WORKING-PAPER

REFORMS ON PUBLIC
SERVICE SUPPLY IN
VIETNAM

2
No. 2006

CENTER FOR INFORMATION AND DOCUMENTATION

Tel/Fax: 084-7338930; E-mail: tttl@ciem.org.vn
 TABLE OF CONTENTS
I. ENVOLVEMENTS OF THE WORLD' S CONCEPTION ON PUBLIC
SERVICES AND THE PUBLIC SERVICE SUPPLY MECHANISM
OVER THE LAST 20 YEARS
I.1. Some fundamental issues on public services
I.2. Reforms regarding the public service supply mechanism
II. CURRENT SITUATION OF PUBLIC SERVICE SUPPLY IN
VIETNAM BEFORE LAUNCHING THE POLICY OF PUBLIC
SERVICE SUPPLY SOCIALIZATION
II.1. Some achievements on public service supply
II.2. Some shortcomings on state public service supply
II.3. Some shortcomings on the supply of education and health care
services
III. POLICIES ON REFORMS OF PUBLIC SERVICE SUPPLY
MECHANISM
III.1. Policies on the socialization of public service supply
III.2. Some wrong concepts on the socialization mechanism of public
service supply
IV. IMPLEMENTATION OF THE NEW MECHANISM: ASSESSING
THE ACHIEVEMENTS, DISCOVERING THE PROBLEMS AND
RECOMMENDING THE SOLUTIONS
IV.1. Assessing the achievements
VI.2. Problems and causes
VI.3. Solutions aiming at strengthening socialization in supplying
public services in the next time.

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I. ENVOLVEMENTS OF THE WORLD' S CONCEPTION ON PUBLIC
SERVICES AND THE PUBLIC SERVICE SUPPLY MECHANISM
OVER THE LAST 20 YEARS
I.1. Some fundamental issues on public services
I.1.1. Conception on public services
According to conception of many countries, public services always
associate to the state supply of these services. The term “public services” in
English originates from the category of public commodities. In the
economic term, public commodities associate to some natural
characteristics, such as: it is a kind of commodities which is impossible to
exclude anyone from using once it has been created; consumption of a
person does not decrease that of others, and; it is impossible to be
discarded, that means even when someone does not want to consume a
public commodity, it still exists. Thereby, public commodities are
categorized concretely into pure public commodities that satisfy all the
three above-mentioned characteristics; and impure public commodities
that do not satisfy all above characteristics. At first, the definition of
“public services” is to present the activities of impure public commodity
supply, firstly used in the Europe after the World War II. Nowadays, the
conception of “public services” has been remarkably extended, depending
on various approaches.
From the viewpoint of state management subjects, researchers on
administration field define public services as activities of state agencies of
performing the function of state administrative management, and assuring
public service supply to serve common and essential needs of the society.
This way of understanding focuses on the role and responsibilities of the
state on public service supply activities. This approach takes the viewpoint
of public commodities’s beneficiaries, considering public services as public
service supply activities by the state or private sector to serve essential
interests of the society and the communities. In Vietnam, Article 22, the
Law on Governmental Organizations (2001) stated: “Ministries,
governmental and ministerial-leveled agencies are to carry out functions of
state management of industries or professions in the whole nation; state
management of public services belonging to industries and sectors; etc”.
Thus, the conception of “public services” used here is to emphasize the
subjective role of the state on public service supply to the community. This
does not mean that the state is of monopoly to supply services to the
community. On the contrary, the state entirely can socialize some public
services, thereby sharing the workload of supplying the services, including

3
health care, education, water supply and drainage, etc., with the private
sector.
In fact, there are some important services serving common needs of the
whole community, but the private sector are not willing to take part in
because they do not create profit, or the private sector does not obtain
enough power and capital to carry out such service supply, for example,
vaccination, firefighting, water drainage, etc. These are vital services to the
common social life. With such services, no one but the state is of capacities
and responsibilities to provide the people with. In addition, there are some
services, such as education, healthcare, electricity supply, and pure water
supply, that can be provided by markets but in an inefficient manner, or this
can lead to social inequality, monopoly, overpricing, and adverse impacts
on benefits of consummers in particular, and of the whole society in
general. In these cases, the state is responsible to supply these services
directly or, to control private markets to serve basic rights of the people.
Although public services consist of various types, they all share common
characteristics that are to serve common needs and interests of the society,
and the state is responsible to assure such service supply to the society.
Even when the state transfers the supply of some of the services to the
private sector, it still plays the regulating role, with a view to assuring the
impartial distribution of such services and making good shortcomings of
markets.
Given the above characteristics, public services can be understood as
activities serving essential needs of the society, directly carried out by the
state or assigned to the private sector so as to assure social order and
equality.
I.1.2.The range and categories of public services
- The range of public services: the range of public services varies
depending on institutions of different countries, different periods regarding
people living standards in relation with economic development levels.
Therefore, it is impossible to impose a rigid standard to all countries. Some
countries take a broad conception of public services; accordingly, almost
all state activities are called public services. In Canada, for example, there
are 34 types of public services, ranging from national defense, security,
institutions, to socio-economic policies (job creation, planning,
environment protection, and health care, education, culture, social
insurance, etc.) Similarly, the Sweden clearly decentralizes public services
that each governmental level undertakes, thereby, attention is especially
paid to totally free welfare public services (such as unemployment benefits,

4
social allowances, etc.) In general, almost all nations highly appreciate
health care, and education and training activities.
A broad coverage of public services as mentioned is a common trend of
development in long term, but in immediate term, it is just proper to nations
at a high development level. To countries which are at a low development
level like Vietnam, we should focus more on the state function of serving
the society, then, narrowing the scope of public services, emphasizing more
on the most urgent common interests of the people, assuring their stable
and safe lives. Importantly, we have to separate public services activities
(so far called non-productive activities) from administrative civil authority
activities as soon as possible, as put forward in the government’s policies,
aiming to eliminate the subsidizing mechanism, lighten the state apparatus,
mobilize all potential resources in the society, and improve quality of
public services serving the people.
- Categories of public services: public services can be classified based on
many different criteria, according to natures of services, or to forms of
certain services, etc. For instance, in terms of supplying subjects, public
services are divided into three categories, namely: public services which
are directly supplied by the state; public services supplied by state-owned
enterprises; and public services supplied by non-governmental
organizations and the private sector. Following, we will go deeper in types
of public services basing on criteria of natures and effects of supplied
services:
(1) Public administrative services: This is a kind of service associating
with state management functions to meet requirements of the people. To
perform these functions, the state has to carry out direct servicies, such as
granting permits, certifications, registration, notarization, visas, resident
records, etc. (In some countries, public administrative services are different
activities, not belong to the range of public services. In Vietnam, some
researchers also share this viewpoint.)
(2) Public non-productive services: Including activities providing necessary
social welfares to the people, such as: health care, education, culture,
science, physical training and sports, insurance, social security, etc. Such
activities are mostly undertaken by state bodies and organizations, or partly
socialized.
(3) Public interest services: Being activities of economic characteristic
carried out by enterprises, in line with the state’s requirements, to serve the
people, such as water and electricity supplies, environment sanitation,
social infrastructures. Of which, a majority is undertaken by state-owned

5
enterprises, for instance water and electricity supplies in cities,
transportation, and postal services. There are some activities in localities
carried out by the private sector, such as: environment sanitation, waste and
rubbish collection and transports in some small cities, pure water supply in
some rural area, etc.
I.1.3. Some major characteristics of public services
- Public services are of sociality, with major aims of serving the
community’s interests, ensuring social equality and stability. Thereby, it is
possible to see that economics, and profits are not preconditions driving
public services.
- Public services serve needs of all citizens, without discrimination against
social classes and statuses, and of wide publicism. As objects to be served
by the state, all people are equal to access public services.
- Public services do not bring about nomal “commodities” but special ones
provided by the state, or by organizations, individuals designated by the
state, meeting demands of the whole society, no matter that provided
products are tangible or intangible.
- Transactions of public services are not through perfect market
relationship. Normally, users of public services do not pay directly. In fact,
they pay in form of tax payments to the state revenue. There are also some
public services that their users have to pay a part of or the whole
expenditures; however it is responsibility of the state to supply such
services with non-profit purposes.
Given these natures of public services, we can see that it is not simple to
provide this kind of services in an effective manner. The state has to define
services to which it plays a decisive role on the supply, some others that
need to be transferred to the private sector and social organizations, and
ones in which the state and the private sector can share the provision, as
well as define how the state performs its relative roles of regulation and
management to the issue. Experiences of many countries over the last years
have shown that in public service supply, the state just directly provides
services that the society cannot or do not willing to do. If the state do not
transfer the supply of possible public services to non-state sectors, and
neither reform the public service supply by state agencies, the overall effect
of public service supply will decrease, causing adverse impacts to people
lives and the common development of the whole society.
I.2. Reforms of public service supply mechanism
I.2.1. The necessity to reform public service supply mechanism

