Vietnam’s socialist-oriented market economy has been operating according to both the market mechanism and administrative regulations.
In early 2010, while the world economy was still in a fix to bounce back, the Vietnamese Party, National Assembly and Government worked out solutions to help the national economy recover from the global economic slowdown.
Methods included tightening public expenditure, implementing a stimulus package, increasing exports, encouraging domestic consumption, and improving social welfare, which helped stabilize the country’s socio-economy.
Over the past year, the prices of gold and foreign currency have seen fluctuations due to not only the world’s law of supply and demand but also speculation and rumours in the domestic market.
To deal with the problems, the State bank of Vietnam (SBV) introduced effective policies to clean up the gold trading market by allowing gold import, reducing gold import taxes, adjusting exchange rates, and publicizing the national foreign exchange reserve. These policies helped reduce the gold price instability and stabilize the price of foreign currency.
At the end of the year, while the Government is making every effort to curb inflation, many commercial banks joined a race to increase interest rates, creating a more complicated situation in the banking sector.
In response to the banks’ decisions, the Government and SBV imposed administrative measures to control the race. The Ministry of Finance and Industry and the Ministry of Industry and Trade also took the initiative to control prices by deciding not to raise prices of coal, electricity, petrol and oil until the Lunar New Year Festival.
Over 2010 many lessons were learned from the management of the socialist-oriented market economy.
Firstly, the socialist-oriented market economy offers an option for the Government to use policy to intervene in specific economic issues, making the economy more transparent, in accordance with the law of supply and demand. All experts and strategists need to do is to analyse the situation and propose effective measures to the Government.
Secondly, as important social and political events are about to take place in Vietnam and the Lunar New Year Festival is drawing near. Vietnam needs to be more active in stabilizing prices and introducing administrative measures to prevent price fever.
Thirdly, the Government should keep a close watch on the market to introduce proper policies. For example, the price-stabilising fund should be used to help businesses reserve commodities to meet consumer demand in both urban and rural areas.
Fourthly, the market management policies should be transparent and consistent to enhance social unanimity.
Lastly, Vietnam should uphold the active role of mass media to help stabilise the market by providing information and analyzing the market situation, as well as pointing out the deception of those who want to play on the market. This will also help minimize the negative impact on the market created by the mass media.
Despite being adversely affected by the world’s economic downturn and Europe’s debt crisis, Vietnam is expected to see a significant economic growth rate in 2010 with foreign investment remaining high. These achievements are attributed to the State’s effective management of the economy based on the law of the market.