist-oriented market economy has been the core factor that saved the country from socio-economic crisis and low level of development to make it a middle-income economy on the way to industrialization, modernization, and international integration. The economy enjoys a fairly high growth rate of 7% per year. There has been a shift in the economic structure towards industrialized and modernized direction. Elements of foreign economic relations such as exports, foreign direct investment, official development assistance, labor export, tourism, etc have become priorities and made significant contribution to the GDP. Socio-cultural development has seen progresses, the country’s status and people’s living standards have been improved. Notably, Vietnam – one of the countries with effective implementation of economic development in associated with hunger eradication and poverty reduction programs – has fulfilled the Millennium Development Goals ahead schedule. The overall strength of the country has been enhanced. Its diplomatic relations have been broadened and deepened, and its status in international arena has been improved.

Besides the achievements, there remain shortcomings: “Economic development has not been sustainable and proportionate to the potentials, requirements and the resources. In the last 10 years, there have been points which showed unsustainable macro-economy, decrease in the growth rate of the economy.  Quality, efficiency, social labor productivity and compatibility of the economy remain rather low., Unsustainable developments are seen in economic, cultural, social and environmental fields. Many problems have emerged posing threats to social stability. In some aspects, people haven’t benefited from achievements of renewal process.

In conclusion, the choice of SOME is totally objective and relevant to Vietnam’s reality. It is also a scientific proof to refute all the distorted arguments of hostile forces against this economic model. Thereby, we are more confident in the leadership of the Party over the country’s renewal process and keep steadfast in the model of socialist-oriented market economy.

Assoc Prof Chu Van Cap, Ph.D