6
In the previous decades, most of public services were supplied by the state,
participants of the private sector was just limited. Levels and quality of
public service supply by states are various depending on natures,
institutions, and development levels of each nation. Still, together with the
change of the state’s roles, and the growth of the private sector and other
social organizations, it is easy to recognize that interactions between the
state and non-state areas in public service supply are developing with a
trend that the private sector and social organizations are increasingly
participate in the supply of these special services.
There are many reasons that urge the states to change its regime of public
service supply. Firstly, together with stronger and stronger development of
the private sector in terms of economic power, achievements in science and
technology fields have allowed the private sector to take over some
services previously belonging to the states. For example, the technology of
developed cable television has facilitated the supervision of usage of each
television set (to collect fees), and increasingly modern auto-record
equipments have allowed to measure consumptions of gas, electricity,
water in a precisely way. Secondly, changes regarding living standards
allow individuals to buy equipments that in the past were just publicly
used. This can be seen obviously in the public service supply of cultural
field; if in the past, people just can watch movies at public cinemas, they
today can watch at home with VCD, DVD recorders. Thirdly, an important
reason for the state to change public service supply mechanism via reforms
and gradual transfer to the private sector is the relatively ineffectiveness of
the public sector in comparison with the private sector in this field.
According to J.E.Stiglitz, expenditures of housing projects carried out by
the public sector are often 20 percent more costly than those provided by
the private sector; spending on waste collection of the public sector are
usually 20% higher than that of the private sector; spending on fire-fighting
of the private sector (but funded by the state) are 47 percent lower than
that of the public sector. A survey of 58 developing countries shows that
only 6% of respondents found public services provided by the state
effective, while 36% of respondents believed it was ineffective. Especially,
services in road-construction and health care fields are judged the least
effective areas.
In many nations, the public sector obtains monopoly in public service
distribution, and generally the quality of supplied services remains a
pressing matter. Recent decades have witnessed a fact that the state has
spread itself thin in too many activities, including public service supply,
that should have been transferred to markets and civil societies to undertake

7
at certain levels. In the current trend of state-market reforms, the state still
plays the most important role in assuring public service supply, but it is not
necessary to directly provide all of such services. The state is required to be
more precisely reflected in the acceleration of public service supply
management by macro-tools through laws, policies, and supportive and
simulative measures.
II.1.2. Changes on public service supply mechanism
- Transferring activities of public service supply to the private sector:
In order to effectively implement functions of the state, public authorized
agencies need to be flexible to adapt with complicated and rapidly
changing conditions. In the public service area, this would be very difficult
if policy-makers just use their apparatus of civil-servants to conduct service
supply. Therefore, in state apparatus reforms, the trend of transferring
public service supply to private sectors become is increasingly popular.
Actually, the public services provision has existed long ago. The history
shows that most of health care services have been undertaken on the basis
of the private sector, by midwives and charlatans. In developed countries,
strong urbanization and industrialization have resulted to the establishment
of labour groups which are self-organized to supply the service of health
care insurance through “illness-prevention funds”, or proposals on setting
up social insurance systems funded by the state. Just since the 20 century,
the state has played an important role in the provision of social services
such as education and health cares, and nowadays, in accordance with the
worldwide trend of state reforms, provision of public services are again
partly transferred to the private sector.

Box 1: Modes of transferring public services in the world

1- The state sells a part of or the whole assets of SOEs providing public
services to the private sector or co-operatives;
2- The state sells a part of shares in SOEs supplying public services to
the society;
3- The state lets the private sector or cooperatives hire enterprises
supplying public services;
4- Allotting public service supplying business to the private sector or
cooperatives;
5- Signing contracts or orders with enterprises and organizations on
public service supply as requirements by the state;

8
 6- Allowing enterprises and private organizations to take part in public
services provision while regulated by the state with rules and
regulations.
Source: Le Chi Mai (2003)
The fact shows that the state has more and more deeply entered activities
of public service supply, on environment cleaning, water and electricity
supplies, for instance. Besides, the private sector is allowed to provide
services of health care and education, on which the state plays a
fundamental role because they are directly related to development goals of
any single nation. In almost all countries in the world, there exist two
systems of public education and private education at the same time. The
development of private schools has facilitated competition on teaching
quality of the two systems. Of course, private schools are under control of
the state on faculty, assuring a standard and unified program. In the area of
health care, although in most nations, the state performs a significant role
on the provision of the service because it is a very special public
commodity, however, the state cannot be the only supplier of this service.
According to a survey document, spending of GDP on health cares has
increased remarkably in the period of 1965 to 1983 with the growth rate of
at least 50%, of which 5 nations have gained the growth rate of over 70%.
With such growth rate, it is difficult to sustain with state revenue, and
participation of the private sector is indispensable. In America, expenditure
share of the government on total spending on health care has accounted for
40% annually since 1974. The rest is contributed by funds from the private
sector, social organizations, of insurance fees.
Even in welfare states, such as Denmark, Ireland, and Sweden, the transfer
of public service supply to the private sector is also a focus of policy-
makers. In Denmark, for example, most of social services are provided by
the state, sponsored by the tax system with very high personal income tax
rates, however, competitiveness index of the country on public service
production is below the average level. Thus, since 2002, the target of
competitiveness, effectiveness, quality, alternative options are the first
priorities of Danish government. The government has created many
initiatives on competitiveness enhancement and encouragements of public-
private cooperation. Accordingly, public service supplying organizations
have to face with competition, while citizens have the right to choose
services supplied by the state or the private sector, opening markets for
new-suppliers.

9
The transfer of public service supply to the private sector allows the state to
use competition among public service suppliers to select the most effective
service suppliers, while tapping potentials of all social forces. The use of
market to supply services will decrease costs and improve services quality,
sharing burdens of the state and striving to build public-private cooperative
relationship. This is clearly demonstrated with the case of Ireland. Among
welfare nations, however, Ireland has traditionally maintained the private
hospital system for many decades. The existence of a private hospital
system is increasingly put pressure on public health cares facilities to
improve their quality, moreover, as an additional supplying source of
services for consumers, it has enriched their options. Furthermore,
competition policies (in terms of quality, fees, and market shares, etc) of
private hospitals have resulted to indirect impacts on the public health care
system, pushing them to a situation that requires reforms.
Allowing the private sector to take part in provision of public interest
services also brings about significant benefits. With the mobilization of
social capital resources for infrastructural development, including road
system, transportation, information, environment sanitary, etc, effects of
public service supply in these areas have strongly improved, associating
with a large saving of state revenue. To stress services such as sweeping
and clean, preparing, construction, and maintenance, costs are also
decreased as the mode of contract signing with other economic sectors is
applied. In Brazil, contract signing with private investors on road
maintenance has helped to save 25% of expenditures, in comparison to that
done by public companies. Similarly, by allowing private firms to
participate in domestic transportation supply, the government of New
Zealand has prompt competition among related supplying agents, thereby,
increasing quality of customized services, lowering transportation costs.
In addition, some activities of public service provision have also gradually
been transferred to civil social organizations. These organizations have
actively taken part in direct service provision to individuals and
communities, from health care, and education services to small credit loan
services, or career orientation training. In developing and developed
countries, many social organizations operate parallel with public service
supply agencies of the state. Social organizations often possess many
advantages as supplying public services, due to they have a very flexible
and more friendly operational mechanisms.
- Improvements on public service supply in the state sector itself
Even when the private sector and social organizations have increasingly
participated in public service supply, the public sector essentially remains a

10
supplier of majority of services. Therefore, regarding reforms of public
service supply mechanism, quality improvement of public service supply
by the public sector itself is very important.
Quality enhancement of public service supply is not a new issue. Right
from the beginning of 1980s, for example, France has provided an
experimental standard organization in state agencies. Given requirements
of the people who have become “high demanding consumers”, the quality
matter of public service provision by the state has been increasingly urgent.
The principle of quality on public service supply by state agencies was
officially mentioned in France’s Charter on PUBLIC SERVICES, dated 18
March 1992, and the document on French State, dated 26 July 1996. The
Charter provides solution to ensure the provision of essential services by
state agencies, including schools, hospitals, polices, post offices for remote
areas. It is important that the charter asked these agencies to set up
productivity index, and focused on cooperation between state agencies
supplying services and their users. Accordingly, each state agency must
strive to “let the people know well about their targets, adjust qualitative
indexes on the basis of people’s requirements on service using”.
The state is also carrying out many different reforms with a view to
enhancing public service supply effectiveness by state units. Some
developed countries such as England, and United States, are currently
testing some measures to increase competitiveness within the public sector
to improve the provision of public services impossible to be transferred to
non-state sectors. For example, England has created an inner market within
the health care area by turning local officials and unprofessional doctors
into representatives of patients to purchase health care services. Such an
arrangement has created competition among hospitals, and acted as a non-
centralized mechanism to distribute resources. In addition, decentralization
of related provision by decentralizing, empowering to different local
authorities is also an effective way to put pressure on competition,
especially in local public service supply. Under such context, local
authorities have greater flexibility in providing public services in
accordance with local conditions, and heavier responsibilities.
In summary, the scope of public services transferred to private sectors and
social organizations is increasingly extended. Almost nations apply the
principle that areas that markets are able to perform should be gradually
transferred, at a certain level, to other sectors by the state. With services
that impossible to be transferred to the private sector and social
organizations, the state has to play the role of a core supplier, and carry out
reforms on the public sector itself to improve quality of these services. In

