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Friday, 22 January 2016 14:53
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Issues of ownership of production means in Vietnam over 30 years of renovation

(LLCT) - From the 6th Congress upto now, the Communist Party of Vietnam (CPV) has constantly made new progress in awareness of the important position of the issue of ownership and diversification of ownership forms in the socialist-oriented market economy. The National Party Conference in the middle of the 7th tenure has determined ownership and production relations are components of the socio-economic form. Thus, establishing mastership of the means of production is foundation, goals and means for building a new society.

 

 

 

Karl Marx wrote: “Every so-called political revolution revolution, from the first to the last, have been made to protect ownership of one kind”(1).

1. Awareness of the issue of ownership of the means of production

Regarding position, forms of ownership in the socialist-oriented market economy

From the 6th Congress upto now, the Communist Party of Vietnam (CPV) has constantly made new progress in awareness of the important position of the issue of ownership and diversification of ownership forms in the socialist-oriented market economy. The National Party Conference in the middle of the 7th tenure has determined ownership and production relations are components of the socio-economic form. Thus, establishing mastership of the means of production is foundation, goals and means for building a new society.

In building the economic model in the renovation period, the Party has determined: “Developing the socialist-oriented market economy with various forms of ownership and many economic sectors”(2). According to the 11th Congress, there are the forms of state ownership, collective ownership, private ownership and mixed ownership in Vietnam. Diversification of ownership forms in the economy has important meaning for forming and developing various businesses types, optimally promoting potential and strength of owners, and enhancing efficiency in the use of development resources. Therefore, there will be created competition in the economy, which is the driving force of socio-economic development.

On the nature of ownership relations

Ownership is relationship between people in possessing social wealth and is the social form of appropriation acts in given certained socio-economic forms. Connotations of this relationship have identified not only owners of the means of production, but also users, rights of management organization, administration and distribution of benefits among the involved economic entities. All these issues must be implemented according to economic and legal relations.

When economic relations are governed by the law, they will become legal relations, that is the State has officially recognized ownership and use right and economic interests of holders of the means of production and generated labor results. The establishment of legal contents of ownership creates a solid foundation as a basis for ownership relations in particular and socio-economic relations in general. This is an important prerequisite for sustainable development, good balance of interests among entities in society.

Institutionalization of ownership relations has created the rights of ownership, use, disposal, regulation and rights of implementing economic benefits, etc. The two most basic right groups are ownership right and use right. During the renovation period, these two groups may be relatively separated in various economic entities. This issue is addressed in the 7th National Congress of the Party : “Amending and supplementing necessary mechanisms and policies to correctly handle the relationship between ownership right and use right, between the State and state-owned enterprises”(3). The separation of ownership right and use right expresses more profound awareness of nature of ownership relations.

2. The ownership change of the economy in the renovation period

The process of diversifying forms of ownership of the means of production.               

Diversification of ownership forms of production means is a consistent ideology during nearly 30 years of renovation. Proceeding from the basic forms of ownership (whole - people ownership, collective ownership and private ownership), there have been formed so far four economic sectors: state economic sector, collective sector, private sector and the economic sector with foreign investment, creating abundance organizational models of production and business, bringing new life to the economy. The process of diversifying ownership forms of the means of production has contributed to the strong development of productive forces. GDP growth rate in nearly past 30 years is relatively high and stable: annual average GDP growth rate was 5.6% (1986-1990); 7.5% (1991-2000); 7.26% (2001-2010); 5.61% (2011-2013). Per capita income has increased from 86 USD (1988) to 2,050 USD (2014)(4). Vietnam has escaped from the group of poor countries with low income and was classified among the middle income countries. The structure of economic sectors towards being modern (the economic structure of industrial countries) is gradually being formed: the share of agriculture fell from 40.6% (in 1990) to 18.12% (in 2014); share of industry and construction increased from 22.6% (1990) to 38.50% (2014); share of services increased from 38.6% (1990) to 43.38% (2014)(5).

The rate of poor households fell from 53% (1993) to 8.2% (2014)(6); every year there are 1.2 million new jobs, the quality of life of the people has been continuously improved; educational level of the people, quality of human resources and social dynamics are significantly improved.

