Is Vietnam a “Non-Market Economy” … ?

PM Nguyen Tan DungPrime Minister Nguyen Tan Dung said in his New Year Message 2014, “As part of the socialist-oriented market economy, market economy rules must, in the first place, be fully respected while regulatory tools and distribution policies be put in practice to guarantee social equality and social progress.” What do you suppose this means? Is this the political economy equivalent of “squaring the circle” … ?

Since 2009, AmCham and other organizations have sent a number of letters to the Ministry of Finance, Office of Government, and the Prime Minister, with no effect. The Ministry of Finance stated its position in an Apr 27, 2010 letter to five Embassies, three chambers of commerce, etc. There is political economy way of thinking in Vietnam, mentioned in the Prime Minister’s 2014 New Year’s Message, Section II, first and second paragraphs, that believes that ” … market economy rules must, in the first place, be fully respected while regulatory tools and distribution policies be put in practice to guarantee social equality and social progress.” and this is a “strategic breakthrough” for the “socialist oriented market economy.” This way of thinking is different from our view of “market economy,” and until there is some understanding of the two different ways of thinking, it may be difficult to come to an agreement about Vietnam’s price control policies, procedures, laws, and regulations, and status as a “non-market economy” or “market economy.”

Excerpts from the U.S. Department of Commerce decision that Vietnam is a “Non-Market Economy”
Factors required to consider in a “Non-Market Economy” (NME) Decision by the U.S. Department of Commerce

Letters from AmCham and others regarding Vietnam’s price controls
091215 US Chamber of Commerce Letter to MoF regarding Price Control
091216 AmCham EuroCham “Project 30” Representatives’ Letter to Office of Government regarding Price Control
091216 AmCham Letter to MoF regarding Price Control
100126 AmCham-EuroCham Letter to MOF re Price Control Circular
100126 AmCham-EuroCham Letter to OOG Price Control Circular
100205 U.S. Chamber Letter & Position Paper to MoF and OOG re Price Control
100324 AmCham-EuroCham Letter to PM re Price Control Letter
100324 AmCham-EuroCham Letter to PM re Price Control VN
100427 Price control-MOF REPLY (VN)
110701 Joint AmCham-EuroCham Letter to MoF w Position Paper on Price Law EN
110701 Joint AmCham-EuroCham Letter to MoF w Position Paper on Price Law VN
140314 Joint Letter from AmCham and EuroCham to Ministry of Finance et al re Price Controls (E)
140314 Letter from AmCham and EuroCham to Ministry of Finance et al re Price Controls (V)

Excerpts from the Prime Minister’s New Year Message, Jan 1, 2014 regarding the “strategic breakthrough” of the “socialist-oriented market economy”

“In the past years, great strides have been made in the completion of the socialist-oriented market economy with focus on creating a leveled playing field and administrative reform. This also represents a strategic breakthrough  defined by the Resolution of the 11th National Party Congress. As part of the socialist-oriented market economy, market economy rules must, in the first place, be fully respected while regulatory tools and distribution policies be put in practice to guarantee social equality and social progress.  In the coming years, comprehensive measures must continue to successfully implement this strategic breakthrough , in which focus should be made to address two important and closely-related issues, namely market price mechanism for essential goods and services and fair competition.

“The market price mechanism for all goods and services must be consistently implemented. The pricing of essential goods and services by the State  must be accurate and sufficient in terms of costs; price-formulating elements must be made transparent and the market price mechanism must be persevered with a suitable roadmap. In the mean time, there must be support policies for the poor, policy beneficiaries , ethnic people, and people living in remote, disadvantaged areas.”

“Squaring the Circle”

Squaring the circle is a problem proposed by ancient geometers. It is the challenge of constructing a square with the same area as a given circle by using only a finite number of steps with compass and straightedge. More abstractly and more precisely, it may be taken to ask whether specified axioms of Euclidean geometry concerning the existence of lines and circles entail the existence of such a square . The expression “squaring the circle” is sometimes used as a metaphor for trying to do the impossible.  http://en.wikipedia.org/wiki/Squaring_the_circle

Construct a square equal in area to a circle using only a straightedge and compass. This was one of the three classic geometric problems of antiquity, and was perhaps first attempted by Anaxagoras. It was finally proved to be an impossible problem when pi was proven to be transcendental by Lindemann in 1882. http://mathworld.wolfram.com/CircleSquaring.htm

Squaring the Circle, i.e. constructing a square whose area equals that of a given circle, is one of the three famous construction problems of antiquity. Its (negative) solution was eventually obtained in 1882 from the following theorem by the German mathematician Lindemann. http://www.cut-the-knot.org/impossible/sq_circle.shtml

There are three classical problems in Greek mathematics which were extremely influential in the development of geometry. The first was “squaring the circle.” One of the fascinations of this problem is that it has been of interest throughout the whole of the history of mathematics. From the oldest mathematical documents known up to the mathematics of today the problem and related problems concerning π have interested both professional mathematicians and amateur mathematicians. One of the oldest surviving mathematical writings is the Rhind papyrus, which was written around 1650. But some experts believe that the Rhind papyrus is based on a work going back to 3400 BC, more than 5,000 years ago. http://www-groups.dcs.st-and.ac.uk/history/HistTopics/Squaring_the_circle.html

Published: Mar 9, 2014. Updated: Mar 19, 2014