11
general, no matter whether the state supplies public services directly or
transfers to other sectors, as a warrant of social equality, the state is still
responsible for achieving main targets of public services activities by
controlling, regulating, and protecting to facilitate the provision of such
services by markets and the society.
II. CURRENT SITUATION OF PUBLIC SERVICE SUPPLY IN
VIETNAM BEFORE LAUNCHING THE POLICY OF PUBLIC
SERVICE SUPPLY SOCIALIZATION
II.1. Some achievements regarding public service supply
In Vietnam, prior to renovation process and the introduction of public
service supply socialization policy (1997 and earlier), the state had been in
charge of providing most of public services. The state invested significantly
in constructing of schools, hospitals, purchasing equipments and providing
free services. Initially, the health care and education systems of Vietnam
were highly appreciated by international communities. Other public
services, such as: cultures, information, public lighting, electricity and
water supplies, housing services, waste collection, etc, were directly
supplied by the state to the society. Thus, all citizens had equal
opportunities to enjoy public services provided by the state.
As the matter of fact, with the concentration of the state to public services,
Vietnam’s human development index (HDI) is relatively high in
comparison with its economic development level. HDI consists of some
basis factors of human lives, such as: longevity, education level, and real
capita income. If in 2004, while Vietnam ranked 124 in term of GDP per
capita, its HDI was 0.691, ranked 112 of 200 countries in the world.
Particularly, in education, with the investment of the state, Vietnam has
completed semi-secondary education for all, now is completing secondary
education for all, and has completely eradicated illiteracy. Its vocational
training and university system has been more and more extended.
Regarding health care, the public health care system has been widely
established and developed.
However, similar to many other countries, Vietnam is not an exception as
the state has some weaknesses in its provision of public services. At
present, state agencies who account for bigger shares in education, health
care, science and technology, culture, sports and physics, mostly operate
under the public non-productive mechanism, with their budget mainly
relied on the state. Maintaining such mechanism leads to some
shortcomings and irrationality in public service supply activities, and it is

12
the main reason why sectors of culture, society, and physics and sports, etc,
develop so slowly, creating many negative phenomenons in the society.
II.2. Some shortcomings in the state provision of public services
II.2.1 Budget shortage for public service supply
Although the state budget for non-productive activities has increased more
quickly than that for other fields, it is still limited and no enough to ensure
necessary expenditures for state agencies supplying public services. First of
all, it is not enough to pay salary for staff working for public service supply
industries, especially for teachers, health care staff, environment and
sanitary workers, and secondly, it is not enough to meet development
requirements. Meanwhile, people needs regarding these services are rapidly
increasing, with higher requirements on quality as their living standards
improved. Such situation results to shortcomings on state’s public service
supply, and makes negative phenomenon arise, destroying social moral
basis.
II.2.2. Irrational and unscientific arrangement of public service supply
Modes and procedures of public service supply remains cumbersome and
bias to creating advantages for the supplying party but not aiming to
efficiently meet requirements of people. Evidents are found clearly in
public administration services. To receive some permits, people have to
knock doors of various state agencies, time for the settlement often long,
making some enterprises miss their business opportunities, or wasting time
of the people. For such reasons, to save time and energy, many people have
to choose a way of letting ‘service brokers’ fulfill these procedures for
them. Additionally, administrative procedures are seen vague, inconsistent,
untransparent, and unforeseeable, seeming to deal with just current
situations, being positive to rapidly developing requirement of the reality.
Unfortunately, some places have witnessed commercialization of services
provided by the state.
The fact that some state units supplying public services are put under
authorities of controlling agencies like administrative units leads to a
situation that these units are unable to taking advantage of their sovereign,
self-responsibility for their performance and development. These result to
the sluggish in creativeness and effectiveness enhancement.
II.2.3. Shortcomings of the state administration apparatus
State apparatus structure is exposing many weaknesses, which is
inconsistent with functions of the state administration under conditions of a
market economy, and therefore, unable to supply services as demand of the

13
reality. Ministries, branches, and localities still follow old management
models. Many services of high demand by the people are not provided
efficiently, information provision, consultancy, and job creation services,
etc, for example. In addition, the regulation on power, and responsibility
division remains unclear, and limited cooperation among state agencies in
interindustry works have decreased quality of the state public service
supply. Particularly, in agencies in charge of direct contact with citizens,
attitude of many civil-servants are seen bureaucratic, troublesome, and
cumbersome to people.
II.2.4. Low effectiveness of public service supply
The all above mentioned factors lead to low effectiveness in the state’s
public service supply. Generally, public services provided by the state are
inadequate not only in quantitative term but also in qualitative term, due to
the amount of public services supplied by the state is too large and the
public service supply system remains too limited, regarding quality and
capacity of management, execution, and implementation. Monopoly of
many state agencies on the provision of some public services prevents them
from facing with real competition, thus, they lack of motivation to improve
their performance and to lower costs. To services that users have to pay
fees, prices of some services do not fully reflect their costs because the
prices set by the state often lower than costs, while prices of other services
set by the supplying units are often over valuated. It is possible to
demonstrate this matter with the electricity industry, a sector that the state
holds monopoly on supplying. The people and enterprises are disagreed
because the price keeps increasing, causing significant impacts to the live
and the production. Whereas, the electricity authority has presented many
reasons to raise the price. The electricity price may be unlikely to increase,
or just increase at a reasonable rate if the electricity industry improves its
management, avoiding electricity waste, and decrease corruption,
wastefulness in the construction and the operation of electricity plants and
the electricity distribution network. The scandal on electronic electricity
meter assembly in Ho Chi Minh city, that has been critically condemned by
the public union over the last time is an evidence for the bureaucracy and
ineffectiveness of state authorities regarding public services supply.
II.3. Some shortcomings of public services supply in health care and
education fields
II.3.1 In the health care area
Previously, the state subsidized for almost all health care services supply
with a galitarianism regime of free medical examinations and treatments.
Due to difficulties relating to state budgets, since 1989 the state has

14
adopted the regime of charging a part of hospital fees so as to share the
burden with the State. In general, however, public health care facilities still
mostly rely on funds from state budget, despite a fact that these funds can
afford just 40% of the healthcare area’s expenditures.

Such shortage of budgets results to some signals of scandals in the area. In

addition to official fees, patients often have to pay for unofficial and
untransparent costs for medical examinations and treatments in public
health care facilities; the phenomena that health care staff asking for
money is rather popular and stinging to the society; charging a part of
hospital fees also creates much intrication to the relation between doctors
and patients, the rich and the poor, and difficulties to the management of
health care facilities. Especially, the current overloaded situation happened
to many provincial and central-leveled hospitals leads to many critical
shortcomings regarding human, and financial resources, adversely
impacting on quality of medical examination, treatments, and cares for
patients. In addition, dividing state budgets based on numbers of hospital
beds has been seen unequal between overloaded hospitals and others with
low hospital bed usage. The more overloaded the hospital, the lower per-
hospital-bed budget. This fact pushes hospitals with high bed usage into a
critically difficult situation of granted budget and actual expenditure
imbalance, such factor results to poor quality of state hospitals’ services.
The above mentioned situation shows that it is necessary and urgent to
allow the private sector to enter health care area. Of course, it is impossible
to give full power regarding the area to the private sector. If that is the case,
the rich will be fully taken care of, while the poor have to suffer from
illness and diseases because they can not afford medical treatments.
Therefore, together with transferring a part of health care services to the
private sector, the State has to assure equal access to minimum health care
services (which will increase along with the country’s development) for
every citizen.

II.3.2 In the education area

In Vietnam, education is seen as the first national policy, thus, state budget
for the area keeps increasing. In 2005, investment in the area reached VND
4 billion (of which 2 billion contributed by the state and 2 billion
contributed by the people), adding USD 900 million from foreign loans and
VND 3000 billion from education bonds. The total of these numbers is
relatively high on the basis of Vietnam’s current general revenue.
Education reform has been carried out for many years, and has initially

15
gained some certain achievements. However, Vietnam’s education system
remains alarmable in many terms, resulting to decline of education quality,
raising a big risk to the general national development.
In the education field, there is an imbalanced development among
vocational training, university education, and high education; scale, quality,
and effectiveness of vocational training have not satisfied requirements of
national industrialization and modernization; teachers remain inefficient,
and their quality has not meet needs of educational reform; education
management remains limited, especially regarding irregular education and
non-public education; some teachers and schools remain inactive to
renovate learning and teaching methods; there are some shortcomings
related to conditions warranting education development; education in
isolated and remote areas faces with many difficulties; academic title and
distinction bestowment is not priory on the basis of quality standards, this
has undermined reputation and prestige of teachers in the society.
Particularly, one of burning problems of Vietnamese education is the going
in search for degrees, trading on “marks”, moral depravity of some
teachers. Widespread private tuition has been leading to many negative
aftermaths, causing notably adverse impacts on education and training
quality, teachers’ prestige, and pupils’ learning capacity and health.
The current status of education industry puts forwards a matter that it is
necessary to undergo reform with a view to enhancing education quality. In
Vietnam, the question of whether education should be considered a special
commodity is currently controversial. It is clear that if the private sector is
allowed to play a dominate role in education service supply, many capable
people can not afford school fees. The society will suffer from a big loss
because it will be impossible to tap brainpower of these people. Thus, for
the equality, the State is responsible for providing the whole public with
this service at a certain level, setting necessary preconditions for every
citizen developing their ability. In this term, the State has to play a crucial
role in education development, and in education reform towards a
comprehensive qualified education system; it is the state to be responsible
for overcoming current shortcomings of the system. With new Party and
State policies on education socialization, allowing the private sector and
social civil organizations to participate in this field will partly contribute to
the promotion of education and training cause to a new stage.
In short, in public service supplying field, the State has done its utmost to
satisfy requirements of the society. To a certain extent, the State has
succeeded to assure the supply of fundamental public services to the whole
society. In some fields, such as education, health care, Vietnam has gained

