The 5^th Plenum of the Party Central Committee (Tenure XII) adopted Resolution 10-NQ/TW on “developing private economic sector into a key driver of the socialist-oriented market economy.” This is a critical direction of our Party aimed to promote robust development in the private economic sector in the coming time.

Over the 30-year renewal period, our Party has carried out a consistent policy of developing the multi-sector economy, in which the private economic sector represents a fundamental element of the national economy. Developing the private economic sector is a long-term strategic matter of the socialist-oriented market economy, contributing to successfully fulfilling the mission of economic development and increased internal strengths of the country during the integration process. That assertion is attributed to the fact that our Party has perceived correctly and followed the objective law of transforming from small-scale production to large-scale socialist production; and regarded bringing into play the role of private sector as an important approach to effectively mobilize, allocate and utilize resources dedicated to development, and vigorously liberate manufacturing power. Our Party first raised the standpoint and policy on the multi-sector economy at the 6^th National Party Congress, instead of the one-sector economy. Our Party continued to constantly realize the aforementioned standpoint and policy at the following congresses with new developments to ensure their relevance to practical situations. Particularly, the 5^th Plenum of the Party Central Committee (Tenure IX) passed Resolution 14-NQ/TW, dated 18 March 2002, on “continuing to innovate mechanisms and policies, encourage and facilitate development of the private economic sector.” This can be considered as the first specialized resolution of our Party, which guides this vital economic sector and makes contribution to creating a legal environment for promoting rapid growth of the private economic sector and its increasingly important role in the national economy.

Our Party set out clear standpoints and guidance for the private economic sector, and regarded it as “a key driver of the economy” by the 12^th National Party Congress. On concretizing that spirit, against the backdrop of our country’s increased innovation of the growth model and restructuring of the economy in association with the execution of three strategic breakthroughs, the 5^th Plenum of the Party Central Committee (Tenure XII) adopted Resolution 10-NQ/TW on “developing the private economic sector into a key driver of the socialist-oriented market economy.” This resolution has identified more clearly the position and role of the private economic sector in comparison with previous ones, regarding its healthy development as an inevitable, objective requirement, which is both pressing and enduring in the process of perfecting mechanisms and development of the socialist-oriented market economy while guiding development of the private economic sector through practical, concrete solutions in accordance with new situations and conditions.

Currently, the private economic sector is attracting about 85 per cent of the workforce of the national economy and making significant contribution to mobilizing social resources dedicated to enhancing production, business, economic growth, transformation of mechanisms, state budget income, job creation, people’s standard of living, and social security. Consequently, the State should encourage and create a favourable environment for the rapid, sustainable and diversified development of the private economic sector featured by high growth rate in terms of quantity, scale, quality, and proportion of GDP; remove all barriers and prejudice; and ensure the involvement of this sector in every industry and field not prohibited by law. The State also needs to encourage the startup movement and innovation; improve operating effectiveness of the small and medium enterprises; promote development of every form of connectivity regarding manufacturing, business and supply of goods and services according to production networks and market value chains between the private sector and others with a view to absorbing and transferring advanced technologies and modernized management, increasing the added value, and broadening consumer markets. During the development process, it is necessary to exploit the positive, useful side of the private sector while stepping up examination, supervision, inspection, control, openness, and transparency to prevent and minimize the negative phenomena, especially manifestations of “crony capitalism” and “interest groups” attempting to influence public policy in their favour, compete unfairly and so forth.

Resolution of the 12^th National Party Congress continues to affirm and concretize more clearly the consistent perception and mentality toward the private economic sector, creating favourable conditions and environment for this sector to develop on equal terms with other economic sectors. However, in reality, this sector is facing numerous obstacles and challenges relating to mechanisms, policies, technologies, and so on. To address those problems and enable the private economic sector to truly become a key driver of the economy, there is a need to grasp and awake to several fundamental issues as follows:

First, creating a favourable environment for investment and business conducive to bringing into play potential and advantages of the private economic sector. First of all, it is necessary to raise awareness of the position and role of this economic sector, bringing about social consensus and giving prominence to increasing responsibility for supporting development of this sector. In addition, the State needs to stabilize macro-economy, curb inflation, and speed up restructuring the economy and innovating growth model; and proactively and flexibly adjust monetary policy to ensure stable interest rates and exchange rates, reduction of State budget overspending, and public debt safety. At the same time, there is a need to perfect mechanisms and policies to attract investment; institutionalize rights to freedom to conduct a business and possess property as stipulated by law; promote innovation and improve competence, efficiency and effectiveness of institutions to settle civil disputes and those relating to business and commerce, especially reconciliation, commercial arbitration and people’s courts at all levels so as to protect legitimate rights and interests of private enterprises; review and remove mechanisms and policies that may result in inequality between the private economic sector and others, ensuring a fair competition in the market; perfect mechanisms, policies and laws on land, resource management, and environment; restructure the financial market, particularly the credit system and capital market; develop robust commodity and service markets; promote commerce and consumption; and work out mechanisms and policies to encourage the private economic sector to actively participate in international economic integration. Ministries, departments, branches, and local authorities should pay attention to solving the difficulties in production and business, regularly providing information, and helping private enterprises to find potential markets and partners.