Ownership of the means of production in state-owned enterprises

During the renovation period, ownership in state-owned enterprises have made a major change due to the change in mechanisms, policies, organizational arrangements, management and distribution in state-owned enterprises. The separation of management rights of the State as owner of enterprises’ assets and the enterprises’ rights to use those assets for business and production has promoted the right of self-control in production and business in adaptation to the market mechanism. The system of state enterprises has been organized, rearranged in the tendency of diversifying production - business models with reasonable structure and scale: equitization of state-owned enterprises has been carried out; state corporations have been organized, consolidated and developed; the weak state-owned enterprises suffering prolonged losses have been merged, liquidated and declared bankrupt.

The 7th Congress has defined: “Rearranging and strengthening economic units. Urgently reorganizing and renovating management of the State economy, etc. Focusing forces on consolidating and developing key establishments and business establishments which have efficiently operated and have great significance for national economy. Leasing, transfering ownership forms, or dissolving the establishments suffering chronic losses and which are unable to rise. Rearranging the enterprise unions, corporations in accordance with production and business requirements under the market mechanism”(7). After the 7th Congress, the issue of ownership of the means of production are quite fully expressed in the Law of state-own enterprise (1995).

The issue of ownership of state-owned enterprises has been fundamentally changed following arranging and renovating stages of state-owned enterprises: the process of capital accumulation and concentration has been increased; state resources are focused on the key sectors that should be dominated by the state economy; additional capital has been raised in order to create the potential for development; the State’s property has been used more effectively .

Regarding land ownership

The Resolution of the 7th Congress and Resolutions of the 2nd plenum of the Party Central Commitee of 7th tenure (1991), Resolutions of the 5th plenum of the Party Central Committee of 7th tenure (1993) have clearly defined ownership right and use right of land: Land is owned by the whole people and is assigned to the unified management of the State; peasants have the right of long-term land use. The use right of peasants is expressed in five basic rights: Converting, transfering, leasing, inheriting and mortgaging land as prescribed by the law. Regulation of these 5 rights of peasants is an important step for land relations which are moving under objective economic laws, making the land from its position as production means in the self-sufficient economy to the commodity status and land use right is able to be “bought and sold “ in the market economy.

Resolutions of the 4th Plenum of the Party Central Commitee of the 8th tenure, Resolution 06-NQ/TW of the Politburo on a number of issues regarding development of agriculture and rural areas have concretized a number of issues of ownership, such as accelerating land allocation and issuing certificates of stable and long-term land use right to peasants; defining prices of land when land is transfered, compensated, mortgaged for loans; encouraging and helping peasant households to exchange land to each other to overcome the state of being too scattered and fragmented of land. The people who are not peasants are allowed to lease the right to use vacant land, bare mountains and hills, coastal alluvial land, wasteland for putting investment to develop agriculture, forestry and fishery as prescribed by the law. This is the right policy helping to take advantage of the national resources, the country’s economic development and creating opportunities for entities to access important means of production in agricultural, forestry and fishery production.

In the process of renewing contents of land ownership, three rights of the owners are increasingly specified (the right to possess, the right to use and dispose). As the owner of land, the State has full rights to implement these three rights and can decide every important issue to ensure reasonable and economic use of land. At the same time, the State implements its ownership through granting land to use by organizations, households and individuals; the State controls, governs all activities of the users under the framework of the law pursuant to the viewpoint “making land use right be transfered into commodity in a convenient way... Prices of real assets are formed according to market principles. The State impacts on land prices through the macro-economic policies based on supply-demand relations of land”. Thus, this viewpoint has been the basis for forming policies on land use right as commodity in the market to minimize waste and speculation which make the real estate market be beyond the State control.

However, the problems now existing in the current land ownership are inadequacies of the land ownership and use system. In the reality, settlement of “land use right” and “land ownership right” is not clear; there is still the “mutual domination”. The second reason and existing problem in the land ownership issue is weak management of land of the State: the planning of land use is always broken; land corruption and speculation increase. 

 

Assoc. Prof., Dr. Nguyen Thi Nhu Ha

Institute of Economics and Politics,

 

Ho Chi Minh National Academy of Politics

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