16
remarkable results. However, apart from above achievements, there remain
some mistake in public service supply of the State due to tight budget, poor
management capacity, and a bureaucratic and problematic administration
apparatus. For better public service supply, it is necessary to gradually
improve performance of public service supplying bodies, to reform the
organizational structure and the process of public service supplying. It is
important to stimulate the competition in public service supply through
transferring a part of public services to the private sector and social civil
organizations. These contents are also reflected in policies on public
service supply mechanism reform, put forwards by the State in recent
years. This will be presented in below section of the paper.
III. POLICIES ON REFORMS OF PUBLIC SERVICE SUPPLY
MECHANISM
Given the market economy development process in Vietnam, subsidies
provided by the State to most of social public services encounter
increasingly difficult contradictions. Concretely:
- The contradiction between a huge amount of subsidizing expenditures
and fiercely limited state budget. Vietnamese economy is at a relatively
low development level, income per capita was just about USD 600 in 2005,
state revenue accounts for 25 percent of GDP, amounting to VND 210
billion. With such income, state subsidies for most of public service
supplying activities have made up an overloaded burden to state budget.
- The contradiction among the workload of public services supplied by
the state and the executive capacity of the state apparatus. On the one hand,
the workload of public services supplied by the state is too wide, covering
many fields; on the other hand, the state apparatus in general, and the
public service supplying system in particular remain limited in terms of
management, execution, and implementation capacities, therefore public
services are of low quality, failing to fully meet requirements of users.
Monopoly in public service supply makes bureaucratic and authoritarian
behaviors of the state apparatus increase.
- The contradiction between rapid population increase and limited
public service supplying capacity of the State. Over the past years,
Vietnamese population has increased with a significant rate, 2.1 percent in
average during the period of 1980-1995, and 1.46 percent during 1996-
2005. Given the already tight budget revenue, and increasing needs for
economic development expenditures, the above mentioned population
growth rate makes per-capita public service spending decrease.

17
In addition to these contradictions, science and technology advancements
in service field, remarkable increase in the demand on public services of a
part of population - whose income is relatively high, the competition of
market mechanism, and the trend of decentralizing the State’s activities,
etc., make the State no longer be able to entirely subsidize public services.
The State has effectuated public service supplying mechanism towards
encouraging all economic sectors and social subjects to take part in public
service supply (socializing public service supply, in other words).
III.1 Policies on the socialization of public service supply
Policies on the socialization of public service supply dated back in the
second half of 1990s. At the VIII (1996) National Party Congress, the Party
vowed: “to effectuate the policy of socializing culture, information,
gymnastics and sports, health care, population, family planning, education
activities, and other social activities, aiming to improve material, spiritual,
and physical standard of the people.” This policy was further confirmed in
the IX Party Congress Documents, in some Resolutions of Central Party
Plenum, in the General Program on state administration reforms for the
period of 2001-2010 of the Government and was concretized in many legal
documents issued by the State. Notably:
- Decision No.90/CP dated 21 August 1997 of the Government on
directions and policies on the socialization of education, health care,
culture activities, providing legal basis for socialization activities regarding
this field.
- Decree No.73/1999/NDCP dated 19 August 1999 of the Government on
policies encouraging the socialization of health care, education, culture,
and sport activities, stating detail regulations on socialization encouraging
policies.
- Decree No.31/2005/NDCP dated 11 March 2005 of the Government on
production and supply of public products and services, allowing enterprises
of all economic sectors and cooperatives to take part in public service
production and supply, in forms of ordering, bidding, or plan allotting.
- Decision No. 05/2005/NQCP dated 18 April 2005 of the Government on
accelerating the socialization of education, healthcare, culture, gymnastics
and sports activities, with a view to unifying concepts and policies, and
clarifying mechanisms, policies, and measures to accelerate the
socialization of the four areas mentioned above.
- Over nearly 10 years carrying out the socialization of public services,
particularly in fields of education, healthcare, culture, and gymnastics and
sports, fundamental contents of the socialization mechanism has been

18
gradually clarified. But first of all, it is necessary to define the content of
“socialization” concept. This concept can be interpreted with different
meanings. In this paper, socialization is interpreted as follows:
- The process of campaign and organization for the participation of the
people and the whole society, the establishment of responsible
communities of Party, state, union bodies, social politic organizations, and
people classes.
- The process of activity diversification, providing opportunities for active
and equal participation of all.
- The process of investment resources diversification to attract and tapping
all social potentials.
Turning back to public services socialization mechanism, actually, this is a
requirement of reviewing the state’s functions, tasks, and powers, so as to
gradually transfer some social service functions to non-state organizations
and agencies. Therefore, the new mechanism implies to important contents:
(i) reforms of state bodies’ (public facilities’) activities regarding public
service supply; and (ii) mobilization of non-state subjects’ (non-public
facilities’) participation in public service supply. Accompaning with the
two above contents is the requirement to strengthen the dominate role of
the state and bring into full play roles of people in the establishment and
supervision of public service supplying facilities. Public services
socialization activities aim to promote intellectual and material potentials
in the population, mobilize the whole society for public service supply, and
create favourable conditions for the whole society, especially beneficiaries
of social welfares and the poor, to access high quality public services.
Detail contents of socialization mechanism are reflected in the following
points:
- Firstly, to transform public agencies supplying public services and
following highly subsidized and administrative mechanism into non-profit,
self-controlled agencies without widespread subsidies. These agencies are
full self-controlled in terms of organization and management; properly
performing their goals and responsibilities; accounting all of their incomes
and expenditures, and balancing their accounts; always improving their
service quality; assuring equal rights and access of beneficiaries; etc.
Together with transformation is renovation on the service fee payment
mechanism. Fees will be fixed on the basis that it is enough to fund all of
fundamental expenditures and to save for development investment,
removing other fees.

19
- Secondly, to transform state public service supply facilities into private
forms or enterprises following non-profit or profit mechanism. State assets
will be transferred (allotting, selling, or leasing) to non-state subjects.
Transfer decisions will be made by authorized agencies.
- Thirdly, to encourage the development of non-state public service
supplying facilities, in forms of (domestic and foreign) private facilities or
enterprises. The ownership of these facilities will be defined in accordance
with the Civil Law. These facilities can follow non-profit or profit
mechanism. If following non-profit mechanism, apart from money
allowed to use with a view to warranting reasonable interests of investors,
supporting social welfare policies of the Party and the State, and helping
the poor, a large part of profit will be used to fund development
investment. If following profit mechanism, earnings may be divided to
individuals and will be taxed.
The dominating role of the state will be performed through further increase
investment from state budget while tapping investments, and contributions
from the society, completing institutions, and reforming macro-
management. In more detail, the State provides preferential policies, in
terms of taxes, credits, lands, and human resources, etc., to transforming
public facilities and new-born non-state facilities. The State creates a fair
and healthy development and competition environment in accordance with
laws and regulations, so as to stimulate the development of public and
private facilities in both terms of scale and quality. Meanwhile, the State
intensifies the work of inspection and examination, bringing into full play
the role of unions, and masses’ organizations, particularly professional
associations, in supervising operations of socialized public service
supplying facilities.
The above contents have fundamentally clarified public service supplying
mechanism. The new mechanism is entirely different from the subsidized
one. By adopting the socialization mechanism, the State can release its
burden of obstinate subsidies existing for many years. Workload of state
bodies has reduced due to some work previously undertaken by the state
now transferred to non-state subjects. More over, the socialization will help
to downsize the state workforce, streamlining the state apparatus, thereby
reducing state budget expenditures. If not transforming into private
facilities of enterprises, public facilities are allowed to be self-controlled in
terms of management, expenditure accounting, and account balancing,
independent of the state budget. This requires public facilities to renew
their way of thinking, appropriately applying economic thoughts on
management work so as to make effective investment into social welfares

