VietNamNet introduces the final part of the online roundtable discussion titled: "Vietnam steps into the new era – an era of national empowerment".

We are honored to introduce our distinguished guest, Pham Chi Lan. She is the former Secretary-General and Vice President of the Vietnam Chamber of Commerce and Industry. She has served as a member of the Prime Minister's Advisory Group and a member of the Task Force on the Implementation of the Enterprise Law. She has extensive experience in policy advising, particularly on economic policy issues.

We are also honored to introduce Nguyen Van Phuc, former Deputy Chairman of the National Assembly's Economic Committee. Mr. Phuc dedicated nearly 40 years to the National Assembly, working in both legal and economic fields. He contributed to advising and supporting the drafting of three Constitutions: the 1980 Constitution, the 1992 Constitution, and the 2013 Constitution.

Lastly, we are pleased to introduce Truong Thanh Duc, Director of ANVI Law Firm, a member of the Task Force on the Implementation of the Enterprise Law, and a member of the International Arbitration Center. Mr. Duc has been actively involved in advising and developing economic policies.

Editor-in-Chief Nguyen Van Ba: Mr. Nguyen Van Phuc, General Secretary To Lam emphasized that "institutions are the bottleneck" and the first area requiring a breakthrough. As someone with extensive experience in legislative activities, how do you evaluate the current law-making process, and what changes are needed to address this bottleneck?

Mr. Nguyen Van Phuc: This question is well-suited for me.

As I mentioned earlier, institutions are now identified as the "bottleneck of bottlenecks." We have pinpointed three key areas that require breakthroughs: infrastructure, human resources, and institutions. However, in my view, institutions are the bottleneck affecting all three. Infrastructure is stalled due to institutional issues, and human resources face obstacles also because of institutional challenges.

Recently, Ha Sy Dong, a National Assembly representative from Quang Tri province, made an excellent point: "So between institutions and human resources, which should come first?" Institutions are created by humans, not by nature or natural laws.

Mr. Nguyen Van Phuc: When building institutions, humans must apply market principles. As Mr. Duc mentioned, institutions are what enable the proper functioning of the market.

I would like to ask all four of us here: what is an institution? I believe each of us would have a different answer. So, what constitutes an institution? What are its components?

It is widely acknowledged today that, within an institution, a nation’s Constitution serves as the foundational law—the primary and fundamental base - followed by the legal system.

A thorough examination of the statements by General Secretary To Lam, the Prime Minister, the Chairman of the National Assembly, and other leaders and National Assembly representatives reveals that, alongside the Constitution, laws remain the core of an institution. Society must be governed by laws, and the state must also operate within the framework of the law.

However, institutions can be categorized as formal and informal. There are inclusive institutions, which foster participation, and extractive institutions, which exclude or deprive.

Informal institutions, as Ms. Lan pointed out, include social norms, customs, regulations, village conventions, and ethical standards for business that are agreed upon and binding within residential and business communities. Although informal, these institutions are crucial and highly effective as they form the foundation upon which people and businesses live, interact, conduct business, and collaborate.

So, what does building institutions entail? First and foremost, it means building a legal system grounded in the Constitution. We must first reach consensus on this principle.

Editor-in-Chief Nguyen Van Ba: It is a fact that most draft laws are prepared by departments or units within ministries before proceeding to other stages. What is your opinion on this process?

Mr. Nguyen Van Phuc: We already have the Party's platform and resolutions, including many specialized resolutions such as those on land. These Party resolutions, from the Congress level to the Central Committee, the Politburo, and the Secretariat, provide very clear and precise guidance.

However, many laws are amended just a few years after being enacted. Is this the right approach? Does it ensure the stability, longevity, and predictability of the law as emphasized by General Secretary To Lam?

The percentage of businesses that can predict changes in central government regulations is declining. In 2013, approximately 14.29% of businesses could anticipate such changes, but in recent years, this figure has fallen to less than 5%. Additionally, only around 6% of businesses can predict the implementation of central government regulations at the local level. Meanwhile, 61% of businesses face difficulties in applying for conditional business licenses, and 61% report high unofficial costs associated with licensing. Furthermore, 22% of businesses have delayed or canceled their business plans due to complications in obtaining permits. (Source: PCI Report)

Mr. Duc, as a lawyer, entrepreneur, and someone who works closely with investors, including foreign investors, you must have encountered these issues. During my time on the Economic Committee of the National Assembly, I frequently engaged with foreign investors, and they consistently voiced their concerns: "Our biggest worry is the instability of your legal system. One moment it's this, and the next moment it's that. We cannot predict or plan based on such unpredictability."

