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Thirty years of international economic integration: some thoughts and recommendations
14/5/2015 15:39' Send Print
Former Secretary of the Party, former Deputy Prime Minister Vu Khoan. Image: baoninhbinh.org.vn

1- It is possible to say that Viet Nam’s economic renovation in the past thirty years includes two main contents. They are the shift from the centrally-run, bureaucratic and state-subsidized market economy to the socialist-oriented market economy; and the shift from the autarkical economy to open economy which is integrating into regional and global economies. In the past three decades, Viet Nam’s international integration underwent different developments. Concerning content, the Party used the concept “extension of cooperation,” then the concept “international economic integration” (the 8th Party Congress in 1995) followed by “proactive international economic integration (the 9th Party Congress in 2001), “Proactive and active international economic integration (the 10th Party Congress in 2005) and “Proactive and active international integration” in general (the 11th Party Congress in 2011); Concerning level, it was extended from regional economic integration to global economic integration when Viet Nam acceded to the World Trade Organization (WTO); Concerning international economic integration commitments, they were elevated from low to high, from narrow to extension in line with the country’s capacity and development trends in the region and the world.

2- International economic integration is a big guideline of the Party, so the implementation was expedited with workshops, talks and particularly a national conference was organized by the Government to assess achievements, constraints, causes and limitations and to map out orientation for international integration in the coming years.

Overt the past 30 years, beside major guidelines on international economic integration put forth at Party Congresses, the Politburo, and the Party Central Committee issued three specialized resolutions on international economic integration including Resolution 07-NQ/TW dated 27 November 2001 of the Politburo on international economic integration, Resolution 08-NQ/TW dated 5 February, 2007 of the 4th Plenum of the Party Central Committee, 10th Tenure on “Some big guidelines and policies for quick and sustainable economic development when Viet Nam becomes a member of the World Trade Organization,” Resolution 22-NQ/TW dated 10 April, 2013 of the Politburo on international integration. These documents pointed to some leading viewpoints in international economic integration. Though they were more or less different, in general they touched upon 8 key viewpoints. To prepare for the new “journey” for deeper and wider international integration in content and scale respectively, we should review to assess how the Party’s leading standpoints on international economic integration have been realized and whether something needs revision or supplements.

First, “proactive international economic integration in the light of maintenance of independence, self-reliance and socialist orientation.” Although international economic integration means to abide by common “rule of the game,” Viet Nam has maintained its independence, and self-reliance in socio-political regime, guidelines, and home and foreign policies. It does not means that by so speaking Viet Nam will act only upon “our policy,” we have proactively adjust the legal framework and economic institution to be in line with the socialist-oriented market economy we have been building and developing as well as other international “rule of the game.”

Second, “proactive international economic integration in line with promotion of internal strength, improvement of international cooperation efficiency, and insurance of independence, self-reliance and socialist orientation.” In this aspect, there remain several problems such as low productivity and efficiency of the economy, backward economic structure, low competitiveness and obstacles in institution. The weakest point in international economic integration of Viet Nam is said to be poor implementation of these points of view. If in the deeper international economic integration we fail to strictly implement these standpoints and leading guidelines of the Party, it will be “more disadvantageous than advantageous.” It is necessary to use international economic integration as a driving force for restructuring of the economy, changing growth model and strongly improving the competitiveness of the national economy.

There are diverse opinions on the above-mentioned leading viewpoint on integration between domestic and foreign-invested enterprises. Some hold that foreign-invested enterprises overrun domestic businesses, so we are losing economic independence and self-reliance. Others said that it was necessary to change the way of thinking about economic independence and self-reliance at the time of globalization and international economic integration. Reality shows that all countries have to build their economic foundation and stand on their own feet. Integration is only a tool to consolidate that foundation in a more firmly and effective way and cannot replace building it.