20
by state capital and other mobilized capital resources in accordance with
laws and regulations.
The socialization mechanism is also definitely different from market-
oriented commercialization mechanism. An outstanding difference is the
non-profit nature of public service supplying facilities (both state and
private ones). One of major targets of public service supplying socialization
put forwards by the Party and the State is to effectuate social welfare
policy, ensuring access to public services by the beneficiaries of social
welfare as well as the poor, etc. Therefore, the State particularly
encourages the development of non-profit facilities. Even to facilities
operating for the sake of profit, the State still heightens social
responsibilities of these units, while providing incentives to warrant better
services for the society.
However, there remains some unclear points. In terms of ownership, up to
now, no clear regulation has been introduced regarding ownership of some
types of public service supplying facilities, such as semi-public, and public
facilities which have transformed in normative term but not ownership term
(allotment, or leasing). Thus, there remains room for subsidies. Regarding
operating nature of public service supplying facilities, differences between
non-profit and profit are found vague. As a matter of fact, this has partly
resulted to the situation of over-commercialization in some field such as
education, health care, and culture, etc.
III.2. Wrong concepts related to public service supply mechanism have
been existing
Relatively wide implication of “socialization” conception results to various
interpretations of the mechanism. This is one of notable reasons which
have restricted achievements of public service supply socialization over the
last years in Vietnam.
III.2.1. Taking socialization for privatization
With its widest meaning, the socialization of public service supply is the
transfer of some public services from the state sector to non-state sectors.
Thereby some people take socialization for privatization. From the
viewpoint of contents of socialization mechanism, the transformation of
public facilities into non-public ones, and encouraging the development of
non-state public service supply facilities tend to be confused with
privatization. This way of interpretation is even more strengthened as the
private sector, particularly enterprise forms, is allowed to take part in
public service supply. However, a fundamental difference from
privatization is that socialization still focuses on responsibility, guidance,

21
and ordination of the State to public service supply. To non-state facilities,
the State always encourages their operation with non-profit mechanism.
This means it is not allow using earnings to distribute to individuals but to
make development investment, affording social welfare policies, and
supporting the poor. Thus, operation with full commercialization
mechanism is limited. In addition, there remains a significant part of public
facilities who do not transform their ownership but just renovate their
operating regime, therefore, it is impossible to be seen as privatized.
In fact, over the last years, it is the above wrong concept lead to adverse
effects in certain fields, including health care, education, and culture. In
many localities, the phenomenon of widespread and unhealthy
commercialization of occurred in such fields. For example, it is widespread
extra-teaching and learning; teachers just give cursory lectures at schools,
and after schools some of them stuff pupils with lessons while taking high
tuition fees, teaching and learning just for sakes of certificates and
examination, etc; in the health care field, they are irrationally high prices of
treatment medicines, the abuse of expensive medical examination and
treatment techniques in non-public healthcare facilities, etc. These
phenomena are highly concerned by the public because they are closely
related to lives of majority people, and very sensitive problems. Many poor
people who should be aided by the state find unable to access with public
services, or if they are, they have to burden expenditures that beyond what
they can afford. Making clear contents of a socialization mechanism will
partly help to overcome these wrong concepts.
III.2.2. Thinking that socialization is material contribution by the people
only when the state budget is limited
According to the above analysis, the implementation of public service
supply socialization will partly settle down the contradiction between too
big subsidies expenditures of public services and very limited state budget.
This means expenditures for public services, through socialization, will be
shared by the state budget and other resources of the society; and to some
extents, it requires contribution from the people. This again leads to another
misunderstanding that socialization is only a measure to mobilize proper
wealth and materials of people in condition of limited state budget,
effectuating the policy “the state and the people act together”. However, as
analyzed in the Section III.1, the socialization mechanism is not that pure
and simple. The common guidance in the Resolution 90/CP (1997) stated:
“Socialization is to extend investment resources, and tap human, material,
and intellectual potentials in the society”. The Prime Minister Phan Van
Khai confirmed in his address at the National Conference on fully alive to

22
Resolution No. 05/2005/NQ-CP (dated July 26, 2005): “It is necessary to
clearly emphasize that socialization is to mobilize material, intellectual,
and spiritual strength of the whole society to better meet daily demands of
people on education, healthcare, culture, gymnastics and sports, better
implement social equality in these fields”. Thus, contribution resources of
the people includes human (intellectual, spirit, and physicality), material,
and financial resources, not wealth and materials alone. Moreover, public
service supply socialization does not only originate from the limited
condition of state budget, neither just aim to solve the limitation of state
budget. Even when Vietnamese people enjoy high income, and the state
budget is abundant, it still requires carrying out the socialization, because
education, health care, culture, gymnastics and sports are long term causes
of the people, and they will unceasingly develop with robust resources
from all people.
The above wrong concept is also a crucial reason leading to the over-
commercialization of some public service sectors. Due to taking
socialization as the contribution of wealth and materials, contributing
subjects often do this for material benefits. That means taking their
contribution as actual business activities but not for the industrial
development or for social welfares. In some cases, unfair division of
interest has resulted to failures, causing losses for the society. Scandals in
some private universities over recent years are typical evidences.
III.2.3. Thinking that socialization is just implemented in non-state public
service supply organizations, while state public service supply ones are not
required to undergo socialization
This concept develops from an implication of socialization, which allows
participation of non-state subjects in public service supplying. However,
this is one of contents of socialization. As confirmed above, socialization
implies two important contents, that are: (i) reforming state body’s
activities relating to public service supply; and (ii) mobilizing non-state
subjects’ participation into public service supply. Thus, understanding that
socialization is just implemented in non-state public service supply
organizations without accounting for reforms of state organizations’
activities is unfair, inadequate, and may distort targets of socialization.
Resolution No.90/CP (1997) emphasized: “Socialization is to build a
responsible community of people classes for the establishment and
improvement of a healthy socio-economic environment, faciliting
education, health care, and culture activities. In each locality, this is the
responsible community of Party Committees, People’s Committees, state
agencies, public unions, economic organizations, enterprises located in the

23
locality, and every individual, etc. In addition to strengthening state
facilities, it is necessary to widely develop activities carried out by
cooperatives or individuals within the framework of the Party’s policies
and the state laws”. In fact, reform of state organizations’ activities is as
important as encouraging the participation of non-state organizations.
This wrong conception is a reason for a dual-natured effect as follow: on
the one hand, it is the widespread and partly unhealthy development of
non-state facilities in some public services; on the other hand, it is the
sluggish in management reform in public facilities. Resolution
No.05/2005/NQ-CP assessed: “In education, health care, culture, and sport
fields, majority pubic facilities still apply management mechanism as
administrative agencies, therefore dynamics, self-control, and
responsibility have not been promoted”. A general effect is that
socialization rate is found slower than potential level and the scheduled
target put forwards in Resolution 90/CP.

IV. IMPLEMENTATION OF THE NEW MECHANISM:

ASSESSING THE ACHIEVEMENTS, DISCOVERING THE
PROBLEMS AND RECOMMENDING THE SOLUTIONS

IV.1 Assessment of the achievements

Up to now, socialized mechanism in supplying public services has
been implemented for 8 years in our country which mainly focuses on
education, health care, culture and sports. Reviewing this process, we can
assess our achievement as follows:
- The new mechanism has contributed to create a basic change of
social awareness, build up a responsible community of the people and
expand the public's participation in caring the sectors that public services
are socialized. Besides, it improves step by step the awareness of different
subjects in the society about the trend, targets of socialization, the content
of socialized mechanism as well as the solutions to implement it. This is an
important basis to create the unity of the society for socialized mechanism
in supplying public services.
- The social potentials and resources have been initially mobilized for
developing some public services; creating jobs and stabilizing lives of
hundreds of people.
- The public sector has renovation in its operation mode. Non-public
sector is developed with new forms and modes of operation which are
plentiful and diversified and contribute to improve service quality,
intellectual standards of the people, health care and cutural life of the
people.

24
 - Socialization gives hands to bring about social equality by creating
more chances for accessing and enjoying services, raising the proportion of
state budget's expenditure for priority investment for remote and
disadvantaged areas to support the poor.
The key achievements of the four socialized sectors under the
Resolution No. 90/CP, Decree No. 73/1999/ND-CP and Resolution No.
05/20085/NQ-CP are as the following:
IV.1.1. Education and training
Since the appearance of socialization guideline in the late 1980s and
the early 1990s, our Party and State took the initiative in a large reform in
education and training that is to develop an non-public education and
training system in parallel with the public one. By the time the Resolution
No. 90/CP was issued by the Government, Vietnam has had an non-public
education and training system of all classes. This is an extremely important
basis for strengthening education and training socialization in the following
years. Implementing the Resolution No. 90/CP, education and training
socialization has developed deeply and significantly contributed to the
development of our education and training cause.
- Firstly, public awareness of the role of education and training
socialization has basic changes. Education and training is considered
motivation to develop the socio-economy so it is put on the top of the
national policy. Among the solutions to education and training
development, socialization is regarded as a strategic solution aiming at
mobilizing every social resources to develop education, meeting the study
demand of all people classes and training the human resource for our
industrialization and modernization cause.
- Secondly, reforming and raising the quality of pulic schools. The
public education system is developed strongly with all the classes and
training levels from pre-school to higher education in the whole country.
Following the increased state budget for education and a speed-up in
implementation of the 6th National Central Conference's Conclusion
(Session IX) on education and training development, the system of public
school is strengthened investing material facilities, improving the capacity
of teachers and management staff, reforming education programs. The
education network has widened to every commune and precinct over the
country that contributed to eliminate communes having lack of pre-school
education, reinforce firmly anti-illiteracy results and universalize primary
education. Besides, the planning of universities network is implemented
actively. In remote and disadvantaged regions such as The North West,
South central part, Mekong Delta, universities and colleges are established
to create good conditions for human resource training on the spot. Two

