Promoting the pivate sector in Vietnam Analysis from the 从促进私营部门在越南的分析.docVIP

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Promoting the pivate sector in Vietnam Analysis from the 从促进私营部门在越南的分析.doc

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Promoting the pivate sector in Vietnam Analysis from the 从促进私营部门在越南的分析

PROMOTING private SECTOR development in Vietnam FROM the Effectiveness of Supporting policies Ass. Prof. Dr. Nguyen Dinh Tai Central Institute for Economic Management (CIEM) 1. Background Over the last 20 years of Doimoi (renovation) reform policy in Vietnam, private sector has significantly contributed to the outstanding success of the economy. The rapid development of this sector has been resulted from the opening -up economic policy pursued by Vietnamese government and particularly, from the issuance of the Enterprise Law. This law and other policies have been creating a favorable business environment for the private sector development. After 20 years of Doimoi, this is a right time to review and assess our policies in order to find the way for further development. The question here is how effective the private sector development policies over the last 20 years are? How do these policies contribute to the private sector development? What are the policy weaknesses and bottlenecks? And, how these policies should be improved to reinforce industrialization and modernization in Vietnam? To answer the above questions, this paper will focus on: (i) Overview of the development of the private sector and it’s role in Vietnam for 20 years of Doimoi; (ii) An assessment of the effectiveness of the private development policies incentives; and (iii) Some policy recommendations. In this paper, “private sector” is understood as the enterprise registered under Enterprise Law (1999). These can be limited companies, joint-stock companies, partnership companies and private enterprises. This definition excludes: (i) unregistered enterprises ; (ii) households; (iii) foreign invested firms; and (iv) state owned enterprises (SOEs). In other words, private sector in this paper is only a part of so called “non-state sector” in Vietnam. Private sector development policies are understood as a set of related policies, which has a certain impact on its development. Many of these pol