Jan. 24 (Bloomberg) -- Vietnam will amend its constitution to allow for changes to the economy, as it seeks to extend the growth dividends of a shift from Soviet-style central planning to a market-oriented model more than two decades ago.
The goal is to ensure synchronized political and economic change, Deputy Minister of Justice Hoang The Lien said in a question-and-answer session on the draft revisions, according to a transcript on the government’s website. Adjustments will be made in articles on the economy, education, environment and culture, according to Nguyen Van Phuc, deputy head of the National Assembly’s Economic Committee and the team drafting the amendments, the second set since a new constitution in 1992.
“The 1992 constitution was built when we were at the start of the economic reform process,” Lien said. “The 1992 constitution targeted economic changes, with an important switch from a centrally-planned economy to a market-oriented economy. We obtained great developmental achievements in the past 20 years. In reviewing the past 20 years implementing the 1992 constitution, we realized that there are still many issues.”
Once Southeast Asia’s fastest-rising destination for foreign investment, Vietnam’s expansion has eased since the early boom from the 1986 “Doi Moi” economic renovation that allowed private business. The Communist Party government has pledged to restructure banks, curb corruption and reorganize the public sector as the country loses out to faster-growing rivals such as Indonesia in recent years.
Vietnam must accept “low” economic growth while it restructures its economy and should aim for annual expansion of at least 5 percent, according to President Truong Tan Sang. The economy expanded 5.03 percent in 2012, the slowest pace in 13 years, as a slump in bank lending damped domestic demand, adding pressure on the government to revamp the financial system and attract more foreign investment.
A draft of the revised constitution removes language stipulating that the state sector will “assume the leading role” in the national economy.
“It shows a huge advance and change in thinking,” said economist Le Dang Doanh, who has advised Prime Minister Nguyen Tan Dung. “If it’s approved, there’ll be no ground for state enterprises to continue being overly pumped with state money and receiving special treatment.”
The draft also indirectly acknowledges the role of the private sector.
“Vietnam’s economy is a socialist-oriented market economy with many forms of ownership and economic sectors,” according to the draft. “All economic sectors are important components of the national economy, and together, will be developed in the long term,” operating equally and competitively under the law, according to the draft, which was posted on the government website for public feedback this month.
The revised constitution will include an emphasis on human rights and citizens’ rights, Phuc said, according to the transcript released on the government’s website yesterday. Changes to the constitution will provide the “political premise for economic development,” Lien said.
The draft amendments will be submitted to the National Assembly for approval following public consultation. The assembly will complete the revised constitution draft by March 31 and it will be discussed at the next legislative meeting in May. A final version will be reviewed and approved at the end of the year, Nguyen Si Dung, the National Assembly’s deputy chief administrator, said by phone today.
--Nicholas Heath, Nguyen Dieu Tu Uyen, K. Oanh Ha in Hanoi. Editors: Stephanie Phang, Rina Chandran