Vietnam’s leaders are set to tighten their grip on the economy, affirming the central role of the ruling Communist Party and the dominance of state companies in a revised constitution to be approved this week.
After indicating in January they could use the charter revamp to edge toward a more market-oriented system and lift growth from its slowest rate in 13 years last year, leaders have opted to retain state-owned enterprises as the economy’s anchor. State firms have contributed to Southeast Asia’s highest bad debt ratio.
Further entrenching the regime raises the risk of stalling needed reforms such as more transparency, said investors including Mark Mobius, at a time when social unrest over issues such as land rights has mounted. Dissatisfaction with economic progress led parliament this year to subject leaders to an unprecedented confidence vote and some party members to suggest an alternative charter allowing “political competition.”
“It’s battening down the hatches to ride out the storm,” said Carlyle Thayer, an emeritus professor at the Australian Defense Force Academy in Canberra. “The economy is not getting the 7 percent growth they wanted. Anytime there is turbulence, the default is to maintain control.”
Read more: http://www.bloomberg.com/news/2013-11-26/vietnam-state-companies-still-dominate-in-constitution.html