Who is responsible for this? I believe it fundamentally stems not from the platform or resolutions. For example, the resolution on land is excellent, but the Land Law (2013) does not reflect its spirit or content.

Institutions are created by people and organizations. Without professional legislative bodies and individuals equipped with the right methods and processes for law-making, we will only produce amateur laws. I assert this confidently.

Having spent nearly 40 years in the National Assembly, I dare to claim that many laws are amateurish. We demand a professional National Assembly and 500 professional deputies, but this is a challenging expectation, Ms. Chi Lan.

The National Assembly requires specialized, professional deputies. Currently, 40% of the 500 deputies are full-time, but not all of them are truly professional. Moreover, law-making requires proper methods and processes.

We face several issues here.

The drafting apparatus for laws resides within ministries because they have the necessary resources, and draft laws are prepared by specialized departments and divisions. Let me be frank: laws are essentially the products of these departments and divisions. Whenever a department or division sees a need for management within its scope, it pushes for the creation of a law.

The National Assembly aims to have 40% of its deputies working full-time. In reality, many deputies are highly capable individuals - they are professors, PhDs, and leading scientists. However, they are not professional legislators.

For this reason, National Assembly Chairman Tran Thanh Man has emphasized that the root of legislative quality lies within the ministries and drafting agencies. This is accurate because the committees of the National Assembly are limited in personnel, with a maximum of about 40 members. They cannot cover the vast number of laws. The committees of the National Assembly primarily examine and provide feedback to improve the quality of laws and ensure that the voices of the people are reflected in them.

If a draft law is of poor quality from the outset, how can it be transformed into a high-quality law later?

Chairman Tran Thanh Man also stated that only professional legislators and a professional legislative apparatus can produce professional laws. In my view, we urgently need professional bodies and individuals with the skills and analytical mindset for legislative policymaking.

Even now, as in my time, National Assembly deputies still revise laws word by word, sentence by sentence. They work day and night, including Saturdays and Sundays. One deputy openly declared during a session: "We weigh only 50 kilograms, yet we are being asked to carry loads of 100 kilograms or even a ton - it’s impossible to bear."

Editor-in-Chief Nguyen Van Ba: General Secretary To Lam has called for an end to the mindset of "if it can't be managed, ban it." Ms. Chi Lan, how should policies be designed to align with this principle? Should the law focus more on pre-checking or post-checking to both fulfill its regulatory role and promote market development?

Ms. Pham Chi Lan: The mindset of "if it can't be managed, ban it" reflects a misunderstanding of the state's role and function in a market economy.

During the centrally planned economy of the subsidy era, the state held absolute power. However, with the transition to a market economy, the roles of the State, the Market, and Society must be clearly delineated.

Ms. Pham Chi Lan: The state should focus solely on fulfilling its proper functions and responsibilities, without confusing them with the roles of the Market or Society. It is the incorrect perception of the state's role - that the state is responsible for and entitled to manage all aspects of economic and social life - that leads to the mindset of "if it can't be managed, ban it."

The Constitution clearly defines the powers, responsibilities, and functions of the state. The state is only authorized to exercise the powers explicitly granted and must not exceed them. How management is conducted and the tools used must be based on the legal system - this is the fundamental principle.

Unfortunately, most laws emphasize the responsibilities and obligations of citizens, with penalties for violations, while only briefly and vaguely mentioning the powers and responsibilities of the state.

In other countries, public officials are only authorized to perform duties explicitly permitted by law, while citizens are free to do anything not prohibited by law. This distinction in scope is significant. Therefore, the state must not misinterpret its role to mean it has the authority to control or prohibit everything.

When it comes to pre-checking or post-checking, pre-checking is fundamentally flawed. It involves controlling or restricting businesses and citizens at the outset, even before they have implemented their projects or plans.

In reality, from the initial idea to the actual implementation and operation of a project, various factors come into play. Compliance with the law by citizens and businesses can only be assessed after their activities are underway.

Thus, pre-checking is meaningless. Post-checking, on the other hand, is evidence-based and allows the state to verify whether citizens and businesses are acting in accordance with the law. This enables the state to impose penalties, provide corrections, or issue warnings to ensure compliance.

In several areas, we have offered incentives to attract foreign direct investment (FDI), such as tax reductions, lower land lease fees, and cheap labor. In return, investors promise to create jobs, export products, and achieve certain localization rates. However, they often fail to fulfill these commitments.

Only during post-checking do we discover these violations, but often we cannot penalize them effectively.

Therefore, a shift from pre-checking to post-checking is imperative.

The National Assembly is responsible for law-making, while the Government executes these laws. The Government can propose important policies based on practical needs, and the National Assembly can then formalize these policies into laws to implement the Government's vision. This approach fosters professionalism in legislation.

