The role of the state in industrialization and modernization in Taiwan during the international economic integration period 1961-2003 - Lessons learned and the possibility of application to Vietnam

With the changes in the domestic economy and the international context, the 9th Party Congress (2001) continued to have new perceptions of industrialization and modernization, acknowledging the "knowledge economy", considering "gradual development of the knowledge economy" as an important direction and task, a new content of the industrialization and modernization strategy of our country. Especially at the 10th Congress (2006), it was affirmed that it is necessary to shorten the industrialization and modernization process on the basis of taking advantage of favorable opportunities created by the international context, on the basis of the country's potential and comparative advantages. In other words, the introduction of a shortened industrialization and modernization model in our country, which is an industrialization and modernization model based on integration, abandons the view of building a closed economy, self-sufficient in producing everything it needs, to the view of producing what it can do best in the international division of labor system, and the knowledge economy is an important factor of the economy and industrialization and modernization, has affirmed the decisive role of the State in orienting the cause of industrialization and modernization.

Second , besides the orientation function, our State also plays an important role in organizing and directing the implementation of industrialization and modernization. In fact, the determination of the subject of industrialization and modernization is not only the "exclusive" State as in the previous period but also all enterprises and economic sectors and the official recognition of the market mechanism as the mechanism for mobilizing and allocating resources in industrialization and modernization is reflected in policies such as: policies to create a legal framework for the development of all types of markets, for the existence and development of economic sectors, policies on international economic integration, policies on infrastructure development... to mobilize and allocate effective use of resources both domestically and internationally, promoting industrialization and modernization, and the achievements have proven the above statement.

- About the limitations

Besides the achievements, our country's economy still has many limitations and weaknesses, is still facing many difficulties, major challenges and is at risk of falling behind in development. That also shows that

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The role of the State in industrialization and modernization in international economic integration in our country in recent times has revealed many limitations. Generally speaking, while theoretical thinking and awareness have made new developments in the direction of modernization, at the implementation level, it has basically stopped at the level of "industrialization". Even in some activities, efforts and practical actions still bear the appearance of the thinking of the previous period. Specifically:

First, on the role of determining the content of the industrialization and modernization strategy

Although our Party and State have determined the path and steps for industrialization and modernization, they have only stopped at the general orientation. Currently, Vietnam still lacks a comprehensive industrialization and modernization strategy with specific goals for each stage, especially lacking many development strategies for industries. At the same time, the issue of quantifying industrialization and modernization goals has not been focused on, the standards of a modern industrialized country have not been clarified, and it has not been determined how far Vietnam is and what aspects must be focused on to achieve the set goals.

Second, on the State's leadership and management role in industrialization and modernization

The limitations in the State's direction and administration in the process of industrialization and modernization are also quite clear:

- The work of planning for socio-economic development still has many shortcomings and has greatly affected the process of industrialization and modernization. In reality, planning and scheduling work play a very important role among the intervention and regulation tools of our State for socio-economic development in general and the cause of industrialization and modernization in particular. However, the lack of synchronization and systematization is still the biggest shortcoming of territorial socio-economic development plans.

In fact, the development orientations of the sectors and fields mentioned in the plans are still relatively separate from each other and do not match the chosen economic structure.

selection. The handling of inter-sectoral and inter-regional relations in planning has only stopped at the methodology level, without clear arguments, especially not mentioning further inter-regional relations in terms of capital, labor, information, currency exchange flows... A notable point is that the planned structure for the future has a more qualitative than quantitative meaning, especially in market economy conditions, but in reality, there are still many quantitative planning indicators, making the planning objectives rigid. When studying the economic structure, the argument for the ability to develop key products has not been mentioned in depth, and the effectiveness of the current structure and the impact of the structure on the competitiveness of the products have not been evaluated. The decentralization in the planning process is not clear, especially the decentralization in finance. Forecasting and analysis work is still very weak, especially market forecasting, which is reflected in the "static" nature of the target system, which is inconsistent with the actual fluctuations of the domestic and international markets. In addition, in reality, there is also a lack of attention to planning implementation. Currently, our country still lacks a mechanism to monitor, summarize and adjust the implementation of planning, especially a coordination mechanism at the regional level, a legal system, policies; organizational methods, and accompanying sanctions to ensure that these solutions are implemented.

