Vietnam’s private economy resolution requires different implementation approach: economist

Resolution 68-NQ/TW, issued on May 4, 2025 by the Politburo - the country's supreme decision-making body, introduces breakthrough perspectives on the position and role of the private sector, says Dr. Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM),

What is your impression of Resolution 68? Which parts in the resolution impressed you the most?

Resolution 68 is a long-waited one for me. Many of the contributions from myself and other experts have been incorporated into this resolution.

My first impression is that the resolution accurately assesses the role, position, and contributions of the private economic sector up to now, and especially its importance for future socio-economic development.

Secondly, the resolution outlines a set of relatively comprehensive, synchronized, and determined solutions. These solutions essentially address two fundamental issues facing the private sector: businesses that do not want to grow, and those that cannot grow.

Among the solutions, I am particularly impressed by the one stating that “economic and civil relations should not be criminalized.” This has long been a sensitive issue, rarely discussed and not fully or thoroughly addressed in previous recommendations.

This resolution presents fairly complete and specific measures to avoid criminalizing civil economic activities. This is the solution to enhance the effectiveness and efficiency of inspections and audits without negatively impacting businesses.

Notably, a previously introduced solution at the government level has now been elevated to the level of a Politburo resolution: each enterprise is to be inspected only once per year.

I find this particularly impressive because, for a long time, as businesses expand in scale and enter multi-sector operations, they feel unsafe and face legal risks. This leads to hesitation, caution, and even the decision to cease or avoid expanding their business activities.

Resolution 68 sets a specific target of 2 million enterprises by 2030. Given that we have missed previous targets like 1 million businesses, do you believe this goal is achievable?

In fact, we have set similar goals before. Previously, we aimed for 1 million businesses by 2020, but even by 2025, we haven’t reached that mark. Then we set a new goal of 1.5 million businesses by 2025.

Clearly, we have not achieved the targets we set. And it’s important to note that these targets refer to active businesses, not just those registered.

With the 2-million-business goal by 2030, we would need to add 200,000 new enterprises each year. This would require annual growth rates of 20% in the first year, around 16% in the second year, 14% in the third year, and over 10% in the final years. Meanwhile, our current growth rate is only 3-4%, or even negative.

Achieving this target requires a comprehensive implementation of all measures to improve the business environment, facilitate enterprise operations, improve access to capital, land, and technology, as well as support product distribution.

In short, to have 200,000 new businesses annually, we must thoroughly reform market entry procedures and business registration processes. We must create a business environment that is truly favorable, secure, and reliable for enterprises.

As Party General Secretary To Lam has stated, we need a business environment that enables everyone and every business to participate in production and contribute to creating values for society.

Therefore, learning from past experiences, this time we must assign a specific ministry or agency to be accountable for implementing the resolution’s goals, with personal accountability tied to the outcomes.

For instance, if we need 200,000 new businesses annually, that means we must have 17,000 new companies each month. This assigned body must assess progress monthly, quarterly, semi-annually, and annually.

Based on these assessments, the agency must draw conclusions as to why business formation targets are not being met, why businesses leave the market, and submit solutions and recommendations to higher-level authorities if the issues go beyond its authority.

Resolution 68 requires a very different approach. Do you think it’s realistic to implement the method you just proposed?

Resolution 68 outlines both high-level goals and concrete solutions, with ambitious targets that must be achieved within a relatively short time frame. This places tremendous pressure on the government and the entire administrative system responsible for executing the resolution.

However, I still feel that while we have clear goals and solutions, the implementation method has not changed enough to convince people that we can truly create a breakthrough, fundamental transformation in such a short time.

In my view, the implementation is still following the traditional path: the government, National Assembly, ministries, and local authorities issue action plans. This still relies heavily on the state administrative apparatus. As we’ve seen, this approach is slow as action plans can take 3 to 6 months to be developed.

For example, in reviewing for removing business conditions and eliminating bottlenecks, the current practice is that ministries conduct the review. I believe this cannot eliminate inherent biases, entrenched perspectives, or even vested interests. It lacks objectivity, independence, and consistency in reforming the resolution implementation.

Instead, I believe the approach must be top-down, much like the streamlining of the state apparatus we’ve seen before. Implementing Resolution 68 should be seen as a regulatory reform revolution.

This means eliminating many unnecessary legal documents - many of which are filled with outdated “ask-give” administrative procedures - and shifting from pre-inspection to post-inspection. That would be a true breakthrough change in the institutional system as well as in how the government manages the economy.

The government should also establish a special task force, composed of experienced, independent experts who are passionate and knowledgeable about legal and institutional reform. This task force should also include business representatives and report directly to the Prime Minister.

Its mission would be to objectively review and assess current regulations and business conditions, ensuring transparency, practicality, and alignment with the real-world business environment. Only through this process can we provide accurate data and recommendations that truly support private sector development.

If we do this right, I believe we could complete the regulatory review and elimination of business conditions by the end of 2025, thus cutting compliance costs and improving enterprise development efficiency.

Now, we say we’ll remove 30% of business conditions or reduce compliance costs by 30%, but no one really knows what that 30% refers to. Only an independent review with clear criteria can provide an accurate, objective, and consistent assessment. That’s when reform proposals will align with the requirements of institutional reform for promoting development.

We must break from traditional approaches. If we stick to the old ways, we will miss our targets and worse, miss a key development opportunity for the country.

Instead, we need to stay proactive, listen to feedback, and come up with innovative, effective methods. The National Assembly and relevant agencies must engage more deeply in discussion to ensure efficient implementation.

We can make corrections as needed. I believe that with strong political will, effective organization, and a synchronized set of solutions, the goals of Resolution 68 can be achieved.

At the legislature’s ongoing session, a special resolution on private sector development should be issued to remove legal barriers facing thousands of current investment projects. Eliminating these bottlenecks will unlock large resources and drive growth this year and beyond.

This is an essential solution that could determine the success of our development targets and boost confidence in the feasibility of Resolution 68.

We need a new approach, a reformed method of action - not just theoretical promises, but bold, reliable actions. The government must lead in proposing reforms, while the National Assembly passes laws and policies based on practical recommendations. Clear accountability for each individual and agency in the policy process is crucial.

I hope that since Resolution 68 reflects a new way of thinking, our method of implementation must also change accordingly so that the private sector can truly become the most important engine of the national economy, as the resolution emphasizes.

Given this context, do you have any suggestions for the business community and investors to seize the opportunities available?

I don’t think the state can or should intervene too deeply in business operations. Enterprises are intelligent entities. What’s most important is to create opportunities and enabling conditions for them to grow.

To scale up effectively, businesses cannot continue investing haphazardly or managing operations in the old, unscientific way. Instead, they must adopt professional and systematic management, and use advanced technology.

This requires managers and investors to continuously learn and change their mindset to keep up with development trends and evolving economic landscapes.

Only then can we take full advantage of long-term growth opportunities rather than short-term gains. At the same time, responsible business practices must be a top priority. Businesses should not only pursue their own profits but also consider their social responsibility - treating their assets as those of the community and the products of society.

Entrepreneurs need a spirit of service, passion, and a mindset of contributing to the common good. When enterprises grow sustainably with that mindset, then development itself will be sustainable.