Introduction
It is often predicted that Vietnam will rise in Asia as a strong society and economy in the next few decades. This is not without justification. Vietnam indeed has much potential which, if fully exploited, can enable it to achieve a leading role in Asia.
It occupies a strategic geographical position with a long coastal line of over 3000 kilometres. Itborders strong trading partners such as China in the north and Laos, Cambodia and Thailand in the west. Vietnam has a hardworking population of nearly 90 million which offers a strong workforce, a significant market and hence strong manufacturing and trading potential. Vietnam is relatively rich in natural resources, with a number of petroleum fields off its coast and numerous deposits of bauxite, titanium, gold and other precious minerals concentrated in its highland areas. It has friendly relationships with countries in the region, in particular ASEAN countries, and increasingly strengthens its relationships with Western countries, including the United States of America and those in Europe and Latin America.Significant and positive political and economic changes have taken place in Vietnam over the past two and a half decades. As is well known, following national unification in April 1975, Vietnam operated a closed, centrally planned, state-controlled economy, following the style of the former SovietUniomFor over 10 years, this proved highly unsuccessful and drove theVietnamese economy into extremely serious depression. This, combined with diminishing aid from the forÂmer Soviet Union and the socialist bloc, prompted the Vietnamese Government to launch the Doi Moi (â€?renovation’) policy in 1986. It opened up the economy with the recognition of private ownership, the right to conduct business and the permission of foreign investment. The agricultural farming system was also fundamentally changed with the abolition of communal cooperatives, a system replaced by the allocation of agricultural land to individual households.
This was the start of a completely new era for Vietnam, with many hitherto conÂstrained powers being unleashed in all aspects. The allocation of farm land to each individual household strongly motivated farmers, resulting in exponential growth in rice production, a major export of Vietnam. Private companies started to be established, gradually forming the private economic sector, now a major part of the Vietnamese economy. The foreign investment sector started to be formed, having a transcending effect on the Vietnamese economy in terms of employment, technology, management style and, above all, a culture of operÂating and competing according to the rules of the market economy. The state- owned sector, previously subject to no competition, started to realise that it had to change itself in order to keep up with many changes occurring at a fast speed.All these economic developments in turn had profound effects, both negÂative and positive, on the environment, the political system and the culture of the society. The resulting obvious need for close state control explains why the Vietnamese Government has proceeded very cautiously in its process of opening up the economy. While undeniably building a market economy, the Vietnamese Government wishes to retain a high degree of state control over economic activities and stays close to its socialist ideologies. Hence, the Vietnamese economy is often labelled â€?the socialist oriented market economy under State control'.[468] Over the past two and a half decades, the Doi Moi policy has achieved impressive results. With a gross domestic product (GDP) currently standing at almost US$90 billion, the economy had had a steady annual growth rate of over 8 per cent until 2008, when the country was affected by the world economic crisis. In 2009 the Vietnamese economy resumed its momentum with a commitment of foreign direct investment of US$21.48 billion and a GDP growth of 5.32 per cent, which is considered reasonably positive in light of the circumÂstances at the time.[469]
Alongside these economic developments, the Vietnamese legal system has also fundamentally transformed itself, both quantitatively and qualitatively.
The Vietnamese legal system now is completely different from 25 years ago. With almost no law and regulations suitable for a market economy in 1985, Vietnam has created a new comprehensive legal framework to regulate a market economy with many international-standard laws and regulations, readily accessible by the community. Many international treaties concerning trading, investment and other economic activities have been concluded, notably with the accession to the World Trade Organization (WTO) in 2007. A new generation of lawyers havebeen produced and are now in practice. The business and general communities are more accustomed to using lawyers and legal services. Alternative dispute resolution mechanisms, such as arbitration and mediation, have been introduced and applied, albeit at a modest pace. In short, a whole new legal system is now in existence, compared to 25 years ago.
This chapter offers an overview of the current Vietnamese legal system and the changes it has undergone over the past two and a half decades. As well as discussing and analysing these changes, the chapter considers the future direction of the Vietnamese legal system and the action needed for it to become one more suitable to a market economy.
2