- The construction and promulgation of legal institutions necessary for the operation and development of the market economy are not timely and synchronous. Reality shows that the socialist-oriented market economic institution in our country still has many problems:

i) The market system in our country develops slowly and is not synchronous. The financial market, real estate market, and science and technology market develop slowly and cannot meet the requirements. The underground market and the informal market in our country are still large in scale and the market is still fragmented. Another characteristic of the market system in our country is that monopoly is still relatively high, both the monopoly of purchase and the monopoly of sale are established and maintained by administrative measures nationwide or locally. Product market

Important markets such as cement, petroleum, fertilizer, telecommunications, aviation... are markets that are dominated to varying degrees by monopoly enterprises. Monopoly is also reflected in the operations of many state-owned corporations or groups following a closed, self-sufficient model or in cases where members agree or control output and prices.

The situation of fragmented, segmented markets, underground markets, and informal markets is still quite common and monopoly is partly due to the low level of development of the market and the economy, but also partly due to many regulations and administrative interventions of state agencies at all levels, hindering or distorting the operation of the market mechanism. In the market system in our country, state policies either have limited effects on a small scale; or are eliminated; or policies are distorted and do not have the expected effects, or even create side effects, contrary to the original policy goals and intentions [19, p. 193].

ii) The subjects carrying out industrialization and modernization are still discriminated against. In recent times, although the actual benefits that the development of the private economic sector brings to the economy are enormous, this economic sector is still discriminated against in terms of policy. The inequality in access to resources and the monopoly situation have made it difficult for competition to promote positive effects in promoting development. This shows that the viewpoints on the development of economic sectors, the development thinking in the market mechanism, the strategies and policies of the state have changed too slowly compared to the movements and changes of practical life and compared to the requirements of development.

iii) The economic operating mechanism is slow to overcome non-market characteristics. The State still uses too many administrative tools to intervene in the economy, and takes on many functions that the market can perform more effectively while not creating a sufficient legal foundation. In general, the economic legal system in our country is still incomplete and lacks uniformity. The quality of drafting, building and passing

The legal system is not yet up to standard. Many newly issued laws have had to be supplemented and changed. Some laws are still waiting for new decrees to take effect... Many sub-law documents were not issued in a timely manner and were inconsistent, causing obstacles in the implementation process. Administrative reform is slow, and the management apparatus is not operating effectively.

In general, the types of markets in our country have been gradually formed, however, the formation mainly originates from policies and measures to loosen and liberalize, but some types of markets still lack publicity, transparency, and lack of support and promotion from the State. Up to now, the legal corridor for the types of markets has been formed, but there are still some shortcomings that have hindered the synchronous development of linkages between types of markets, which is reflected in the one-sidedness in the content of regulation for some types of markets, the separation in the process of legal adjustment for each type of market, and the failure to establish basic legal connections between types of markets. As a result, the process of institutional innovation and development is slow, asynchronous, and does not meet requirements.

- The role of state management of national resources (including national finance, land, resources, state budget...) is still weak, leading to waste and loss.

The fiscal and monetary policy still focuses on mobilizing the budget for investment and consumption in a direct manner, not completely free from subsidies. The state budget still loses a large amount of revenue due to the loose tax management mechanism. The tax system has not been completed, and tax policies have not focused on fostering revenue sources. Vietnam still lacks a strategy to exploit and mobilize financial resources from the residential sector towards socio-economic development goals. The use of resources, national assets and public assets still has many wastes and losses. The reason is that the legal system on the management of land, water and mineral resources is not consistent.

- On shortcomings in investment policy

The investment policy of our State in recent times has not really been linked to the goal of shifting the economic sector structure. Investment development activities in our country in recent times have shown some outstanding characteristics: i) Relying heavily on resource exploitation; ii) Orientation towards extensive development; iii) Trend of developing an inward-looking sectoral structure - replacing imports; iv) Trend of developing sectors that use more capital than labor and are oriented towards high technology.

