VietNamNet presents the concluding segment of the online roundtable titled: “Vietnam Enters a New Era – The Era of National Empowerment”.

We are pleased to welcome our esteemed guest, Pham Chi Lan, a prominent figure in Vietnam’s economic policy development. She has previously held the positions of Secretary-General and Vice President of the Vietnam Chamber of Commerce and Industry and has contributed to the Prime Minister’s Advisory Group and the Enterprise Law Implementation Task Force.

Joining us is Nguyen Van Phuc, a former Deputy Chairman of the National Assembly’s Economic Committee. With nearly four decades of service in legal and economic capacities, he has a rich background, having been involved in drafting three significant Constitutions: from 1980, 1992, and 2013.

We also have Truong Thanh Duc, the Director of ANVI Law Firm, who serves on the Enterprise Law Implementation Task Force and the International Arbitration Center. Mr. Duc has been instrumental in policy development in the economic sector.

Mr. Nguyen Van Phuc, General Secretary To Lam highlighted the urgent need for reforms in institutions, labeling them as the key obstacles. In your opinion, how is the current law-making process progressing, and what changes can relieve these obstacles?

This question resonates deeply with my experience.

I previously noted that institutions represent the most significant bottleneck. We have identified three essential areas needing reform: infrastructure, human resources, and institutions. However, I believe that institutional challenges impact all others. Institutional issues hinder infrastructure progress and human resource development.

Recently, Ha Sy Dong, a National Assembly representative from Quang Tri province, raised an important query: “Which should take precedence, institutions or human resources?” Institutions are human-made, reliant on human action rather than inherent forces.

In building institutions, it is vital to embrace market principles, as highlighted by Mr. Duc; institutions are fundamental for market operation.

For all of us present, what do we define as an institution? It’s likely each might offer a different perspective. What elements constitute an institution?

Today, it is widely recognized that a nation’s Constitution represents the core legal framework upon which the legal system is built.

A careful review of insights from leaders such as General Secretary To Lam and other officials indicates that laws, alongside the Constitution, are vital for institutional governance. Societal operations ought to be governed by laws, and state functions should also conform to legal frameworks.

Institutions can be classified into formal and informal categories. Formal institutions can be inclusive, enhancing participation, or extractive, limiting or excluding. Informal institutions, as Ms. Lan noted, encompass social standards, traditions, rules, and ethical practices in business, all of which hold significant value in community interactions and commerce.

What does institution-building involve? Primarily, it revolves around establishing a robust legal system rooted in the Constitution. Consensus on this foundational principle is imperative.

It is well-known that most laws are drafted by specific ministries before moving through necessary legislative phases. What are your thoughts on this approach?

The Party provides a solid platform and numerous resolutions, particularly concerning land—providing clear guidance from various governmental levels.

However, it raises the question: is it acceptable for many laws to require amendments soon after their enactment? Does this practice uphold the stability and reliability of laws, as pointed out by General Secretary To Lam?

The ability of businesses to foresee changes in government regulations has decreased over the years. In 2013, about 14.29% of businesses could predict such changes; this has now dropped to under 5%. Furthermore, only around 6% can foresee the local implementation of these regulations. Many businesses experience challenges in acquiring conditional licenses, with high hidden costs affecting 61%, and 22% having to delay or abandon business plans due to licensing issues (Source: PCI Report).

Mr. Duc, as a lawyer and entrepreneur familiar with investor concerns, particularly foreign investors—what’ve been your experiences? As a member of the National Assembly’s Economic Committee, I often heard foreign investors express unease about the unpredictability of our legal system, which hinders their planning.

Who bears responsibility for this? It’s not merely a matter of platforms or resolutions. For instance, while the land resolution is comprehensive, the Land Law (2013) falls short of its intent.

Institutions arise from human actions and organizations. Without adept legislative bodies to craft sound laws, we risk creating substandard regulations. I can assert this confidently.

My nearly 40 years in the National Assembly has led me to observe many laws crafted in a haphazard manner. We demand professionalism from the 500 deputies of the National Assembly, but this is a tall order, Ms. Chi Lan.

The National Assembly must comprise specialized and professional deputies. Currently, only 40% of the 500 deputies serve full-time and not all can be considered truly professional. Law-making demands systematic approaches and methods.

We confront various issues here.

Draft law responsibility rests with ministries, which can marshal the required resources, resulting in departments drafting laws addressing perceived necessities for regulation.

The aim is a National Assembly with 40% full-time deputies. While many members possess esteemed credentials—professors, PhDs, leading minds—their legislative experience often lacks depth.

This underscores why National Assembly Chairman Tran Thanh Man asserts that the quality of legislation is tied to the ministerial drafting agencies. Indeed, the committees have limited capacity, with only around 40 members, making it impossible to oversee the extensive legislative landscape adequately. The primary role of these committees is to refine proposed laws and ensure the public’s voice is echoed in the legislative process.

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Transforming Low-Quality Draft Laws: Key Insights

Chairman Tran Thanh Man emphasized that only skilled lawmakers and a proficient legislative process can create high-quality laws. There’s a pressing need for competent entities and individuals who can effectively analyze and develop legislative policies.

Current practices reveal that National Assembly members are still engaged in painstakingly revising every detail of laws, often working tirelessly, even on weekends. One representative expressed frustrations at being expected to handle excessive workloads despite limited resources.

General Secretary To Lam has urged a shift away from the prevailing survival strategy of ‘if it can’t be managed, ban it.’ Ms. Chi Lan sought guidance on how to design policies in line with this principle, questioning whether laws should emphasize preemptive checks or post-implementation evaluations to fulfill regulatory duties while fostering market growth.

