Communist Review - Institution and resources are not a new issue, but perceptions about this issue are still different, thus, leads to various organization of implementation and action. Unification of perceptions will help mobilize, allocate and use resources not only to ensure efficiency and fairness but also to maintain the socialist orientation.

Awareness of the institution and resources of a country, the relationship between the regulation of the economy according to the market mechanism and the role of the State in ensuring socialist orientation

Regarding the institution concept, there is an opinion that the institution is either a mechanism, a system of legal regulations and policies; or just a matter of organization and organizational structure. Vietnamese dictionary defines: "The institution is a range of regulations and laws of a system that people are forced to follow" ⁽¹⁾. According to the terminology handbook of international relationship: “The institution is a public agency or organization with formally defined structures and functions to regulate certain fields of action applicable to the entire population”⁽²⁾. In this article, the institution is perceived as a set of formal rules, informal regulations or common perception that have effects on motivating or inhibiting, directing or governing the interactions of political actors with each other in certain fields. Institutions are created and guaranteed to implement by both the State and non-state actors. Therefore, it can be understood that official rules are the Constitution, laws, sub-law documents, international treaties...; informal rules are ethical rules, traditions, customs, beliefs...; internal regulations include charters, regulations of organizations, enterprises...; domains of institutions include political institution, economic institution, cultural institution...; institutional implementers are the State and non-State actors including organizations, enterprises, individuals ... not in the State system.

Regarding the resource concept, there are also different interpretations. For example, a simple interpretation is about the internal force of geographical location, natural resources, the national property system, and labor resources; even the sound political lines and policies can be considered as resources. However, such a connotation lacks a factor that resources from outside are not of the country, but indispensable to attract, such as foreign investment, foreign labor, humanity knowledge, scientific and technical advances of developed countries, even the policies of organizations and the institutions in the world can be considered as external resources.

But if only internal and external forces are included, there is still the missing important element. It is the potential and the strength that will form in the future of a country, such as intangible and tangible future assets, including the development orientation, development planning, advantages brought about by trade agreements, ability to expand production and business,... value chain, and national, local and corporate brands.

Therefore, a nation's resources must be the synergy accumulated from geographical conditions, cultural history, natural resources, national property systems, labor resources, other existing assets, and potentiality of future national assets including both internal and external forces that the country can mobilize.

From the awareness unification of the above interpretation, the connotation can be understood that: “The institution on attraction, effective allocation and use of resources” is the mechanisms, policies and legal regulations of the State, regulations and rules of organizations and enterprises. It forces individuals living and working in a country, organizations, agencies and enterprises to comply with through tools for administration, management and regulation in order to appropriately allocate and use the nation's resources (geographical location, history - culture, natural resources, the national property system, human resources, status, reputation, and brand of the nation, businesses, products and other intellectual property objects), future assets, external resources (foreign capital, foreign human resources, knowledge and scientific and technical products ...) according to the market mechanism and the State's orientation and regulation for the most effective socio-economic development.

The interpretation of how to use appropriately the market mechanism and the State’s role must be clarified to possibly perfect the institution in order to attract, allocate and use resources.

Mobilizing and allocating resources has always been an important content reflected in the Vietnam Communist Party's Platform and resolutions on the economy. In the Platform on National Construction in the period of transition to socialism, (supplemented and developed in 2011), it is clear that: “Distribution relationship ensures fairness and creates motivation for development; resources are allocated according to socio-economic development strategies, plannings and plans; The distribution regime is mainly based on labor results, economic efficiency, as well as on capital contribution and other resources and through the social security and social welfare system. The State manages the economy, orientates, regulates and promotes socio-economic development by laws, strategies, plannings, plans, policies and material forces”.

