Vietnam mulls plan to bar military, party from doing business

HANOI (AFP) - Vietnam's ruling Communist Party, armed forces and police would have to shed their business interests under reforms now being considered, according to officials and reports.

An upcoming party meeting will also look at streamlining Vietnam's party and state apparatus by merging several of the 26 government ministries and 11 party committees, the central committee of the party has said.

The reform proposals, backed by a veteran party figure and state newspaper editorials, come at a time of rapid change in Vietnam, East Asia's second fastest growing economy which this month joined the World Trade Organisation.

The party's central committee last week proposed consolidating many party and state bodies to "get rid of bureaucracy, overlapping roles and responsibilities to make their structure more streamlined and effective."

The 160-member committee also agreed on "a policy to shift purely existing economic establishments under the party, armed forces, Fatherland Front and social-political organisations to the management of the state from 2007."

The reform proposals would be considered at the central committee's fifth plenum, expected to convene before Vietnam's May 20 national assembly elections, the central committee said in its report.

"The idea is encouraging," Le Dang Doanh, a senior economist with the Ministry of Planning and Investment said Tuesday.

"It's a sign of progress," he said, adding however that so far no details were available on the proposed changes.

Vietnam's military now owns many leading companies, including telecom firm Viettel, the Military Joint Stock Commercial Bank, the Thang Long and Truong Son construction corporations, and the Ba Son ship-building company.

The Communist Party, the party-controlled Fatherland Front and police forces at provincial and district levels are also involved in business activities, including hotels, manufacturing and import-export firms.

A Western diplomat said getting these institutions to shed their business interests would be "a welcome and overdue step on Vietnam's path toward becoming a normal integrated economy with a sound market economy.

"It would not be a complete surprise. Similar steps were taken several years ago by Vietnam's big northern neighbour China," said the diplomat, speaking on condition of anonymity.

However, the diplomat cautioned that, even if the regime goes ahead with the plan, "it would remain to be seen how this divesture is carried out in practice" and who would end up controlling the business interests.