PROJECT FINAL MEETING
Advocacy and Capacity Building on Competition Policy and Law in Asia
(7up2 Project)
27-28 June 2006
Hotel Landmark Bangkok, Bangkok, Thailand
Competition Policy and Law in Transitional Economies- The Case of
Vietnam
Le Dang Doanh
Senior Economist
The legacy of centrally planning
economy
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The concept of competition has been
strongly condemned and criticized as
inefficient and immoral.
The economy operated according to
administrative order and decision in all
spheres: production, distribution,
consumption. Consumer did not have any
choice. De-facto there was monopoly
everywhere.
Private sector was not allowed but existed
due to practical demands.
The Reform Process
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Law on Foreign Direct Investment
(1987, 1990, 2000)and Law on
Investment (2005)
Law on Company (1990), Law on
Enterprise (1999 and 2005)
Law on Bankruptcy (1995 and 2003)
Law on Competition 2004. No
sufficient control on monopolies.
Competition in various industries
and services
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Export has been liberalized and strongly
promoted the private participation. Private
sector shares ~ 45% of non-oil export.
In non-essential industries and services
competition helped to improve supply,
choice, quality of products and services: in
gastronomy, garment and footwear,
passenger transport and taxi etc. Private
sector was clearly more efficient.
Unfair competition practices still exist. No
visible improvement yet.
Monopolies and unequal playing
field
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Monopolies in strategic services are
regulated by special laws: Law on
Telecommunication, on Civil Aviation.
Decree-Law on Pricing regulated pricing
for various products (gasoline) and
services (electricity, passenger airtransport etc).
De-facto monopoly at provincial level on
procurement of certain agrarian products.
Unequal treatment on accession of land,
credit from Development Assistance Fund
(Bank on Development)
Monopolies
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Airline: Vietnam Airline operates airport facilities,
keeps predominant market-share.
Telecommunication: VNPT share 92% of market
in fixed telephone, controls the access to the
national grid.
Electricity, Vinacoal
Import and export of cultural products: movies,
books, magazines.
Cement, gasoline etc.
Mixed signals: establishment of big state-owned
Holding Groups on public utilities and products.
High cost, low quality of services.
Regulations
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Monopolies operate without
independent regulator. Electricity
Regulator reported to the same
Minister of Industries.
Laws with unclear conditions for
market entry.
Master plan for development of
essential products and services.
Licenses
Law on Competition
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As a fundamental law for market economy
the promulgation of the Law on
Competition considered as an important
progress.
Efforts for implementation: Decrees,
Competition Commission, Competition
Agency.
Increasing awareness among business
community and consumers
So far limited impacts on the practice.
Problems
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Unleveled playing field between stateowned enterprises and domestic private
companies.
Intervention from various agencies into
business affairs.
Large share of micro-businesses, unable
to understand and observe laws.
Under–staffed Competition Agency.
Coordination between Competition Law
and specific laws regulating utilities.
Prospect
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Vietnam’s WTO-accession helps to
intensify competition, demonopolyze
various industries and services according
to a roadmap.
Over-hauling of the legal framework.
Establishment of independent regulators
for public utilities.
Strengthening the Agency on Competition,
Commission on Competition.