The 10-year socio-economic development Strategy for the 2011-2020 period also clearly states: “Improving institutions to remove all obstacles, create favorable conditions for the liberation and strong development of production forces”; at the same time: “enhancing the potentiality and improving the efficiency of the state economic sector. The state economic sector plays a key role, as an important material force for the State to orient and regulate the economy”. It can be said that the Platform and the 10-year socio-economic development Strategy for the 2011-2020 period affirm the important role of the State and the State's material forces in allocating and using resources. That is further confirmed in the Political Report submitted to the 11^th National Party Congress: “The socialist-oriented market economy in Vietnam is a multi-sectoral commodity economy regulated by the State-controlled market mechanism under the leadership of the Communist Party. This is a form of market economy that both obeys the laws of the market economy, and is based on and guided, governed by the principles and the nature of the socialism”; asserting the fact of attaching importance to both the operation under the market mechanism, and the State's regulation, guidance and domination suitable to the principles and nature of the socialism.

The 12^th National Party Congress of Vietnam Communist Party making certain adjustments, but still sticking to the Platform, clearly shows: “Vietnam's socialist-oriented market economy is an economy that is regulated fully and synchronously by laws of the market economy, and ensures the socialist orientation suitable to each development stage of the country”. The Resolution affirms: “Playing a key role in effectively mobilizing and allocating development resources, the market is the main driving force to liberalize the production capacity and the State's resources allocated according to strategies, plannings and plans in line with the market mechanism. The State plays the role of guiding, building and perfecting economic institutions, creating a healthy competitive environment, using the State's tools, policies and resources to guide and regulate the economy, promoting production and business and protecting the environment; implements social progress and equity in each step and each development policy. The people's role of mastership is promoted in socio-economic development”. In addition, it also affirms: “The state economic sector plays a key role, meanwhile the private economic sector is an important driving force of the economy, and the subjects of all economic sectors are equal, cooperative and competitive according to the law”.

Thus, there is an acknowledgment that the market economy plays a key role, is the main driving force, and the State plays the orientation role. The Draft Document of The 13^th National Party Congress sent for comments from the party committees, basically still closely following and inheriting the Platform, Resolution of the 11^th and 12^th National Party Congresses, clearly states the role of the State and affirms “The market plays a key role in determining prices of goods and services”, and adds the new phrase: “The market plays a decisive role in mobilizing, distributing and using resources” (page 38, item 2 -IV of the Draft Political Report). Thus, there is a change from the 11^th National Party Congress emphasizing the State’s role in allocating and using resources to the 12^th National Party Congress affirming the market’s principal role, and to the Draft Document of the 13^th National Party Congress confirming that “the market is decisive” in mobilizing, distributing and using resources. It is very necessary to clarify whether this is the development of mindset or the change of the principle on the viewpoint of mobilizing, allocating and using resources.

Vietnam should consider letting the market decide how to mobilize, allocate, and use resources. It can be seen that the product of capitalism in the present day is the creation of a consumer society, which stimulates the human consumption individual needs to a peak. This exceeds the limited responsive ability of natural resources, the environment and urgent human needs, which must lead to the waste of resources and destruction of the environment. With this activation of consumer society, the market mechanism promotes exponentially. In addition, if the market is decisive, the principles of the market economy will automatically distribute resources, and will be regulated by the supply-demand relationship and determined by the market price because its maximum goal is to optimize profit being the driving force... Resources will be mobilized, distributed and used in sectors, stages, and products with the highest profitability, while places with low profit margins, will not be on the map of the market mechanism. The downsides of the market economy will arise, along with a consumer society, which will be a crisis, a comprehensive imbalance not only of the economy but also of the environment and ultimately of the society. The socialist directions will be overshadowed by the market economy’s strength, leading to over-exploitation, differentiation between the rich and the poor, overuse and waste of resources; social welfare and social security will not be guaranteed. It is synonymous with the State's role in strategies, plannings, plans, along with other State regulatory tools, such as taxes, prices, and budget for investment in disadvantaged and vulnerable areas, will be gradually driven by profit targets; the State policies will also serve these targets. This can be seen clearly when the COVID-19 epidemic happens in countries that implement pure market mechanisms and in countries that attach great importance to the hands of the State.

Therefore, it should stop at the level: “The market plays a key role in mobilizing and effectively allocating development resources” as mentioned in the Resolution of the 12^th National Party Congress and adhered to the Platform of Vietnam Communist Party (amended and supplemented in the year 2011). Accordingly, the State’s role is important and indispensable. The State must still adopt strategies, plannings, plans, and use tools, policies and resources of the State to orient and regulate the economy in order to overcome the negative aspects of the market economy and ensure the socialist orientation.

