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Comment on “Has Nguyen Phu Trong's Leadership Curbed Economic Reform? Economic Reform Trends in Vietnam”
Author(s) -
Fujita Mai
Publication year - 2020
Publication title -
asian economic policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.58
H-Index - 20
eISSN - 1748-3131
pISSN - 1832-8105
DOI - 10.1111/aepr.12308
Subject(s) - vietnamese , politics , government (linguistics) , communism , state (computer science) , political science , private sector , nexus (standard) , authoritarianism , public administration , economics , political economy , economic growth , democracy , philosophy , linguistics , algorithm , computer science , law , embedded system
Sakata (2020) explores the nexus between authoritarian political leadership and economic reforms in Vietnam during Nguyen Phu Trong’s second term as General Secretary of the Communist Party of Vietnam (CPV), which started in 2016 and will end in less than a year. Sakata’s paper is a timely contribution as it provides a concise and informative analysis of recent developments in Vietnam’s political economy and explores their broader implications. My comments in particular focus on the rise of large private enterprises which received particular attention in Sakata’s paper. This is a new development, which contrasts with the traditional structure of the Vietnamese economy, in which large enterprises in strategic sectors were predominantly stateowned. It is also significant because of the implications it might have for the evolving relationships between the party-state and businesses in Vietnam. In an attempt to explain this development, Sakata (2020) presents the “pragmatic national champion strategy” argument, whereby preferential treatment, formerly provided by the Vietnamese government to a limited number of state-owned enterprises (SOEs) in key economic sectors, started to be applied to private enterprises selected by the CPV. To start with, whether the concept of “national champions,” which refers to a particular group of enterprises targeted by the government to lead the development of specific strategic industrial sectors, as was observed typically in Japan and Korea, is suitable for describing Vietnamese policies towards large state-owned conglomerates in the pre-2016 period may require deliberation. It is worth recalling that the roles that large state-owned conglomerates have been expected to serve in the Vietnamese economy were multifaceted. While a number of state-owned conglomerates, typically those in shipbuilding and textiles, provide examples of SOEs nurtured to lead the development of strategic industries, numerous other SOEs were expected to serve a range of other purposes such as the provision of essential goods, macroeconomic stabilization, social and regional development, and national security. Moreover, neither of the typical cases mentioned already ended up as “national champions” in practice because the party-state failed to exercise sufficient discipline over the enterprises.