Second, strengthening technological innovation and modernization, development of human resources, and labour productivity. Technological innovation and modernization present issues of significant importance to economic sectors, including the private sector in the age of robustly growing knowledge-based economy. The State, therefore, needs to encourage and enable the private sector to invest in study, development, application, and introduction of advanced technologies to phases of production and business processes to reduce production costs, boost productivity and product quality, and try to achieve an average labour productivity growth of about 4 per cent to 5 per cent by 2016-2025; deepen investment in technological scientific research facilities to cultivate researchers and scientists; narrow the gaps between the private sector and other sectors in terms of technological level, quality of human resources and competitive capabilities; strengthen international cooperation, acquisition, transfer and application of new technologies. It is necessary to enhance training of human resources to deal with the imbalance between “teachers and workers,” “lack of both teachers and workers,” and so forth. Thus, there is a need to conduct comprehensive basic innovation and improve quality of education and training, especially in vocational training, training of highly-skilled workers, cultivation of human resources, and enhanced management capabilities, meeting the needs of the private economic sector for quantity and quality of human resources. There should be major focuses of training. Priority should be given to cultivation of human resources for some branches and fields as ordered by businesses, and consolidation of cooperation and connectivity between enterprises and training institutions. Career guidance and business education programs must be introduced and offered at the secondary level to promote startup culture and shape the will to startup among future generations.

Third, cultivating businessmen and enterprise culture to meet development requirements of the private economic sector. The enormous historic achievements of our country are attributed to significant contribution of Vietnam’s business community operating in all economic sectors and fields, deserving to be the vanguard force in national building and development. As for private enterprises, the businessmen have tried their best to rise; bring into play their national spirit and senses of social responsibility; step by step enhance prestige, brand names and business names; make many products and goods of high quality, reasonable prices, and high competitiveness; actively participate in global value chains; produce a lot of wealth in the society; create jobs; make contribution to the state budget; and contribute to enhancing the position of our country in the international arena. To make the private economic sector a truly key driver of the economy in the forthcoming time, there is a need to foster strong businessmen, who are imbued with national spirit and politically enlightened, have business culture and a high sense of social responsibility, are sufficiently competent in doing business and foreign languages, and effectively participate in production networks at regional levels and beyond. At the same time, it is necessary to attach importance to establishing business culture aimed at enabling managers and employees to make good use of their talent, intelligence, senses of responsibility, self-reliance, and resilience to flourish and assert themselves in the modern and internationally integrated market economy.

Fourth, strengthening the Party’s leadership and bringing into play the roles of the Vietnamese Fatherland Front and socio-political unions in developing the private economic sector. First of all, it is vital to innovate the Party’s leading method and exploit the roles of party organizations in the private economic sector in line with demands of the socialist-oriented market economy; intensify guidance on propaganda and education to raise awareness and reach a high consensus about our Party and State’s consistent policy on developing the private economic sector; direct the implementation of policies on encouraging development of the private economic sector in an effective, open and transparent manner; attach importance to party membership development within the private economic sector; and well perform examination, supervision, preliminary summing-up, and summation in order to timely rectify incorrect perception and actions during execution. Moreover,  there is a need to bring into play the roles of the Vietnamese Fatherland Front. Socio-political and social vocational organizations, in their capacity as representative organizations, actively operate in conjunction with state agencies to provide information for and assist members in connectivity, business cooperation, technological training, and consultation. At the same time, it is important to work out programs and plans to supervise the realization of the Party’s resolutions and directives on developing the private economic sector, ensuring the Party’s strict disciplines and leadership over this important economic sector.

Good perception and execution of Resolution of the 5^th Plenum of the Party Central Committee (Tenure XII) on “developing private economic sector into a key driver of the socialist-oriented market economy” constitute a fundamental, urgent requirement at present time. Properly performing those tasks will help to raise awareness and responsibility for leadership and direction, creating favourable conditions for the private economic sector to flourish and contribute more to the innovation and socioeconomic development of our country.

Colonel Tran Huu Hoa, Air Defence – Air Force Academy