Role and characteristics of economic management function of Viet Nam state phase international integration

28 Tạp chí Khoa học Viện Đại học Mở Hà Nội 52 (02/2019) 28-36 ROLE AND CHARACTERISTICS OF ECONOMIC MANAGEMENT FUNCTION OF VIETNAM STATE PHASE INTERNATIONAL INTEGRATION Nguyen Vinh Hung* Date received the article: 3/8/2018 Date received the review results: 4/2/2019 Date published the article: 25/2/2019 Abstract: Economic management function is very important function in the system the functions of the State of the Socialist Republic of Vietnam. This is the function of influence and a direct impact on most of the activities of the State and also affects most of the various sectors of life economic - society. This article study the role and characteristics of economic management functions and suggests some recommendations for improving the effectiveness of this function important. Keywords: Law, economy, economic management, economic functions, international integration. 1. Introduction Currently, “the modern world economy more closely link with other countries”.1*With the flow of the world economy, Vietnam has been a member of major economic organizations and forums such as ASEAN, APEC, ASEM, and WTO ...Besides, Vietnam's market economy is still in the process of formation and development, so it always requires instant and flexible adjustments from the State. However, research shows that, unlike the previous period of * School of law - VietNam National University, HaNoi centralized command economy, the role and characteristics of economic management functions in the period of international integration have changed immensely. Thus, the article studies the role and characteristics of the economic management function in the period of international integration to propose some recommendations for economic management functions to be more suitable to today’s requirements and circumstances. 1 Pham Quang Vinh (2011), Curriculum of Macroeconomics, University of Economics - Hanoi National University. p. 135. Nghiên cứu trao đổi ● Research-Exchange of opinion 29 2. The role of economic management functions The role of economic management functions is reflected in the important contents such as “strongly liberating and developing productive forces, promoting all potentials and resources, building infrastructure and converting economic structure, improving competitiveness, synchronously forming and perfecting market types and institutions of socialist- oriented market economy suitable to the feature of Vietnam”.2*However, contrasting the previous period, now, because of the impact of international economic integration, the role of economic management functions has expanded to the following contents: “proactive and active integration with international economy, expansion of foreign economic relation activity associated with improving the independence and autonomy of the economy”.3†This is innovative and also creative thinking of doing business and economic management of Vietnam which brings a lot of opportunities and advantages for the country’s prosperity. It can be affirmed that economic management function “plays a crucial 2 Nguyen Van Dong Editor-in-Chief (2010), Theory on State and Law, Justice Publishing House, p 115. 3 Nguyen Van Dong Editor-in-Chief (2010), Theory on State and Law, Justice Publishing House, p 116. role in the government’s management”4‡ which directly impacts, affecting most of the subjects in society including the State. For the commons, the economic matter is always the first goal, the desire of each person. For businesses, most types of businesses work with the ultimate goal are pursuing profits. As for the State, the regulation of revenues and expenditures, management and use of state budget funds ... ultimately also relate to economic activities. Therefore, the State intervene in the function of economic management has also affected most economic activities of all subjects in society. Currently, in the context of globalization and international economic integration, no country can develop without cooperation and economic exchange with other countries. In order for the economy to grow and develop smoothly and sustainably, the State must use economic management functions to orient and regulate the economy. Specifically, the State will “adapt strategic tools, strategies, policies, and methods to create favorable conditions and environment for economic entities and sectors to develop”.5§As the result, the economic management function has 4 Nguyen Minh Doan (2010), Theoretical curriculum on state and law, National Political Publishing House, p. 181. 5Phan Huy Duong (2012), State Administration of Economics, University of Economics - VNU, Hanoi National University Publishing House, p. 17. 