Next, it is the distribution regime and the “prosperous people” goal. The country building Platform in the period of transition to socialism (supplemented and developed in 2011) clearly states, "the distribution relationship ensures fairness and creates a driving force for development" and "the implementation of the distribution regime is mainly based on labor results and economic efficiency as well as on the contribution of capital and other resources, and through the social security and social welfare system”. Thus, there are three pillars to distribute social wealth: the first pillar of distribution according to labor and economic efficiency, the second according to capital involved in production and the third through social security, social welfare. These three pillars support and complement each other to ensure a fair and reasonable distribution, reduce the income gap, the rich and poor differentiation, and are the combination of the market mechanism and the “hand” of the State. Moreover, they do not lose the development motivation, overcome the unfair distribution, and create the stability for the society, avoiding conflicts between social classes. It can be affirmed that the Platform sets out a very basic principle of the distribution regime in the period of transition to socialism.

In that spirit, the Resolution of the 12^th National Party Congress emphasizes the system of social security and social welfare, and the care for remote areas... However, the two pillars of distribution according to labor and economic efficiency, and according to capital involved in production and business is rather vague, unspecific and unclear. Mentioning the first pillar and the third pillar, the Draft Document of the 13^th National Party Congress of Vietnam Communist Party states: “the reformation of the wage policy is towards the approach of labor force market price, ensuring the principle of distribution by labor, creating a driving force to improve the productivity and work efficiency. It is also to attach importance to improving social security and welfare, to step by step ensuring the basic and essential needs of the people for housing, transportation, education, health...”. However, it is clear that although the second pillar “of distribution according to the level of capital contribution and other resources” is mentioned in both the Document of the 12^th National Party Congress and the Draft Document of the 13^th National Party Congress, it not only has not been stated in a concentrated manner but also has been scattered in different fields. Therefore, in order to clarify the three pillars of the distribution regime in the spirit of the Platform, it is necessary to understand that the second pillar is the implementation of the first distribution mechanism and the redistribution according to contributed capital and financial resources and other values (essentially capital). It will bring a source of income that accounts for a large proportion of the gross domestic product (GDP) for a part of the population, mostly rich people in the society. This income source in the market mechanism will increasingly increase, creating a gap between the rich and the poor in the society. Therefore, it needs an appropriate regulation through tax tools to create a revenue for the budget which is a resource to implement the social security and social welfare system. International experience shows that the tax policies in highly developed countries with fully promoted market mechanisms are very high to regulate income, dividends and inherited assets (for example, Sweden's personal income tax is 57.2%, Denmark 55.8%, Finland 53.75%, and the Netherlands 51.75% ...; the average inheritance tax of countries in the Organization for Economic Cooperation and Development (OECD) is 15%, of which the Netherlands 20%, Finland 19%, and Denmark 15 %⁽³⁾...). Besides, the policies and the systems of social security and social welfare are also very strong, which helps to reduce the gap between the rich and the poor, care for the vulnerable, invest heavily in education, health care, and create a stable and fair society at an acceptable level by the people. From the above analysis, the Draft Document of the 13^th National Party Congress should clearly state and have a correct policy on this second pillar in both distribution and regulation.

When the market mechanism with the distribution principle by the three pillars is implemented, the issue of “prosperous people” in the goal of “prosperous people, powerful countries, democracy, justice and civilization” needs to be considered because with the above distributional principles, there is only a small part of the “prosperous people”, but a large part of the “poor and near poor”, mostly in the “middle class”. Therefore, despite the State's regulation to overcome the gap between the rich and the poor through regulatory policies and through the social security and welfare system, a developing economy based on the market principles inevitably has a relative poverty rate and a rich rate which often corresponds to the poverty rate but possesses a large proportion of the national income. Besides, the middle class that will gradually increase needs to be given attention and encouragement to make up a large proportion of the society. This is a factor of social development and stability.