This pervasive mindset reflects a fundamental misunderstanding of the state’s role within a market-driven economy. In the era of subsidization, the government wielded unchecked power. However, transitioning to a market economy necessitates clear definitions of the roles played by the state, the market, and society.

The government’s focus should remain on its proper functions, avoiding the confusion of its responsibilities with those of market participants or society. The misinterpretation that the state should oversee and regulate all elements of economic and social life fuels the “if it can’t be managed, ban it” mentality.

The Constitution outlines clear powers, duties, and mechanisms available to the state, emphasizing that it can only act within the limits provided. There is a worrying tendency for laws to predominantly focus on citizen obligations while inadequately addressing the state’s powers.

Unlike other nations, where public servants act only within the confines of prescribed duties, citizens should enjoy freedoms outside the law’s prohibitions. Thus, the state’s misperception leading it to assume authority over every aspect is detrimental.

Considering checks and balances, preemptive measures often result in unnecessary restrictions on businesses and citizens before they commence their operations, rendering such steps ineffective. Genuine compliance can only be evaluated post-implementation, revealing the flaws in pre-emptive checks.

In contrast, post-implementation evaluations are grounded in real evidence and enable appropriate state responses, whether through penalties or guidance for compliance.

We have offered incentives like reduced taxes and lower land rents to attract foreign direct investors (FDI), with investors pledging to create jobs and boost exports. However, breakdowns often occur in fulfilling these commitments, only coming to light during follow-up evaluations, which may limit effective penal measures.

Therefore, moving from preemptive to evaluative checks is crucial.

The law-making responsibility lies with the National Assembly, while the Government implements these laws. The Government should suggest policies based on real needs, and the National Assembly should transition these ideas into actionable laws, promoting higher standards of legislative professionalism.

When ministries and divisions draft laws, this often leads to the incorporation of special interests. Mere review and addition from the National Assembly is inadequate; there must be clear accountability in law-making. One notable instance involves Ms. Tran Thi Quoc Khanh’s draft law, which ultimately did not receive approval.

As a representative from VCCI providing legal insights, what are your thoughts on the assertion that “Institutions are the bottleneck of bottlenecks”? Are there real-world examples illustrating this view?

The current real estate pricing issue sees many experts attributing rises in costs to market dysfunction or speculation. However, this is an oversimplified narrative. Given that project development often extends over several years, it’s essential to view prevailing prices in context, as they can reflect natural market adjustments.

To effectively tackle this situation, we must enhance supply to meet demand instead of merely controlling land auction prices. Auction dynamics naturally raise prices; therefore, to stabilize them, increasing land availability is crucial. Unlike countries with limited land resources such as Singapore or Hong Kong, Vietnam still has ample areas prime for development.

The core issues within the real estate market primarily stem from institutional barriers and policy shortcomings. The Ministry of Construction has noted about 1,200 housing projects entangled in legal disputes, significantly restricting the real estate supply.

Current regulations require residential projects to include a specific ratio of residential land from the outset, a fundamentally flawed requirement. For instance, developments like Ecopark and Ocean Park are emerging from agricultural land, lacking residential areas to satisfy demands. Long-standing projects in bustling districts of Ho Chi Minh City similarly face unresolved legal challenges, complicating matters for both the community and businesses.

When housing costs escalate, the government should intervene to lower prices without resorting to excessive audits, which could inadvertently contribute to further price surges. Bureaucratic bottlenecks forcing project halts create a cycle of stalled transactions and inflated property costs.

The current institutional constraints regarding land and housing are already detrimental, posing risks to the economy that may worsen if unaddressed. They directly affect expenses, market pricing, job availability, and business and citizen operations.

In real estate, acquiring legal permits is paramount, directly linked to institutional frameworks. Thus, reforming regulations—not investigations—is essential, as the market requires proactive solutions. Immediate actions to eliminate these institutional impediments are critical.

General Secretary To Lam’s recognition of institutions as the core bottleneck stems from a collective failure; it is our responsibility. Since we shape these institutions, reform must start with a shift in our collective mindset.

Ultimately, success hinges on awareness, structure, and practices among those involved in institutional creation.

Change cannot happen on its own; it takes human initiative. The pressing challenge lies in identifying the right talents capable of establishing institutions suitable for modern needs.

As we contemplate actions to enact the General Secretary’s directives, this represents a pivotal chance for comprehensive engagement across all sectors in institutional reform, a vital step toward overcoming hurdles to Vietnam’s progress and economic advancement.

Concrete initiatives are necessary to ensure the General Secretary’s message resonates throughout all levels of governance and society.

Apart from land-related challenges, businesses are also hindered by an overwhelming 16,000 “sub-licenses,” which are significant operational constraints.

The 1999 Enterprise Law had successfully reduced these licenses to fewer than 200, yet the number has skyrocketed over time to 16,000 today.

Institutional reform has been a recurring strategic focus in the Party Congresses XI, XII, and XIII. The General Secretary has rightly emphasized this area as crucial for breakthrough developments. I sincerely hope for rapid progress that builds societal confidence and enthusiasm.

In summation, our roundtable has delved into three essential themes: harnessing national resources for growth, cultivating a competitive market economy, and advancing institutional reforms.

We anticipate that these discussions have facilitated meaningful insights and policy recommendations aimed at our nation’s prosperity. While numerous other topics warrant attention, we conclude our dialogue here due to time limitations.

Thank you to our distinguished guests and our VietNamNet audience. We look forward to future engagements to discuss other significant issues. Thank you!