30 Nghiên cứu trao đổi ● Research-Exchange of opinion played a particularly important role. Because “the results of implementing the economic management function of the State directly affect all aspects of social life”.6* 3. Features of economic management functions Firstly, in the period of international integration, the function of economic management is implemented by the whole state apparatus basing on the assignment and close coordination between the state agencies from the central to the grassroots level. Basically, the process of developing economic management policies has been implemented since the National Assembly promulgated the Constitution, laws and resolutions related to the economy. Simultaneously, the National Assembly decides the most important economic issues and executes the right to supreme supervision of activities of the State and other subjects in society. In the locality, People's Councils at all level will carry out the task of issuing resolutions on local economic management and at the same time supervising the implementation of state agencies, economic organizations, social organizations and all citizens related to economic activities in their localities. In 6 Nguyen Minh Doan (2014), Guide to State theory and law subjects, Justice Publishing House, p. 93. 7 Nguyen Vinh Hung (2015), Implementing the function of economic management of the addition, agencies such as the Government, the Ministry of Finance, the Ministry of Industry and Trade, the State Bank or People's Committees at all levels are administrative management agencies for the economic sector. For judicial agencies such as the People's Court and People's Procuracy, to the extent and authority, these agencies also contribute significantly to the inspection and adjudication of violations related to the subject is responsible for organizing and implementing economic management functions. Secondly, the function of economic management in the period of international integration has the contents prescribed by law. The function of economic management is the State's activities related to the organization and management of the economy. Thus, in essence, the function of economic management is the same as other management functions of the state and therefore, the content of economic management functions must be regulated and adjusted by law. Research shows that “the content of the law on an organization and economic management consists of two parts is the substantive law and procedural law”.7†Particularly, the substantive law will regulate the rights State of Vietnam, Master's thesis in Economics, University of Economics - VNU, p. 12. Nghiên cứu trao đổi ● Research-Exchange of opinion 31 and obligations of economic entities. And the procedural law provides for the order and process for participants to exercise their rights and obligations. Compared to the previous periods, the legal system related to economic management is now quite diverse, abundant and regularly adjusted. In addition, the opening of the market for investors from all over the world to do business in Vietnam also hasten the system of Investment Law, Enterprise Law, and Commercial Law a need for adjustment to compatible with the situation. Third, the function of economic management in the period of international integration has a specific objective to regulate all economic activities in accordance with the law in order to achieve the general objectives of the economy.The objectives of state management of the economy are divided into general goals and specific objectives. Accordingly, the overall objective is determined based on the general criteria of the Vietnamese economy. Specific objectives are determined based on the general goal of economic management, which is to build and develop an advanced, modern, strong economy along with international economic integration. 8 Article 4,5 and 6 of Constitution 2013. 9 Nguyen Vinh Hung (2011), Cultural and educational function of the State of the Fourthly, the function of economic management in the period of international integration is carried out according to the principles prescribed by law. Activities of state management of the economy in the period of international economic integration today, conducted by all state agencies from central to local levels based on political principles, technical principles. In particular, political principles include: Ensuring the Party's leadership in economic management, ensuring equality between ethnic groups in economic management, democratic centralism.8*Organizational and technical principles include: “combining industry and functional management with local management; Sectoral management combined with functional management and interdisciplinary management coordination”.9† Fifthly, the function of economic management in the period of international integration continues the function of economic management of the State of Vietnam from previous development periods. Since its inception (1945), the Democratic Republic of Vietnam has assumed the function of economic management and lasted until 1976, when the National Assembly of the whole country convened a decision to Socialist Republic of Vietnam current, Master thesis of Law, Hanoi Law University, p. 11. 