Third, to realize the standpoint “international economic integration is the cause of the entire people,” in the process of international integration, it is necessary to bring into play all potential and resources of economic sectors, and the entire society in which the state economic sector plays the leading role. However, it’s regrettable that there has not been clear delegation of role. Many localities and enterprises have been confused in the process of international integration. International integration (or the process of industrialization) can only applicable to concrete conditions of each locality or enterprise. There is no one-size-fits-all solution for all localities and enterprises; international integration or industrialization is the story of the whole country, implemented in a unified economic space and cannot be realized as a movement.

For economic sectors, state-owned enterprises or non-state enterprises must base on their own demands and capacity to carry out international integration. In Viet Nam, most of the enterprises are small- and medium-enterprises. So for their successful international integration, they need support from the State and professional associations which is relatively limited in Viet Nam at present.

Fourth, “relevant plan and roadmap” are needed to realize integration. Viet Nam has been taking proactive steps in international integration; after each step we have developed programme of action though sometimes the programmes were unrealistic, confusing, neglected or left unattended.

Fifth, “close association between international economic integration with maintenance of national security through integration to enhance national aggregated strength and cultural identity.” Though in some places there have been shortcomings, confusion and even worrying phenomena, this viewpoint has been given fundamentally followed. Nevertheless, quite a few problems have emerged that need to be solved. These problems relate to non-traditional security, protection of national identity, economic security and social order and safety.

Sixth, the point of view “international economic integration is the process of both cooperation and struggle” has been closely followed in negotiations. However, there has been confusion in implementation such as in utilizing measures to protect domestic production which do not run counter against international commitments or in relations with foreign-invested enterprises, much efforts have been made to capitalize on or attract investment not to prevent and levy punishment in time, and not to struggle against their frauds. In trade disputes, we have not been familiar with or taken effective methods for settlement.

Seventh, concerning commitments to international economic integration to “accelerate institutional, economic mechanism and policy reform,” we have done a lot of work. However, there is still work to be done such as institutional reform which is considered as a breakthrough linking reforming of internal institution with integration institution in a harmonious manner.

Eighth, concerning the viewpoint “proactive and active participation in effectively building and capitalizing on international rules and law, proactive recommendations on policy, initiative and cooperation mechanism,” there are constraints in the way of thinking, awareness and capacity for international economic integration.

In general, these constraints show low proactive and active integration, weak internal strength and limitations in organization. If these constraints are not overcome, we will have to confront bigger difficulties in the new stage of wider and deeper integration; we will not be able to cope with new challenges and take full advantage of opportunities of integration.

3. Entering the new period with numerous difficulties and challenges, to heighten quality and efficiency of international integration, we must pay attention to some issues as bellows:

First, we are negotiating the free trade agreements (FTA) with many big partners namely the European Union (EU), South Korea, the Customs Union of Russia, Belarus, and Kazakhstan, the European Free Trade Association of Switzerland, Norway, Iceland, and Liechtenstein. We basically completed negotiations with South Korea and the Customs Union. Within the framework of ASEAN, we are negotiating with the EU on FTA (ASEAN-EU); within the ASEAN+6, we are negotiating the Regional Comprehensive Economic Partnership (RCEP). It is necessary to link and integrate new commitments in ASEAN Community and FTA into a comprehensive plan with clear focus and priority in terms of objectives, partners and aspects.

Second, during international economic integration, attention must be given to the key task of restructuring the economy and basically turning Viet Nam into a modernity-oriented industrialized country.

Third, combine international economic integration with political, security, national defense, cultural and social integration in an overall plan so that they can supplement and support each other to achieve common objectives in each period, each aspect and each partner.

In the threshold of a new journey with many opportunities and no less negative impacts, we must continue to supplement necessary viewpoints on international integration, especially to implement carefully viewpoints, guidelines and policies of the Party and State on international integration.

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This article was published on Communist Review No 868 (February 2015)

Vu KhoanFormer Secretary of the Party, former Deputy Prime Minister