Identifying and criticising the wrong viewpoints on Viet Nam’s socialist-oriented market economy

At the 6th National Congress of the Communist Party of Viet Nam (CPV), reviewing the implementation of local and partial renovations towards the removal of the centrally planned subsidised economy and the expansion of market relations, our CPV had advocated the consistent and long-term adoption of the policy on developing a socialist-oriented, multi-component commodity economy under the management of the State, which was later confirmed by its 9th National Congress as the socialist-oriented market economy.

That guideline marked a fundamental turning point in the CPV’s thinking and perception of socialism and the path towards socialism in our country. Since then, our Party’s awareness of the socialist-oriented market economy has been supplemented and developed in accordance with the requirements set by reality. At the 13th National Congress, our Party stipulated that “the socialist-oriented market economy is our country’s general economic model in the transitional period towards socialism. It is a modern, globally-integrated market economy fully and synchronously operating according to market economy rules, managed by the socialist rule-of-law State, led by the CPV, ensuring the socialist orientation for the sake of a wealthy people, a powerful country, democracy, equality, civilisation in accordance with each development period of the country”. This can be seen as the result of 35 years of national renovation, the development of theories throughout the past 7 national party congresses, and the reflection of our Party’s consistency and increasingly clearer and more sufficient understanding of this issue. The achievements in 35 years of national renovation have proved the soundness of the policy on socialist-oriented market economy development in Viet Nam. However, hostile forces and political opportunists both at home and abroad try to distort this policy with their wrong viewpoints which can be identified and grouped as follows.

First, hostile forces hold that there is no socialist-oriented market economy, and that the socialist-oriented market economy model is a subjective ascription and combination. According to them, market economy and socialist orientation are conflicting elements like “water” and “fire”.

Second, hostile forces argue that the CPV accepts market economy development as “pivot to capitalist development”, adding that the CPV is “giving up the goal of building socialism, abandoning the Marxist-Leninist fundamentals relating to socialism” like “speaking one way and acting another”.

Those wrong viewpoints are derived from misunderstanding between market economy and capitalism when hostile forces believe that “market economy is the product owned by capitalism only”, and that “market economy runs on principles of capitalism in contrast to socialist orientation”. As such, they demand our Party to publicly select the capitalist market economy model; in fact, they ask the CPV to give up the path towards socialism and move our country forward to capitalism.

The book about the socialism and the path towards socialism written by Party Chief Nguyen Phu Trong

It is necessary to be fully aware that the equation of market economy with capitalism as the particular product of capitalism by hostile forces and political opportunists are totally wrong in terms of both theory and practice. Theoretically, market economy is a high developed stage of commodity economy when the input and output of the production process are carried out through the market. Market economy is just an economic structure which was created by human society, existed in different social regimes, and have been employed as the foundation for capitalism’s existence, movement, and development. It is the development of productivity to a certain level that gives rise to objective conditions for commodity economy as the starting point of the existence of market economy. More specifically, it is the division of social labour and different means of production. Those above-mentioned conditions had existed prior to capitalism and will continue to exist in socialism; therefore, maintaining and developing a market economy nowadays in our country are in compliance with the principles of moving forward to socialism from a small-scale production bypassing the stage of capitalism; it is no “pivot to capitalist development”. The reason is that market economy is an inevitable stage of development from a small-scale production to a large-scale one. Bypassing capitalism is to “ignore the oppressive, unjust, and exploitative capitalist regime, to ignore bad practices and political institutions unsuitable for the socialist regime, not to ignore the achievements and civilised values gained by human race in the period of capitalist development”, including the achievements in market economy development.

Practically, in the early years of building socialism in the Soviet Union, V.I. Lenin soon realised the mistake of equating commodity economy with capitalism without using market relations to encourage production and improve the people’s life. Therefore, he formulated and implemented the “New Economic Policy” (NEP) which focused on maintaining and developing market relations under the management of the proletarian State. Thanks to the NEP, Russia quickly overcame its economic – social crisis in the 1920s, which also helped assert the practicality of an economic model with the harmonious combination of market economy and socialism. Theories of commodity economy development in the implementation of the NEP are a brilliant contribution of V.I. Lenin to the development of Marxism with reference to the building of socialism in countries with underdeveloped economies. Applying those legacies, in the late 1970s and 1980s, based on their own practical situation, China and Viet Nam carried out “reform”, “renovation” with the maintenance and development of market economy, thereby bringing about positive results that allowed the gradual realisation of socialism-related goals in each country.