32 Nghiên cứu trao đổi ● Research-Exchange of opinion rename the country and its functions. Economic management is officially transformed into an economic management function of the State of the Socialist Republic of Vietnam today. During this period and lasted until the Sixth Party Congress VI (December 1986), the economic management function was focused on the direction of economic development by the State (bureaucratic economy). Since the Sixth Party Congress, aware of the difficulties of the economy and the new development trend, the Party and the State have advocated changing the economic management mechanism from the economy focused on planning and directing to Socialist-oriented market economy. Later, summing up after 30 years of renovation, it proved the right and reasonable change of the Party and the State: “Over the past 30 years (1986 - 2017), the economic growth rate of our country, though there still has a slight fluctuation, but still higher than the regional and world average with an average increase of nearly 7% per year. If the period of 1986-1990, our economic growth rate was only 4.4% / year, then it was 6.21% in 2016 and 6.81% in 2017.”10* 10 Electronic newspaper Commerce Magazine (2019), Achievement over 30 years of renovation of the Party's economic thinking about building a market economy, access source: In recent years, along with Vietnam entering a series of large economic playgrounds of the region and the world, the current economic management function has been gradually adjusted to suit the requirements and circumstances and new situation. However, it can be seen that the current economic management function is still inherited and developed from the original foundation. The State now is having a relatively complete legal system on economic management and constantly improving, supplementing with new regulations to suit the development of the foundation. Vietnam economy in the period of international economic integration. Sixthly, the economic management function in the period of international integration has the impact of the basic and most important economic relations related to the economy. The main areas of economic relations that the State regulates through the implementation of economic management functions are diverse, abundant and complex. However, due to the pressure from international economic integration, the key economic sectors such as foreign trade, import, and export, / thanh- tuu-hon-30-nam-doi-moi-tu-duy-kinh-te- crab-dang-ve-grinding-dung-nen-economic- exam-truong-dinh-huong-xa-hoi -u-nghia- 58999.htm, March 1, 2019. Nghiên cứu trao đổi ● Research-Exchange of opinion 33 investment, finance, banking, securities, real estate are most concerned. Seventh, the function of economic management in the period of international integration is implemented by certain methods and procedures. The form of implementing economic management functions is an external expression of the activities of the State in the economic field. Generally, the State performs economic management functions in the legal and non-legal forms. Legal forms are specified by law on the contents, procedures, and order of conduct (for example activities of promulgating legal documents (legal normative) in the field of economy, promulgate legal documents on economic regulations, inspect and supervise the implementation of economic laws and documents on the application of economic law. Regarding non-legal forms, the State prescribes the way to proceed it such as procedures and order of conduct for conferences to review economic management, scientific conferences on State management for economic fields, conferences to disseminate experience of state management to the economic sector. The state management method for the economic sector is understood as the way of the economic management subject regulate its object to achieve the goal. At the general level, there are methods of persuasion, administrative enforcement, and economic sanction. At a specific level, the state management approach to the economy is the way that state management agencies use while performing their specific tasks and functions, especially in solving specific problems arising in the economic management process. In this meaning, there are specific organizational methods, technical and professional, such as coordinating activities between managers in different positions, taking on different jobs but all towards perform common tasks and aim to achieve common goals. Eighthly, the function of economic management in the period of international integration often changes in the content, form, and method of implementation. Along with the general development trend of the era and the international economy, Vietnam economy always changes. On the other hand, the needs and demands of society for the economy are getting bigger and bigger than before. Therefore, the function of economic management is regularly renewed and improved in terms of content, form, and method accordingly. Ninthly, the function of economic management in the period of international integration is carried out on the basis of the Party's resolutions and policies together with the statutory laws of the State on the economic field. The 2013 Constitution affirms that the Vietnam Communist Party “is forces 34 Nghiên cứu trao đổi ● Research-Exchange of opinion leading the State and society”.11* Therefore, the Party's views on the economic sector are the basis for the State to institutionalize into a law. That mean the rules of general conduct which is guaranteed to been forced by the State’s coercion. When the law is enacted it requires the State to adjust the economic management function according to the content of the law in order to gain the economic objectives. 