25
national universities (Hanoi National University and Ho Chi Minh city
National University) are reorganized; three local universities (Thai Nguyen,
Thua Thien - Hue and Da Nang university) continue to be upgraded and
developed; the key universities of pedagogy, technology, agriculture and
economy are strengthened.
- Thirdly, diversifying types of education and training schools. Beside
the development of public schools, non-public schools at all classes have
been established and developed broadly in 64 provinces of the country
(Table 1). The non-public schools can be divided into three administrative
types are as below:
(1) Semi-public schools, established by the Government on the basis
of mobilizing resources of organizations and people of every economic
sectors to invest to build material facilities; or state-owned semi-public
schools, managed by the Government but supported by school fees of the
pupils.
(2) People founded schools, established and invested by social and
vocationally social organizations, non-government organizations and
economic organizations. These schools also pay off by themselves as semi-
public schools.
(3) Private schools, established and invested by a person or a group of
people.
Table 1: The proportion of non-public schools at all classes from the
school year 1999-2000 to 2004-2005

1999- 2000- 2001- 2002- 2003- 2004-

2000 2001 2002 2003 2004 2005
1. Nursery 833 735 251 157 129 67
- Non-public 449 479 86 49 46 9
- Proportion (%) 53.90 65.17 34.26 31.21 35.66 13.43
2. Kindergarten 3909 3512 3165 3117 2872 2738
- Non-public 1880 1669 1590 1511 1165 939
- Proportion (%) 48.09 47.52 50.24 48.48 40.56 34.30
3. Pre-school 4856 5394 6112 6441 7103 7648
- Non-public 2957 3269 4319 4556 4891 5011
- Proportion (%) 60.89 60.60 70.66 70.73 68.86 65.52
4. Primary school 13387 13738 13897 14163 14346 14518
- Non-public 76 74 77 79 77 75
- Proportion (%) 0.57 0.54 0.55 0.56 0.54 0.52
5. Junior-secondary 1429 1304 1270 1197 1139 1034
school 7 6 7 8 8 6
- Non-public 0.49 0.46 0.55 0.67 0.70 0.58

26
 - Proportion (%)
6. Secondary school 7381 7733 8092 8396 8734 9041
- Non-public 86 98 95 82 81 61
- Proportion (%) 1.17 1.27 1.17 0.98 09.3 0.67
7.2-3 secondary school 680 649 569 523 455 396
- Non-public 187 168 144 122 106 98
- Proportion (%) 27.50 25.89 25.31 23.33 23.30 24.75
8. High school 1083 1251 1393 1532 1685 1828
- Non-public 262 346 398 442 494 509
- Proportion (%) 24.19 27.66 28.57 28.85 29.32 27.84
9. Vocational school 245 253 252 245 286 285
- Non-public 0 10 11 14 40 47
- Proportion (%) 0.00 3.95 4.37 5.71 13.99 16.49
10. College 84 104 108 115 119 130
- Non-public 5 5 6 6 8 7
- Proportion (%) 5.95 4.81 5.26 4.95 6.30 5.11
11. University 57 62 66 70 76 93
- Non-public 5 5 6 6 8 22
- Proportion (%) 8.77 8.06 9.09 8.57 10.53 23.66
Source: Ministry of Education and Training (2005), Plan on Developing
education socialization in the period of 2005-2010.
The non-public education and training schools have made an
important contribution to our education cause. Socializing and diversifying
education forms give hands in raising chances of study for people, make
conditions for many children, pupils and students to study, thence equip
necessary knowledge to satisfy job demands for a part of people. The
number of pupils and students study at non-public schools at all classes is
tending to increase (Table 2).

Table 2: Proportion of pupils and students of non-public schools at at

all classes from the school year 1999-2000 to 2004-2005

1999- 2000- 2001- 2002- 2003- 2004-

2000 2001 2002 2003 2004 2005
1. Pre-school
education 2496788 2480272 2487755 2547430 258883 2754094
- Non-public 1329531 1311778 1542660 1583189 7 1603984
- Proportion (%) 53.25 52.89 62.01 62.15 158553 58.24
8

27
 61.25
2. Grade
education 1780615 1786939 1789760 1779699 175784 1724629
- Non-public 8 8 4 8 97 9
- Proportion (%) 905866 969264 983030 992616 100089 993565
5.09 5.42 5.49 5.58 1 5.76
5.69
3. Vocational
education 227992 255323 271175 309837 360392 466588
- Non-public 0 4434 8331 20447 55658 84616
- Proportion (%) 0.00 1.74 3.07 6.60 15.44 18.14
4. Higher
education 844592 875592 923176 960692 103244 1319754
- Non-public 107538 104265 100990 111856 0 178036
- Proportion (%) 12.73 11.91 10.94 11.64 137122 13.49
13.28
Source: Ministry of Education and Training (2005), Plan on Developing
education socialization in the period of 2005-2010.
- Fourthly, strengthening mobilization of non-budget capital for
education and training. In fact, along with increasing state budget for
education and training, yearly non-budget capital for it also increases
significantly. During the past years, state budget for developing education
and training increases gradually, from 15.1 percent of the total state
expenditure in 2001 to 15.6 percent of it in 2002, 16.4 percent in 2003, 17.1
percent in 2004 and 18 percent in 2005. Besides, other mobilized financial
resources also increase continually including school fees, contribution for
school building and other ones; extracts from scientific research,
manufacture, services; spontaneous contributions from socio-economic
organizations and sponsors, etc. These non-budget financial resources are
estimated to take account for 25-30 percent of the total financial resourse
invested in education and training.
According to the 2002 survey of household living standards, the
financial contribution of the people for primary education takes account for
27 percent, and that for secondary education is 41 percent and for high
schools is 48 percent. About 30 percent of pupils of long term vocational
education, 90 percent of pupils of short term vocational education
contribute school fees themselves. In addition, about 42.1 percent of the
source of financial income of universities in 2002 comes from non-budget
resources in which school fees and charges are 35.6 percent, extracts from

28
research contracts and services are 1.2 percent, sponsors are 2.7 percent
and others are 2.6 percent.
- Fifthly, widening the cooperation with other countries,
international organizations, foreigners and oversea Vietnamese in order to
exploit all overseas potentials for education and training development. To
do that, the Government issued legal documents aiming at encouraging
foreign investment for education and training sector such as: permitting to
establish 100% foreign capital education and training centres in Vietnam;
extending the association between inner education and training centres and
foreign organizations, etc. Thanks to adequate policies, education branch
has taken the advantages of every foreign financial supporting resource
through bilateral and multilateral programs with foreign countries,
international organizations and non-government organizations to strengthen
the investment for education and training. During the past 10 years, there
are about 114 cooperated programs and projects with the total capital over
900 million USD. Educational cooperations with foreign countries and
study abroad is rather developed. Many Vietnames cadres, teachers and
scientists have gone abroad to exchange ideas, improve qualification of
teaching and scientific research. On the other hand, many foreign scientists
and oversea Vietnamese have come to Vietnam to take part in teaching
programs and technology transfer favourably. The number of scholarships
and receiving scholarships for education offerred by international
organizations and individuals becomes increased.
IV.1.2.Heath care
Protecting the public's health is one of the basic issues in human
development. Thus, our Party and Government has proposed a general
target of the public health-care cause, that is to decrease the proportion of
deseases, improving physical fitness, raising longevity, and trying to meet
the higher and higher demand of every classes of people, ensuring our
public's health at the average level in comparison with other countries in
region by the year 2020. To obtain this target, public heath socialization is
considered an extremely important measure. Reviewing nearly 10 years of
implementing socialization according to the Resolution 90/CP, our public
health branch has gained the following key achievements:
- Firstly, widening and diversifying activities of protecting, caring
for and improving the public's health. The Party and goverments at all
levels have paid attention to guide these activities and encouraged
industries and social collectivities to co-ordinate with the public health
branch; established Steering Committee at all levels to steer, co-ordinate
and enhance the whole society to take part in activities of protecting, caring
for and improving the public's health. Owning to that many public health

29
programs gained their targets such as opening vaccination, family planning,
preventing and combating malaria, etc.
Preventive medicine work has attracted the active participation of the
people. Their knowledge and awareness of protecting and caring for their
health themselves, their familly’s health and community’s health have been
improved. The communications network of health education was
established aiming at propagandizing and enhancing the whole public to
participate actively in protecting, caring for and improving the public's
health. The mass media frequently broadcasts news of pubic heath
activities, propagandizing to prevent and combat diseases, implementing
hegienic and healthy lifestyle.
Some models of charity socialization were set up and developed such
as: free surgery for vulnerabled children by the Children protection
Association; free cooking for poor patients by Hospital protection
Association, etc. After the Prime Minister’s issuance of the Decision No.
139/2002/QD-Tg on October 15, 2002 on medical examination and
treatment for the poor, many organizations and individuals made financial
contribution to the Fund for supporting patients of serious and costly
diseases.
- Secondly, strengthening and developing the pulic health service
system. During the past years, the public health service system in our
country continues to develop and keeps the leading role in supplying heath
services. The health service system has been set up in hamlets, supplied all
precaution health services and undertaken the most services of medical
examination and treatment.
Commune medical stations have been step by step built up and
upgraded by the state budget and ODA projects. Some medical stations
were built owning to the support and contribution of non-government
organizations or enterprises and individuals. Up to now, 15 percent of the
total communes has reached the national standards of health service.
The central hospitals and some provincial ones have been equipped
modern equipments. Three specialized health sevice centres (Ha Noi, Ho
Chi Minh city and Hue) are being built. The public health branch is also
building up the schemes of forming and developing regional health services
to supply high-tech and high quality public health services for the people.
- Thirdly, developing health insurance. It is a form of paying in
advance in medical examination and treatment and has a highly socialized
character. The proportion of hospital fees and health insurance in state
budget’s regular expenditure for hospitals increases gradually. Indeed, the
proportion of the state budget in hopitals’ regular expenditure decreases
from nearly 70 percent in 1994 to 59 percent in 2002. Evenly, this number