The implementation of the policy on socialist-oriented market economy development over the past 35 years has enabled Viet Nam to obtain tremendous achievements of historic significance. Viet Nam has escaped the situation of economic underdevelopment and become a middle-income developing country.  Viet Nam’s economic size and potential have been increasingly developed, increasing from 6.3 billion USD in 1989 to 409 billion USD in 2022, being the 37th largest economy in the world, ranking 5th within ASEAN, reaching the top 14 Asian countries. Its people’s living standards have been considerably improved. The per capita income in the beginning years of national renovation was just about 250 USD per annum, but in 2022, that figure was 4,110 USD, ranking 5th in ASEAN. The rate of poor households was drastically reduced from 58% in 1993 to below 3% in 2020 according the multidimensional poverty line, allowing Viet Nam to be recognised as one of the leading countries in the implementation of the Millennium Development Goals by the United Nations. Viet Nam has also witnessed positive cultural-social developments; socialist democracy has been unceasingly expanded. Due attention has always been paid to ensuring social security even in the context of the global economic downturn or Covid-19 pandemic. Political and social stability has been maintained; defence and security have been strengthened; national independence, sovereignty, unification, territorial integrity and socialist regime have been safeguarded; foreign relations have been increasingly expanded and deepened. The national economy has both widely and deeply integrated into the world market and step by step adapted itself to the world market’s rules and standards. Becoming a member of the World Trade Organisation (WTO) and more than 500 bilateral and multilateral agreements in various fields, including 17 new-generation Free Trade Agreements (FTA) with high-level commitments on trade liberalisation and sustainable development (relating to labour and environment protection) has proved that Viet Nam’s economy has increasingly adapted itself to the conditions of a modern, globally-integrated market economy, turning it into a highly open economy with a trade to GDP ratio of up to 200 per cent. That fact is evidenced by impressive figures; between 1986 and 2005, the total export and import volume reached 20.7 billion USD per annum, but it was 732.5 billion USD in 2022 alone. The trade balance has been transformed from trade deficit into export surplus for 7 consecutive years since 2016; in 2022 only, export surplus reached 11.2 billion USD. Viet Nam’s national brand value (announced by Brand Finance – the world’s leading brand valuation consultancy) has constantly grown strongly. That value was just 274 billion USD in 2019; however, in 2022 it was 431 billion USD, which was considered as the world’s fastest growth rate (74%) between 2019 and 2022.

Things mentioned above prove that the benefits gained from market economy development are in accordance with our people’s socialism building cause. Instead of going against socio-economic tasks set by the transitional period towards socialism, market economy development facilitates the performance of those tasks. However, we have not selected a capitalist market economy; we have decided to develop a socialist-oriented market economy. “It is a new market economy model, which both conforms to market economy principles, and is based on and guided by principles and nature of socialism in terms of the ownership, management organisation and distribution. This is not a capitalist market economy and has yet to become a full-fledged socialist market economy yet”. In other words, it is a market economy of the transitional period towards socialism. That economy is comprised of many ownership types and economic sectors which co-exist equally before law, but the State-owned sector plays the vital role and acts as an important instrument and material force for the State to maintain macroeconomic stability, orientate, regulate, steer, and foster socio-economic development, and uphold socialist orientation. The socialist-orientated market economy is a “modern market economy” regulated and operated by the “hand” of market mechanisms combined with the “hand” of the State which is a socialist rule-of-law one, under the leadership of the CPV. The distribution regime is carried out mainly according to production fruits and economic efficiency together with the contributed capital and other resources; it is also conducted via the social security system. Due regard is paid to social progress and equality right in each step, each policy and during the development process; economic policies are always closely connected with social ones. Each economic policy must be aimed at social development, while each social policy must give an incentive to economic development. Legal enrichment must go hand in hand with sustainable hunger eradication and poverty reduction as well as good care of people with meritorious services to the revolution and people in difficulty. Those are stark differences between socialist-oriented market economy and capitalist market economy.

After 37 years of renovation, thanks to the efforts made by our entire Party and people, the socialist-oriented market economy with those above-mentioned particularities has gradually been formed and developed. “The globally-integrated modern, fully socialist-oriented market economy institution has step by step been established”. “The system of laws, mechanisms, and policies continues to be perfected in accordance with the building of a modern and globally-integrated market economy. Market elements and types have been gradually developed in tandem with regional and global markets”. Most of the commodity prices have been set under market principles. The State’s role has been adjusted to be more appropriate to market mechanisms. Mobilising and distributing resources in line with socio-economic development strategies and plans have been more relevant to market mechanisms. The investment and business environment has witnessed considerable improvements.

Those above-mentioned advances have helped Viet Nam to be recognised as a fully market economy by 90 countries

Developing a socialist-oriented market economy represents a very basic and creative theoretical breakthrough of our Party. The successfully implementation of that policy will contribute to supplementing and developing Marxism-Leninism on socialism and the path towards socialism in countries with underdeveloped economies; at the same time, it will be convincing evidence against all distortions of hostile forces.

NGUYEN NGOC HOI