Basically, in investment policy, the idea of self-sufficiency and protection, although it has been overcome a step, is still quite clearly shown. Firstly, some state policies clearly show the idea of protecting goods that are capable of meeting domestic demand. The content of some major planning or balancing plans, sectoral balancing, quotas and other non-tariff measures clearly shows this. In fact, these are protectionist measures, a distortion of the self-sufficiency regime in the centralized planning mechanism. Secondly, in investment policy, the formation of production structures at the local level also shows this idea. "Movement" projects in many localities such as building cement factories, sugar cane, beer, soft drinks... to serve local consumption; construction of industrial parks, industrial clusters... which basically rely on state capital, are not subject to market regulation in structural orientation, do not consider efficiency and competitiveness, do not rely on the principle of "exploiting and promoting comparative advantages", have almost no participation of the private economic sector as investors, and pay little attention to the goal of job creation. Notably, state investment has increased rapidly in recent times but is too spread out and dispersed; the loss rate is up to 20% to 30% of the project value; the debt in basic construction investment is very large, mainly in transportation and irrigation. State development investment credit covers most of the activities of the economy, distorted into a new form of subsidy in the mind.

Investment from the budget, protectionism, and monopoly in state credit investment are still evident. In general, the protection mechanism itself has not encouraged investment in developing industries that are in great need, such as supporting industries, manufacturing and supplying raw materials, but has instead focused on producing final products. As a result, the structure of the manufacturing industry in recent times has not been able to effectively exploit the strength of domestic raw materials, but has tended to import raw materials from abroad to serve production. This is clearly shown in many Vietnamese industries such as the automobile and motorbike industries, and even some industries with large export values such as the textile and garment industry, the electronics and refrigeration industry, etc.

Thus, in terms of policy thinking, many important issues, especially the issue of employment, the shift of the labor force from the agricultural sector and low-productivity service sectors to the processing industry and high-value-added service sectors, still lack a comprehensive policy perspective with a clear strategic vision from which to develop a synchronous, systematic, consistent and long-term program. Many state policies have not really created a system of levers to promote the allocation of resources to form a production structure suitable to the country's comparative advantages and social consumption structure. The bias in the investment structure has led to a bias in the economic sector structure. The inevitable consequence is low economic efficiency, even low, and low competitiveness even in the domestic market.

- On international economic integration policy

The process of international economic integration in our country has not really been linked to the improvement of institutions, policies and economic structural reform; especially it has not really been linked to the reality and requirements of industrialization and modernization in our country. Reality shows that international economic integration is an objectively necessary issue, but more importantly, international economic integration must be linked to socio-economic development goals, first of all, the goals of industrialization and modernization. Those

Achievements in international economic integration have affirmed Vietnam's great efforts, but in general, the implementation of commitments in international economic integration will put Vietnam's economic sectors, enterprises, and products in front of enormous challenges to survive and develop when competitiveness is still limited because we still lack the necessary preparation conditions to enter the fierce competition, not only in the domestic market but also in foreign markets.

- On the shortcomings in education and training policies

The weak state of human resources in our country is mainly due to the shortcomings of the education system: The quality of education and training is much lower than that of many countries in the region; The scale of training increases disproportionately with the conditions for ensuring quality; The training structure is unreasonable; The practical capacity of learners is still weak; There is no attention paid to training in high-tech professions. Many studies have shown that state management of education and training in our country still has many shortcomings, even mistakes, so it has not created a strong change in human resource development. The current spending of the education system is not transparent and wasteful. The proportion of the budget for education and training in GDP in our country is higher than most countries in the region, but the main problem is that the efficiency of using this resource is still low [12, p. 32]. In fact, the reform direction of both vocational training and general education in our country in the past has lacked a standard strategic orientation. The reason is that the orientation of education and training reform lacks a strategic vision of the economic structure and is not based on that strategy. The perspective of connecting education and training with the market has not been focused on and in the right direction, and has not been placed in the overall economic development strategy whose pillar is the investment strategy. The designers of the education reform program have not clearly and correctly identified the relationship between the development trend of the era that our country is trying to join and the requirements for education reform, so the reform practice is basically a localized and patchwork correction.