The Straits Times
www.straitstimes.com
Published on Jan 30, 2013
 

Vietnam's state sector a 'cancer' in economy

 
 

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.