Experts concerned about state monopoly
  • By Nguyen Tuyen | | August 18, 2017 05:56 PM
The government needs to explain why a state monopoly will be applied to the production and trading of up 20 goods and services, particularly in the context when many Vietnamese state-owned enterprises face losses, said some local experts.

The government has issued a decree declaring the state will hold the monopoly in the production and trading of 20 goods and services as from October 1 this year.

The list includes goods and services used for defence and security; production, trade, import-export and transit transport of industrial explosives; management and development of national and urban railway infrastructures invested by the State, exclusive of maintenance services; management and development of inter-provincial, inter-district irrigation and water supply systems for agriculture, and sea embankments; publishing, exclusive of printing and distribution activities.


Dr. Luu Bich Ho (left) and Le Dang Doanh (right)

According to Dr. Le Dang Doanh, former head of the Central Institute for Economic Management, the government needs to clearly explain why the state monopoly will be applied to these sectors.

"It is necessary to specify which among goods and services used for defence and security purposes to require the state monopoly. Many countries in the world still hire private companies to produce military clothes and footwear, so is it compulsory for Vietnam to ban private firms in this? Is it sure that state-owned companies will do this better than private ones?” Doanh said.

Dr. Luu Bich Ho, former head of the Ministry of Planning and Investment’s Development Strategy Institute, many countries have private firms which specialise in military weapon products; however, it is impossible for Vietnam to do the same at present. He noted that, but in Vietnam, military uniforms or some kinds of security equipment can be produced by private companies.

Ho disagreed with banning private companies from publishing, exclusive of printing and distribution activities, saying that this may hamper the information freedom in the context of the strong development of the internet.

Regarding the state monopoly in the management and development of national and urban railway infrastructure, Doanh raised the question that why private companies are allowed to invest in road, airport and maritime shipping projects, but banned from the railway sector? In reality, the railway sector’s competitiveness is much lower than road and aviation.

Vietnam has 3,143km of railways, but large parts of this were very out of date. In 1995, the railway sector accounted for up to 11.7% in the country’s total transport of passengers and 7.9% in cargo transport; and the rate fell to 3.2% and 1.9% respectively in 2014.

It is essential to re-consider and then announce which of each among the 20 mentioned-above goods and services should use state monopoly, Ho suggested.

“Why private companies are banned from railway projects when Vietnam is facing the investment capital shortage for infrastructure development?” Ho questioned.

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