The Vietnamese Communist Party debate and the leading role of the state sector : ideological straight-jacket, vested interests or real social progress?

Abstract

Discussion of 'economies in transition' often assumes movement from socialist planning to free market capitalism. Vietnam has moved significantly in this direction, but the Communist Party of Vietnam (CPV) claims the long-term transition is to a higher form of socialism than in the past. CPV cadres list a variety of aspects that differentiate their 'socialist-oriented market economy' from a 'capitalist market economy'. What this orientation consists of, and whether there is anything "socialist" about it, is however much debated. This dissertation focuses on the state-owned enterprises as one way to assess whether any authentic socialist orientation exists. It finds considerable complexity in state enterprises, so the assessment is not straight forward. But the complexity includes significant socialist substance. Their decisions regarding investment or profit distribution are not purely commercially driven, and their purported "inefficiency" is often connected to socially beneficial activity, not only for their own workers but within society at large. This helps explain the stubborn tenacity of the state sector, despite years of "liberalising" legislative changes. This is not merely elites who "oppose reform" due to their vested interests. Significant sectors of society also have an interest in opposing the kind of "reform" that would be detrimental to their interests and the social good overall. These conflicting pressures on and in state enterprises are reflected in the debates within the CPV about socialist orientation. One central feature of this orientation is that public forms of ownership must predominate even while capitalism forms part of the economy. But challenging this is a minority who blur the distinction between the socialist-oriented and a capitalist market economy. These two broad tendencies are often labelled "conservatives" and "reformers," implying a value judgement. I propose to rename them the Socialist-Orientation Tendency (SOT), and the Market-Orientation Tendency (MOT), signifying opposing emphases within the "market economy with a socialist orientation" equation. They do not represent hard and fast factional groupings, but rather tendencies of thought; many cadres incorporate elements of both, and both have sprouted sub-tendencies. The role of the state enterprises is often central to the debate between these tendencies and among analysts of Vietnam's political economy. Much has been written showing that they fall short of their socialist purpose. That they allegedly have little relation to social progress is often seen as evidence that the Socialist Orientationists are merely elite ideologues or corrupt officials who use the socialist label to cover their intransigence or malfeasance. This dissertation takes issue with this view.