4. Recommendations Currently,“international economic integration and globalization are the inevitable trends of every country”.12†When Vietnam joins international integration, the first and foremost impacted factor is always economy. Therefore, the function of economic management in the period of international integration always faces difficulties and challenges. Therefore, in order to manage economic functions more effectively, it is necessary to consider the following solutions: Vietnam constructs a socialist- oriented market economy on a deprived and difficult economic infrastructure 11 Paragraph 1, Article 4 of Constitution 2013. 12 Nguyen Vinh Hung (2018), Principles, forms and methods of implementing the economic management function of the State of Vietnam in the period of international integration, Democracy and law, No. 04, p. 3. 13 Le Tai Trien, Nguyen Van Tho and Nguyen Tan (1972), Vietnam Commercial Law, because of many long-lasting wars in the past. Moreover, “Vietnam had been an agricultural country ... a society that only specializes in agricultural production”.13‡ During the feudal period, “Vietnam's economy is prolonged in a self-sufficient situation. There, agriculture is an economic foundation, industrial and commercial development depends on agriculture and is an auxiliary economic activity for agriculture. The industrial and commercial class is still very small compared to the population of the whole country”.14§Because “the infrastructure of the society” is an economy that depends too much on agricultural production, the “superstructure of society” “throughout the China invasion period and the period of Vietnam feudal dynasties dominated in Vietnam is feudal legal ideology, reflecting the social existence of feudal society with backward, petty, fragmented agricultural production’’.15**Therefore, for a long time, Vietnam only cared for agricultural development and determined that the agricultural economy is the key field of the economy. interpreted the prize, Sai Gon Kim Publishing House, a publication, Book I, p. 3. 14 Nguyen Tri Dinh and Pham Thi Quy (2007), Economic history textbooks, National Economics University, National Economics University Publishing House, p. 285. 15Nguyen Minh Doan (2011), Legal consciousness, National Political Publishing House, p. 52 - 53. Nghiên cứu trao đổi ● Research-Exchange of opinion 35 However, when participating in international economic integration, the elements of integration have a great influence on the structure and composition of the economy. So far, the practice has proved that the agricultural economy is no longer suitable to lead the development economy. Therefore, we think that, first of all, it is high time for us to innovate thinking about and economic management. In other words, we need to develop new economic sectors such as the knowledge economy or the digital economy. Because these are areas attracting robustly capital and many countries with advanced and modern economies are also applying. On the other hand, with the achievements of the 4.0 industrial revolution, the exchange, trading, and cooperation with other countries have become faster and simpler. Therefore, we need to have specific guidelines to exploit and apply the achievements of science and technology to gradually develop the digital economy in Vietnam. As for the traditional agricultural economy, it should only be maintained in some areas of each region, which have many production advantages. Only by that, we can bring Vietnam's economy from an “idyllic girl” to a new “giant tiger” in ASEAN. References: 1. Electronic newspaper Commerce Magazine (2019), Achievement over 30 years of renovation of the Party's economic thinking about building a market economy, access source: / thanh- tuu-hon-30-nam-doi-moi-tu-duy-kinh-te- crab-dang-ve-grinding-dung-nen-economic- exam-truong-dinh-huong-xa-hoi -u-nghia- 58999.htm, March 1, 2019. 2. Nguyen Tri Dinh and Pham Thi Quy (2007), Economic history textbooks, National Economics University, National Economics University Publishing House. 3. Nguyen Van Dong, Editor-in- Chief (2010), Theory on State and Law, Justice Publishing House. 4. Nguyen Minh Doan (2010), Theoretical curriculum on state and law, National Political Publishing House. 5. Nguyen Minh Doan (2011), Legal consciousness, National Political Publishing House. 6. Nguyen Minh Doan (2014), Guide to State theory and law subjects, Justice Publishing House. 7. Phan Huy Duong (2012), State Administration of Economics, University of Economics - VNU, Hanoi National University Publishing House. 8. Nguyen Vinh Hung (2011), Cultural and educational function of the State of the Socialist Republic of Vietnam current, Master thesis of Law, Hanoi Law University. 9. Nguyen Vinh Hung (2015), Implementing the function of economic management of the State of Vietnam, Master's thesis in Economics, University of Economics - VNU. 10. Nguyen Vinh Hung (2018), Principles, forms and methods of implementing the economic management function of the State of Vietnam in the period 36 Nghiên cứu trao đổi ● Research-Exchange of opinion of international integration, Democracy and law, No. 04. 11. National Assembly (2013), Constitution. 12. Le Tai Trien, Nguyen Van Tho and Nguyen Tan (1972), Vietnam Commercial Law, interpreted the prize, Sai Gon Kim Publishing House, a publication, Book I. 13. Pham Quang Vinh (2011), Curriculum of Macroeconomics, University of Economics - Hanoi National University. Author address: School of law - VietNam National University, HaNoi Email: nguyenvinhhung85@gmail.com