Fair competition key to economic progress: forum

Vietnamese policymakers and businesses should foster fair competition to drive social development and ensure a socialist-oriented market economy, an expert said in Hanoi yesterday.
Seafood processing at the Ngo Quyen Joint Stock Company in Chau Thanh District, Kien Giang Province. (Photo: VNA/VNS)
Seafood processing at the Ngo Quyen Joint Stock Company in Chau Thanh District, Kien Giang Province. (Photo: VNA/VNS)
Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), said at a forum on national competition policy that there could be no market economy without competition.
He said the economy would benefit from a domino effect generated by competition, because productivity would improve, at enterprises and among workers.
The greater the level of competition, the higher the level of market development, Cung said.
Dau Anh Tuan, Director General of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), noted that when it comes to business competition, State agencies seem to be suffering from a ‘management addiction.’
Tuan said the prevalence of many licenses and business conditions that are time consuming, lack transparency, suffer from irregular implementation and interfere with a business’s autonomy would slow down economic progress.
"Regulations that are too strict will also impede enterprises from competing freely," he added.
Cung suggested that the Law on Competition be amended in order to ensure fair competition, and related laws and policies adjusted to boost competition levels by eliminating barriers, discrimination, and other unreasonable business conditions.
“It is a general mentality that everyone wants their business or industry to be monopolistic, but it is precisely this way of thinking that holds back national progress. We have to control all kinds of unfair competition, including monopolistic tendencies,’ he said.
Other experts at the forum agreed that more concrete action was needed to remove business licence barriers causing harm to the enterprise community.
There should be a mechanism to supervise and deal with agencies tasked by the Government with abolishing business conditions and to supervise implementation of newly improved license regimes, they said
New approach
Phan Duc Hieu, Deputy Director of CIEM, believed that with an enabling Competition Law, anti-competitive behaviour would soon be dealt with effectively, ensuring fair competition,
A new draft amendment to the 2005 Competition Law stipulates that the national competition authority would be the advisory body assisting the Minister of Industry and Trade (MoIT) in State management of competition, organising investigations and other tasks.
The draft amendments to the Competition Law are being seen as a new approach that clarifies the nature of and impacts on the nature of business competition.
However, Cung felt the role of the competition authority in the draft law was almost absent.
‘It is necessary to add this function and to task the competition authority with ensuring regulatory control over any malpractice that impedes or distorts fair market competition,’ he said.
Trinh Anh Tuan, Deputy Director- General of the Vietnam Competition Authority under the MoIT, said the 2005 Competition Law was an important legal document regulating the competitive relationship between businesses in the market.
It would continue to be an important legal corridor for creating and maintaining a healthy, equal business environment, and for creating favourable conditions for national economic development, effectively allocating social resources and ensuring the interests of consumers, he said.
The revised Law on Competition is being finalised by the MoIT and will be submitted to the National Assembly for comments at its fourth session later this month.
As of 2016, after 12 years of enforcement of the Law on Competition, eight cases of anti-competitive behaviour had been dealt with and fines and processing fees of nearly VND5.5 billion (US$245,000) imposed in six cases.
During this period, there were over 330 complaints from consumers and businesses, 182 of which were investigated. Advertising accounted for 62 percent of unhealthy competition, followed by illegal multi-level sales at 17 percent.
The MoIT handled 32 cases related to unfair hoarding involving 189 related businesses.
The ministry also actively investigated many important sensitive sectors in the economy in order to enhance its ability to detect micro signs of breaching the Competition Law.
A total of 87 pre-litigation investigations were conducted during the 12 years.
Timely handling of transboundary anti-competitive behaviour contributed to stability in the domestic economy, especially in key economic sectors, said Hieu.
Experts, researchers, and business representatives attending the forum presented and proposed policy measures to improve market development, competitiveness and productivity in the country.
The measures included plans to restructure State-owned enterprises towards promoting competition, access to core infrastructure, and proper use of agricultural land.
The forum was an opportunity for business professionals, policymakers and economists to exchange views and discuss solutions to enhance the national competitive landscape. It was organised by CIEM in collaboration with the German Development Cooperation (GIZ).

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