On the other hand, the personal consumption of the individuals is limited, no matter how rich they are, their personal consumption is limited to a certain extent. The most essential thing can be considered without limits of human is the culture, the knowledge and the need for happiness that everyone desires as the goal pointed out by President Ho Chi Minh: building an independent, free and happy Vietnamese country. In reality, the people are wealthy does not mean that the country is strong. This is because a country is strong only when its society is stable and its people feel happy. Therefore, the element of "happiness" should be added to the development goal in the period of transition to socialism.

Objectives and principles to perfect the institution to attract, allocate and effectively use resources for Vietnam's socio-economic development in the coming period

From the mentioned contents about the institution of efficient resources allocation and use, Vietnam must set goals, views and contents, solutions to improve the institution in the next 5 years, 10 years and 25 years as Vietnam celebrate the 100th anniversary of the foundation of our country (1945 - 2045). In the context of the fact that natural resources, such as land, primary energy, and secondary energy are limited, national financial resources are not strong enough, up to 70% of domestic labor force have been untrained, the issue of mobilizing resources to develop the country is not a small challenge.

Firstly, it is necessary to have a clear goal from low to high to strive, specifically:

- In the period of 2021 - 2025, it must create the major institutional breakthrough in mobilizing, distributing and using resources for development.

- In the period of 2026 - 2030, it is necessary to mobilize overall resources, gradually reduce the main dependence on natural resources, on investment capital, manual labor resources and cheap labor, and strongly increase the power from knowledge resources.

- In the period of 2031 - 2045, knowledge resources will play a key role in the development of Vietnam, replacing the main reliance on national resources, investment capital and cheap labor.

 What perspectives and principles must the institutional building for allocation and use of resources be based on to accomplish that goal? They must be:

- The first prerequisite principle is that the allocation and use of resources must be based on market principles, and only market principles are the basic and main driving force for the effective mobilization and allocation of resources. However, the pure market economy can raise downsides of the market economy. Therefore, it is necessary to have the State's adjustment and guidance which are dialectically reasonable, not subjective.

- The next principle is essentially based on internal forces, being considered as the foundation, the nucleus, and the necessary condition to attract external resources and also to ensure the economic independence.

- It is necessary to persistently, proactively and actively integrate into the international economy; to approach and take advantage of the resources which are the world’s knowledge, the foreign capital investment and the high-quality human resources from other countries. The internal and external resources should be both appreciated. The economic independence and autonomy should be fully and reasonably assessed in the context of integration and the trend of globalization.

- It is necessary to save resources like the beginning of efficiency. The waste of resources is now at different angles: the resource is being used wastefully and seriously; the financial resources of the State, enterprises and the population have been used in a big loss and waste (as estimated, at least 30% of capital sources of not only the State but also of citizens and private enterprises are wasted). In addition, the inappropriate use of both labor and time is also wasteful.

- Allocating and using resources must be based on the principles of equity, equality and benefit sharing between the State, economic organizations and population communities. These are the principles to ensure the consensus in the society that if not complied with, it will cause social instability and conflict.

- Mechanisms, policies and lines must be consistent and synchronous. When they are transformed, it must take a reasonable transition time for the economy to operate and catch up. The sudden change and inconsistent policies will cause serious damages to the use of resources.

Tasks and solutions of perfecting the institution to attract, allocate and use resources effectively in order to serve development needs

It must be seen that after nearly 35 years of renovation with right policies in accordance with objective laws, Vietnam had the institution to distribute income, and to attract, allocate and use resources, which helps to produce positive results, unleash the production and promote the country’s socio-economic national development with important and historical results. However, it must also be recognized that there are many limitations and barriers in the mechanism to attract, allocate and use resources, especially attracting resources, so there are three areas that need attention:

Regarding the land, the occupied land which is not put into use is still large in both rural and urban areas. Although there is no specific statistics, it may not be less than 30%. Besides, a large area of land is unconverted or used ineffectively. When the land for roads, irrigation works and welfare works to serve the community needs to be used, problems arise in terms of site clearance and market value of land…

Regarding the investment-attracting policy, the regulations on investment restriction and other binding regulations have not been really open with many barriers. Policies on taxes, fees and charges have many incomplete points, not creating the rationality between direct and indirect tax, not being really fair between domestic and foreign enterprises. The current credit policy is very difficult, businesses have difficulty doing business effectively due to the current high interest rates.

