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Vietnam's state sector a 'cancer' in economy

Published on Jan 30, 2013 11:37 AM
This picture taken on June 9, 2012, shows an old ship of the state-run Vinashin company being docked at a port in the northern coastal city of Hai Phong . "Losts", "bad debts" and "bankcrupcy" are words often quoted by official media reporting on the current economic crisis. -- PHOTO: AFP

HANOI (AFP) - Opaque, corrupt, inefficient - Vietnam's state-run companies are used to criticism, but now they stand accused of creating a systemic economic crisis which the communist regime cannot fix.

More than 25 years after it started a transition towards a market economy, the government is trying to unpick a web of state-owned firms, which have a stranglehold on the economy and are proving stubbornly resistant to reform.

"The public sector is the Communist Party's biggest mistake," said Hanoi-based economist Nguyen Quang A, adding that the "long illness" of the public sector was causing a broader economic crisis.

"The economy is in its worst situation since 1986," he told AFP, referring to a major economic crisis which precipitated free-market reforms.

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