30
of some central hospitals and provincial ones is only 20 percent. The
relative proportion between source of revenue from hospital fees and
medical insurance also changes. According to the survey, the growth rate of
medical insurance and the income of it are higher than those of hospital
fees.
- Fourthly, diversifying the types of medical examination and
treatment. Along with consolidating the system of public health service,
during the past, the network of non-public health service including semi-
public, people founded and private one developed quite strongly.
According to the survey of Ministry of Public Health, the number of private
consulting-rooms increased from 942 in 1994 to 30,000 in 2002; by the
middle of 2005 Vietnam had 42 private hospitals with about 3,500 sick-
beds (takes account for 3 percent of the total sick-beds of the whole
country) which mainly located in large cities. The annual turns of people
come to private health service centres to examine and treat medically in
Hanoi are estimated to take account for about 50 percent and that in Ho Chi
Minh city is 40 percent. Moreover, there are ten thousands of private
pharmaceutical centres nationwide that sets up a widespread network of
medicine business.
The development of public health service system makes good
conditions for the sick to access health services. Owning to that diseases
are early discovered, first or emergency aid is timely and the number of
medically examined and treated people is greater that decreases the
overload of the state-onwed health services. Moreover, this development
also has strong effect on the state-onwed health service centres because it
creates a fair competition that push these centres to actively change in
quality of service to ensure their leadership. The widespread network of
medicine business allows to supply medicine for patients faster. Besides,
the drug market is more various including domestic medicine and foreign
one, essential and common medicine, specility and specific medicine that
meets the demand and taste of customers better.
IV.I.3. Culture
Entering the period of renovation, especially after the Prime
Minister’s issuance of Resolution No. 90/CP (1997), culture socialization
was considered an important solution contributing to build up the Vietnam
advanced and strong national character culture that meets the demand of
cultural enjoying of the people well. Reviewing the past 10 years of
implementing the Resolution, culture socialization is initially implemented
broadly. Culture and Information branch in cooperation with many
industries, collectivities and social organizations has mobilized
participation of a lot of social forces and created significant forces for

31
cuture development. These key achievements of culture socialization are as
below:
- Firstly, developing local cuture and information activities. In the
process of implemeting the guideline of culture socialization, many
effective models of local cuture and information appeared and developed
such as the following:
+ Family culture model: building culture families, culture family
clubs, garden-house culture family areas, collecting private antiques,
building private libraries, ect.
+ Community culture model: building culture villages, hamlets,
wards, communes and offices.
+ Collectivity culture model: folk festivals, public letters and arts
teams, letters and arts clubs, etc.
+ Other local culture models: house of culture, communal house of
culture; club-house, commune post office – culture place, etc.
The result of all is that the people-united movement building up
culture developed widely, contributed partly to enhance self-awareness,
completed identification of cuture for each people. The amount and
proportion of subjects which reach the cutural standards increase more and
more (Table 3).
Table 3: Proportion of subjects reaching the cutural standards
(up to May, 2005)

Subjects Number of subjects Total Proportion

reaching cultural (%)
standard
1. Households 12,091,222 17,978,782 67.25
2. Villages, hamlets 31,494 88,477 36.60
3. Wards 6,002 17,047 35.21
4. Communes 392 10,752 3.65
5. Offices, units 29,492 35,582 90.5
Source: Ministry of Culture and Information (2005), Draft of Plan on
developing culture socialization by 2010
- Secondly, developing specialized culture activities. Up to now, the
outstanding achievement of socializing some specialied culture activities is
the widespread participation of economic sectors in almost cutural fields,
via different forms such as join-venture, association, private-owned
enterprises (limited company, join stock company, private enterprise),
contributing money to equitized company and other private entities. The
specific result is in Table 4.

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 Table 4: The results of socializing some specific culture actions

Fields Results
1. Publishing, - Publishhing: in the total number of published books,
printing, excepting textbook invested by the government, all are
releasing published and released by a significant contribution of
other economic sectors.
- Printing: there are nearly 10,000 silk-screen printing
shops and households doing photocopy, computer, binding
and trimming services; about 600 industrial printing shops;
12 equitized printing shops in our country.
- Releasing: There are 19 state-owned companies which
have been equitized; 12,500 book shops and book hiring
shops among of them there are 35 privately owned
enterprises.

2. Film The number of films and the amount of money pours into
industry producing films by private sector are getting higher and
higher. There are years that 60 video films and 3-4 feature
films are produced
3. Library Socialization is implemented mainly via associating or co-
operating with agencies, industries, inner and outer
organizations and contribution of the people that aims at
mobilizing resources to organize library activities and build
local library model.
4. Art There are about 1000 troupes and private groups including
performance dance and song, stage, circus, water puppetry…; and 150
private theatres in our country.
5. Fine arts There are 150 fine arts galleries over the country.
6. Training Our country has 15 cuture and art training schools
operating based on state budget and school fees of students.
7. Cultural In the period of 1999-2003, the whole country mobilized
heritage about 460 billion VND not including state budget to
preserve relics and monuments.
8. Copyright There are 32 copyright consulting and servicing
organizations in the country (most of them are private
ones). A range of copyright protection centres were
established such as Vietnam music copyright protection
centre, Vietnam record industry association, Vietnam
literature copyright protection centre,….

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9. Producing There are 20 non-public centres of producing tapes and
and bussiness records, 25,020 places of renting tapes, records, karaoke,
of culture dance halls… in which there are 2,102 karaoke places,
services dance halls and 4,000 internet coffee shops.
10. - At the central level: the art block can pay 23.87% of
Expenditure expenditure by themselves; this number of the culture
self-control block is 10.21%, of the training block is 12.55%, of the
of public museum block is 4.42% and of the information block is
non- 16.89%.
productive - At the local level: Block of house of culture self-manages
units 5.64% of expenditure and that of public library block is
4.21%, of public relic and monument preservation block is
4.42%.
Source: Ministry of Culture and Information (2005), Draft of Plan on
developing culture socialization by 2010
These above achievements have contributed to diversify culture
products and acitivities, meet the higher and higher demand of the people,
improve the local cutural life. Thanks to socialization of cultural activities,
people in remote and disadvantage regions can also enjoy plenty of cutural
activities that gives hands to abolish cutural "blind spots", refresh and
create the new cultural colour in the society.
IV.1.4. Sports
Initially, sports were not mentioned in the Resolution No. 90/CP.
However, Sports and Physical Training Committee submited to the
Government the "Sport socialization" project on September 29th, 1998 and
steered overall sport branch to implement this project. In addition, the
Decree No. 73/1999/ND-CP and the Resolution No. 05/2005/NQ-CP also
have regulations on encouraging and enhancing the socialization of sport as
same as three other sectors mentioned above (education and training, health
care and cuture). The main targets of sport socialization are: organizing
sport activities and encouraging people to take part in these activities
directly aiming at improving the public's health, developing human
resource, satisfying demand of enjoying sport value and making sport
really become activities of people and for people; trying to build an
exercise-practised society. Over 7 years of socialization implementing,
sport branch has gained the following key achievements:
- Firstly, enhancing participation of economic sectors and
mobilizing their resources for developing sport. In terms of public sports,
the number of local sport clubs is increasing rapidly. These clubs with
various scales and forms of organization are established and managed by

34
different objects (organizations, collectivities and individuals). The number
of public sport events sponsored by organizations, collectivities and
individuals is also rising significantly that partly raising the number of
frequently doing exercise people (from 12 percent of population in 2000 to
17.4 percent of that in 2004).
For high-achievement sport, the participation of economic sectors is
expressed as the following trends:
+ The establishment of private sport centres and sport enterprises.
These centres are well-invested by the individuals and enterprises and able
to organize national and international sport events. Some of them have
taken part in directly training athletes such as Hoang Anh Gia Lai Football
Club, Dong Tam Long An Brick Football Club, Thanh Long Club (Ho Chi
Minh city); VST company (Nghe An province); Bao Long sport centre (Ha
Tay province); etc…Besides, economic organizations and individuals open
amateur junior sport schools and sport aptitude schools (single and multiple
subjects) that is also a new increasing trend.
+ The establishment of sport centres of army units and big state-
owned enterprises (General Corporations 90, 91). The typical ones of them
are sport centres of some Military Zones of Ministry of National Defense,
sport centres of region I and II of Ministry of Public security, and the ones
of Bai Bang Paper company (Phu Tho province) and Coal branch (Quang
Ninh province), etc… These centres are all in large scale and have ability
to organize top sporting events and train national and branch athletes.
+ The participation of the media agencies in organizing national
sport championship and international sport cups of each subject. From
2000 up to now, there are tens of the media agencies become hosts of
sporting cups each year, for instance, Hanoi Moi newspaper athletic Cup,
Nhan dan newspaper Table tennis Cup, Ho Chi Minh city Television
Bycicle Cup, International Women Volleyball Cup of VTV, Nhi Dong and
Thieu Nien Tien Phong newspaper mini-football Cup, etc…Taking the
advantages of propagandized means, the media has attracted a wide
attention of the public to those sport cups as well as easily mobilized
resources for organization and prizes that makes contribution to improve
the quality of sport events.
+ The greater financing for sport events of international sport
organizations and enterprises. For instance, football cups (national
championship cup, national cup, national super cup, U21, U18, U16 cups,
teenager and children cup,…) have attracted great financing of
international sport organizations (FIFA, AFC, AFF…), sport marketing
companies (Strata, VFD, AML,…), sporting instrument producing firms
(Nike, Adidas, Grandsport,…) and other enterprises such as Pepsi, Coca