Entrusting the drafting of laws to departments and divisions within ministries often leads to the insertion of vested interests into legislation.

If the National Assembly merely reviews and supplements these drafts, it is insufficient. The National Assembly must take full responsibility for law-making. I recall a case where Ms. Tran Thi Quoc Khanh proposed a draft law, but unfortunately, it was not approved.

Editor-in-Chief Nguyen Van Ba: As someone who has been actively involved in providing legal feedback with VCCI, how do you perceive the statement, “Institutions are the bottleneck of bottlenecks”? Could you provide an example from real-life practice?

Mr. Truong Thanh Duc: A pressing issue right now is real estate prices. Many leaders and experts blame this on the (negative side) of the market economy or on speculators.

However, such assessments are overly simplistic. Nowadays, it takes several years just to develop a single project, so even the current prices could be considered low. The skyrocketing prices we are seeing align with the natural laws of the market.

Mr. Truong Thanh Duc: To resolve the issue, we must address supply to balance demand, rather than focusing on regulating land auctions. The principle of auctions is to drive prices up. If we want land prices to stabilize, we need to release more land and increase supply. Unlike Singapore or Hong Kong, Vietnam still has vast areas of land, and there is plenty available for housing development.

The root cause of the current real estate market challenges lies primarily in institutions, policies, and legal regulations.

According to the Ministry of Construction, around 1,200 commercial housing projects across the country are entangled in legal issues, effectively cutting off the supply of real estate.

For years, we've enforced rules requiring every residential project to have a certain proportion of residential land within its area. This is fundamentally flawed.

For instance, projects like Ecopark or Ocean Park are built on agricultural land—there’s no existing residential land to include. Similarly, projects in the heart of District 1 or District 3 in Ho Chi Minh City, which have been operational for decades, still face unresolved legal obstacles. This burdens the public and cripples businesses.

When housing prices are excessively high, the state’s role is to intervene and regulate prices downward. However, this should not involve excessive inspections or audits, as such actions only push real estate prices higher. By creating difficulties and withholding permits for projects, construction halts, businesses and citizens cannot conduct transactions, and property prices soar further.

The institutional bottleneck in land and housing is already causing significant harm to the economy, and I fear this damage will escalate in the future. It affects costs, product prices, jobs, livelihoods, and the operations of both citizens and businesses.

In the real estate market, legal permits are the most critical factor, and these are tied to institutional frameworks. Therefore, the solution must come from reforming regulations, not through investigations. The market cannot self-correct in this situation. We need urgent action to eliminate these institutional bottlenecks.

Mr. Nguyen Van Phuc: General Secretary To Lam has affirmed that institutions are the "bottleneck of bottlenecks." So, who is responsible for this institutional stagnation? It is us. And who are "we"? We are the ones who create and establish these institutions. Therefore, institutional reform must begin with mindset transformation - that is, with people.

Ultimately, it comes down to the mindset, awareness, organizational structure, and methods of those involved.

Institutions cannot correct themselves; it must be done by people. Since institutions are human creations, the real challenge lies in identifying capable individuals who can craft institutions fit for a new era.

Ms. Pham Chi Lan: What must we do to respond to and implement the General Secretary's directive?

I believe this is a significant opportunity for everyone, across all sectors, to participate in institutional reform in our country and to break this bottleneck. Without overcoming this obstacle, Vietnam cannot rise, and the economy cannot advance.

I hope for concrete actions to ensure that the General Secretary’s affirmation is quickly disseminated and implemented at all levels - from the highest authorities responsible for the nation’s destiny to various societal groups.

Beyond land issues, businesses are also burdened by 16,000 "sub-licenses." This is a major constraint and bottleneck in the current business environment.

In the past, under the Enterprise Law of 1999, the Government managed to reduce the number of sub-licenses to fewer than 200. Yet, over the years, this figure has risen to 16,000.

Institutions have been one of the three strategic breakthroughs highlighted in Party Congresses XI, XII, and XIII. The General Secretary has correctly identified institutions as the most critical area requiring a strategic breakthrough. I deeply hope for swift action to build trust and inspire enthusiasm in society.

Editor-in-Chief Nguyen Van Ba: The roundtable discussion has covered three key topics: Mobilizing the country's resources for development, establishing a competitive market economy, and institutional reform.

We hope these topics have provided valuable ideas and policy recommendations to contribute to the nation's prosperity. Of course, there are many other important topics to address, but due to time constraints, we will conclude here.

Thank you to our three guests and to all VietNamNet readers. We look forward to another opportunity to meet and discuss other significant topics in the future. Thank you!

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