The network-based economy in Vietnam

After two decades of GPD high growth in the 1991-2010, Vietnam is currently entering a declining phase. The on-going developments would virtually nullify all achievements the country has previously achieved and deny the CPV’s promise to transform Vietnam into an industrialized country in 2020. The ‘ideology vs reality’ dilemma facing Vietnam today is generally held as the main block holding back the momentum Doi moi campaign initially generated growth, but has prevented the country jump starting and accelerating economic growth toward a more qualitative and sustainable development phase. This is because of the CPV continued insistence on building ‘a market economy with socialist orientation’. The ‘socialist’ model of development, typically of a state capitalist or network-based economy, which favors SOEs as the ‘pillars’ of the economy with all the privileges and protection attached to it, has drained the country’s resources and prevented the private sector from joining the market and the development process on an equal footing. Instead, it has created and nurtured a breeding ground for corruption, cronyism, favoritism and nepotism that leaves little room for private innovation, efficient production and effective management so that Vietnamese products can compete and grow sustainably in international markets. What Vietnam really needs to come out of the dire situation of today and to become more sustainable is a development-oriented market economy and a public administration for development, if the country was to keep pace with development in the region, let alone in the world. Furthermore, a check-and-balance mechanism is needed to allow the participation of a more active civil society to counter the excessive abuse of power brought about by the corrupted network that has caused severe threats the economic sustainability of the country.