Market rules are not respected, and the State’s intervention is too deep, even administrative to market relationship. Therefore, it is necessary to review the laws on the economic sector, the criminal, civil and administrative laws to ensure uniformity and respect for market rules.

In order to perfect the institution to attract, allocate and use resources to serve development needs, it is necessary to carry out the following solutions.

Breakthrough solutions

Firstly, building and completing the national, regional and provincial planning system, and ensuring a long-term vision, being the basis for development in the right direction with openness, avoiding hardening and delaying adjustment.

Secondly, building different types of markets, implementing market price mechanisms, limiting the intervention of the State, especially with respect to prices of electricity, water, health service, education, environmental protection services, scientific and technical products and intellectual property, labor force (at present, in many places, income is not enough to reproduce simple labor force, not to mention enlarged labor regeneration).

Thirdly, completing, amending and supplementing some laws that are bottlenecks, such as the Land Law (clarifying the ownership issues related to the State's rights in deciding the land use purpose, land acquisition; land price; use and management of land for national defense and security ...Rights and obligations of foreign organizations and individuals in the use of rights such as transfer, mortgage, capital contribution, inheritance ...Violations of land management, the situation of letting land fallow, slowly put into use, order and procedures for land recovery...).

Continuing improving the system of taxes, fees and charges (ensuring rational mobilization into the State budget, ensuring tax neutrality, and rational structure between direct and indirect taxes in the direction of increasing the proportion of direct taxes, reducing indirect taxes; increasing natural resources tax, environmental protection tax... Considering assigning local authorities to decision on a number of taxes, fees, and charges associated with the actual local situation)...

Long- term solutions

Firstly, building a reasonable system of general education, higher education and vocational training towards training a high-quality human resource, creating knowledge resources for the country. That is the long-term basis for development.

Secondly, implementing well the policy of international economic integration, signing and actively participating in the new generation of free trade agreements. Strictly implementing the signed international treaties; resolutely not infringing on intellectual property, counterfeit goods, poor quality goods; improving the status and reputation of the national brand in the economic field.

Thirdly, having a policy to develop science - technology, considering the development of science - technology as the real top national policy, a breakthrough for both immediate and long-term national development.

Some recommendations

First of all, it is necessary to agree on the viewpoint: attracting, allocating and using resources for development must be based on the principle that the market economy is essential, and the role of the State is necessary and important. It is a necessary and sufficient condition, which are two balanced sides of an institution to mobilize, allocate and use resources in the direction of not only efficiency but also fairness and socialist-oriented assurance.

Next, it must express clearly the viewpoint that Vietnam must mobilize, allocate and use internal resources efficiently, including the potential strength forming in the nation’s future as well as attract, allocate, and use external resources effectively, in which internal resources are essential as the nucleus and foundation, external resources are important and necessary.

Then, the State's intervention in the economy must be based on economic measures and reasonable instruments, such as taxes, fees, charges, and financial funds; minimize the use of administrative and non-market measures; limit policy changes, policy instability, and if there is a change, there should be a reasonable transition period to support, assist businesses in having enough time and resources to transform.

After that, although there was the Resolution of the 5^th Central Conference of Vietnam Communist Party in the 12^th session on state-owned enterprises, it is still necessary to clarify the role of state-owned enterprises in the system of material forces of the State. The State-owned enterprise's main goal is to take profits, should not dominate the sector and should invest if it is effective.

Finally, it is necessary to have a new mindset of assets formed in the future, including assets at the level of the nation, locality and business to create resources for development./.

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(1) Vietnamese Dictionary, Dictionary Center, p. 900
(2) Dao Minh Hong - Le Hong Hiep (chief editor): Handbook on terms of international relations, 2013
(3) Alan Cole: Estate and Inheritance Taxes around the World. Tax Foundation Fiscal Fact, March 2015, No.458

This article was published in the Communist Review No. 951 (October -2020)