From a marginal role…
Vietnam has long possessed an economy rooted in handicraft production, trade, and goods exchange. Traditional craft villages such as Bat Trang ceramics, Van Phuc silk, Dai Bai bronze casting, and Kim Bong carpentry stand as enduring testaments to the creativity and adaptability of the Vietnamese people in an early form of market economy. Family-run craft businesses passed down through generations not only preserve cultural identity but also embody the resilience of private economic elements.
During the feudal era, despite restrictions under centralised economic policies — particularly the policy which prioritised agriculture, protected the peasantry, and devalued trade and commerce — Vietnamese merchants found ways to expand trade, engaging in commercial exchange with regional powers as well as Western nations.
Under French colonial rule, the emergence of patriotic entrepreneurs and national bourgeois figures such as Bach Thai Buoi, Nguyen Son Ha, Do Dinh Thien, and Trinh Van Bo highlighted the crucial role of the private sector in building a strong and independent economy.
Following the great victory of the August Revolution in 1945, President Ho Chi Minh, in his message to the Vietnamese industrial and commercial class published in Cuu Quoc (National Salvation) Newspaper on October 13, 1945, affirmed: “The industrial and commercial class must work to build a stable and prosperous economy and financial system. The people’s government and I will wholeheartedly support the industrial and commercial sectors in this endeavour.” This statement reflected his recognition of the important role of business and commerce, while also underscoring the state’s responsibility to support them in contributing to the national resistance and reconstruction efforts.
The Politburo's resolution dated in September 1954 clearly stated: “Private industry and commerce are to be protected by law” and “ensure that both public and private enterprises continue to operate.” As a result, in the field of commerce, the private sector accounted for a dominant share of the economy.
In the report on the Draft Revised Constitution presented at the 11th session of the first National Assembly of the Democratic Republic of Vietnam (December 18, 1959), President Ho Chi Minh further emphasised: “For industrial and commercial capitalists, the State does not abolish their right to own the means of production and other assets; instead, the State strives to guide their activities to benefit the national economy and people’s welfare, in alignment with the State’s economic plan. At the same time, the State encourages and supports them in socialist transformation through joint ventures and other forms of reform.”
By the end of 1970, amid the economic and social crisis that severely affected people's living conditions, the Sixth Plenary Session of the Fourth Party Central Committee (September 1979) adopted the policy of boosting production and correctly utilising economic components. This was followed by the Secretariat's issuance of Directive No.100 on product quotas for groups and workers in agricultural cooperatives, and the Government's Decisions No.25/CP and 26/CP on various balancing sources and three-year plans.
Also, after the Fourth Party Congress, from April 1977, steadfast and creative leader Comrade Nguyen Van Linh (then Head of the Central Socialist Transformation Committee) clearly articulated that: “The Party's policy is to nationalise only those establishments that previously served war efforts, and to reform capitalist entrepreneurs who amassed wealth unlawfully through their connections with the US imperialist war machine. As for other groups including national bourgeoisie, small traders, and small producers, the Party continues to encourage and support them to develop production and build the country.”
However, by 1986, the private economy was still regarded as a temporary existence and remained a secondary role, supporting the state-owned economy.
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Bat Trang ceramics village. (Photo: HAI NAM) |
To major growth driver
After 1986, under the implementation of the Doi Moi (Renewal) policy, the private sector began to rapidly grow once again, becoming one of the key drivers of Vietnam's economy. The Sixth Party Central Committee’s sixth plenary session (in March 1989) identified that “a multi-sectoral economic policy is of long-term strategic importance, in line with the laws of development from small-scale production to socialism.”
Entering the 21st century, in the strategy for socio-economic development, the Vietnamese government emphasised the aim of transforming Vietnam into a truly multi-sector economy, treating private enterprises, foreign enterprises, and state-owned enterprises fairly. On May 10, 2017, during his closing speech at the 5th plenary session of the 12th Party Central Committee, late General Secretary Nguyen Phu Trong affirmed: “After more than 30 years of renewal, our awareness of the position and role of the private economy has made significant progress. From a place of discrimination and neglect, it has been recognised as ‘one of the drivers’ and now ‘a major driver’ of the socialist-oriented market economy in our country.”
Late Party General Secretary Nguyen Phu Trong also noted: “Initially, it is crucial to continue renewing our thinking, raising public awareness of developing the private economy, considering it an inevitable and objective requirement in the process of developing a socialist-oriented market economy. In addition, it is essential to develop the private economy quickly, healthily, and correctly, truly making it an important force to unlock productive potential towards the socio-economic development.”
In his opening speech at the 10th plenum of the 12th Party Central Committee on May 16, 2019, late General Secretary Nguyen Phu Trong also expressed deep concern: “We should not discriminate against the private economy. We must be fair. I suggest that, in the future, areas where good performance is achieved should be recognised, praised, and even awarded the title of hero for private enterprises. No discrimination, but at the same time, if anyone makes mistakes, they should be asked to correct them.”
Recently, General Secretary To Lam's article titled “Developing the Private Economic Sector – A Lever for a Prosperous Vietnam” has been regarded as a milestone in the recognition of the importance of the private economy, while also offering a strategic vision for the nation’s development. The article provides a comprehensive overview of Vietnam’s economic development over nearly 40 years of Doi Moi, highlighting key achievements and challenges that must be overcome.
In his article, General Secretary To Lam affirms that the private sector has proven to be a pillar in the national economy. From its secondary role in the early stages of Doi Moi (Renewal), the private sector has emerged and is currently contributing approximately 51% to the GDP, over 30% to the state budget, and creating more than 40 million jobs, accounting for more than 82% of the total workforce in the economy. Private enterprises not only dominate the domestic market but have also expanded internationally, affirming the Vietnam brand.
Looking towards a new era, the General Secretary believes that the private economy is the foremost growth driver of the country. It will be the vanguard, successfully implementing the industrialisation and modernisation of the economy, as well as leading in technology application and innovation.
Despite its significant contributions, the private sector still faces many barriers, from internal limitations to challenges in accessing resources. Many enterprises remain in the small and micro business category and lack the strong impetus to develop into highly competitive conglomerates. Additionally, private enterprises still struggle to access capital, land, high-quality human resources, and opportunities for cooperation with the FDI sector. Although the business environment has improved, there are still administrative barriers, informal costs, and institutional constraints.
Therefore, there is a need for important solutions to enhance the role of the private economy, such as: improving legal institutions to create a transparent and equal business environment; enhancing support for enterprises in accessing capital, land, technology, and human resources; and encouraging innovation.