35
cola, Kodak, Kinh Do, Euro Window, Agribank, etc… The total of sponsor
expenditure each year is up to tens of billion VND. Vietnam Football
Federation alone has mobilized over 100 billion VND to sponsor its
operation in the period of 2001-2005.
- Secondly, reforming operation model of public sport centres.
There are 4,244 public sport centres all over the country (including private
single and multiple subject sport centres, sporting culture and information
centres, sport traning schools and sport clubs) of which 11 centres are
under the central management and the rest are managed by the localities. In
the socialization trend, these centres have changes in awareness,
management and operation manner towards diversifying forms of operation
in order to exploit effectively material facilities. For example, some centres
actively cooperate with enterprises and individuals to invest to exploit
sporting works. However, in general, the transtition of public centres to
model of productive enterprises or equitized and privatized ones is still
slow.
- Thirdly, strengthening the operation of social sport organizations.
Beside Vietnam Olymlic Committee, a social organization represents
Vietnam Sport in the international Olympic movement, Vietnam now has
20 national sport federations and associations which are social
organizations of sport with self-controlled operation under the state
administration of Sports and Physical Training Committee. During the past
years, functions, tasks and organization mechanism of these federations and
associations have been getting more and more perfect. Some of them have
partly expenditure self-controlled and been able to manage all activities
such as Federation of Foolball, Volleyball, Tennis, etc…
The general impacts of these above achievements are all positive in
many fields, particularly mentioned as the following:
(1) Widening and diversifying public systems of sport competition
from the local level to the national level, enhancing movements of widely
practising and competing sport in the people.
(2) Contributing to improve the quality of competition and the sport
achievements; discovering sport talents and investing to develop new and
prospective sport subjects in order to access international standards.
(3) Step by step taking part in training junior sport talents effectively
on the basic of scientific and technological research and application.
(4) Creating more jobs for ten thousands of people, contributing to
reduce unemployment rate.

IV.2. The problems and causes

36
 In spite of the above achivements, the implementation of public
service socialization in Vietnam during the past years has raised many
problems which are as below:
Firstly, the process of socializing in all sectors is too slow in
comparision with the potential and oriented-target of the Resolution No.
90/CP that showed in the following aspects:
+ Arranging and reforming management mechanism of public
enterprises (non-productive and state-owned enterprises) in every sector
towards the socialized trend is slow and runs into many difficulties. The
level as well as the rate of investing to develop systems of enterprises
providing public services is still low compared with the demand.
+ Non- state budget capital mobilized to develop public services is
quite limited. System of non-public enterprises, thus, develops weakly and
unvariedly with small number and scale that does not meet the demand of
public services of the people.
Secondly, disordered and spontaneous operations, unfair competition
and low quality of services, … which occur in non-public sector are urgent
matters. This situation happens in the wake of the fact that private sector is
allowed to supply public services. For the benefit purpose, private
enterprises always tend to push up the service prices along with
unmethodical definition of service price, cost and fee and untransparent
financing mechanism that has negative influence on people’s enjoying
services. The establishment of non-public enterprises is spontaneous, has
lack of careful investigation and survey, lack of conditions to ensure the
quality of services. Due to that some enterprises cannot remain the initial
scale, evenly dissolved. Unfair competition and business such as supplying
fake goods or out-of-date goods (medicine branch), buying and selling
certificates and marks (education and training branch), prevaded culture
product business (culture branch), bribing the referees, buying off and
betting in sport competition (sport branch),…occur popularly.
Thirdly, the level of public service socialization is not equal among
regions, areas and specific sectors even among localities of the same socio-
economic conditions. Normally, in localities with advantaged socio-
economic conditions such as big cities and economic centres the
socialization develops strongly but slowly in the moutain areas and remote
and disadvantaged ones. Even in the same socio-economic condition
localities, the level of socialization is different due to the different
efficiency of management and implementation. Besides, the inequality also
happens in specific activities of each field. Indeed, the socialization of
easily gaining profit activities is strong and vice versa, the socialization of
activities under the non-profit mechanism is less developed.

37
 Fourthly, the fact of public service socialization in our country
appears in many fields, beside the four sectors above there are others such
as: public transport, science and technology, environment cause
(environment sanitation, drainage,…); society cause (caring the old and the
lonely people, the disabled, children, rehabilitation centres,…) etc, …
During the past years, the socialization of these fields has gained some
achievements and tended to widen. However, they reveal many limits.
Meanwhile, the guidelines and policies of the Party and Government have
not covered these fields that creates “legal gap” and inequality of
socialization among different sections.
There are many reasons for these mentioned existences, of which the
main ones are as the following:
- Firstly, the socialization awareness of branches, levels and people
is limited. In fact, they have not recognized properly the indispensable
character and long term benefit of socialization as well as the role of
economic sectors and the whole society in participating to supply public
services, and remained preconception about non-public sectors. Moreover,
the socialization awareness of the society is ununited. There’s a number of
people think that socialization means privatization while some people
consider it temporary measures to mobilize more financial and material
facilities contribution of the society in condition of scanty state budget.
Evenly, some others think that socialization is only implemented in non-
public organs of supplying public services and the public ones are not the
cases at all. In addition, there are different opinions about things related to
ownership relation, scope, level, scale and type of socialization organs as
well as capital, management, profit and non-profit, economic benefit of
individuals taking part in socializing, etc. Thought and habits for subsidy
are still popular in the leaders of all branches and levels.
- Secondly, during the process of implementing socialization,
branches have no master plans on developing socialization to guide and
define specific and suitable steps for each region and sector as well as pose
strategic view on reforming public organs of supplying public services and
developing non-public ones,... In fact, though the guideline of socialization
has been implemented since 1997, by the year 2005, after the
Government’s issuance of Resolution No. 05/20085/NQ-CP, some
branches have issued branch's plans on developing socialization. This
slowness is an important reason leading to sponteneous and unequal
socialization and some other problems rising from steering, controlling and
managing the implementation of socialization of branches and levels.
- Thirdly, the legal environment for socializing and managing
activities of supplying public services of non-public sectors is limited. For

38
example, some socialization policies have not provided clearly ownership
of non-public organs either distinguished the differences between profit and
non-profit activities of units supplying public services. Guiding and
propagating the legal document system of ministries, branches and
localities are too slow. In addition, standard norms of semi-public, people
founded and private models as well as regulations on organization and
working of non-public organs are slowly and uncomprehensively issued.
There's overlap between guides to implement the Investment Law and
specialized laws. Regulations on competence of issuing investment licences
and responsibility for specialized management are not unique and unwell-
cooperated that leads to loose management and creates loopholes for
negative phenomena.
Besides, the enforcement of some policies related to socialization is
not high. Prior policies on tax, credit, land and housing, material facilities
and human resource for organs of socialization (under the Decree No
73/1999/ND-CP) have little efficiency due to the limited number of objects
receiving priority, low level of priority, bureaucracy procedures, slowness
of implementing guides,… Moreover, some particular policies seem to be
inadequate in condition of the fact that many general policies have
changed.
- Fourthly, supervising, inspecting and treating misbehaviours in
supplying public services of non-public organs are not strict. Supervision
and inspection are not frequent; financial and specialized supervision and
inspection are not serious; there is misunderstanding between functions of
inspection of regulation and policy and specialized one. Moreover, the
supervision and inspection mainly focus on supplying public services of
non-public enterprises but not on managing and inspecting these organs of
the state management bodies. The cooperation between inspect agencies
and other bodies such as public security agencies, market management
agencies is weak that has effect on the quality of inspecting. Besides,
misbehaviours of non-public sector is unstrictly and wrongly treated, over
competence, undecisive,…that all lead to defy the laws and long lasting
lawsuits.

IV. 3. Solutions aiming at strengthening socialization in supplying

public services in the next time.
IV.3.1. General solutions
On April 18th, 2005, the Government issued the Resolution No.
05/2005/ND-CP on strengthening socialization of education, health care,
culture and sport that is timely and expected to create a basic change in
implementing socialization of supplying public services in our country. The

39
Resolution has expressed more clearly some problems related to opinion
and common direction of socialization as well as proposed direction for
socialization development in the four above sectors, of which worth
attention is oriented targets by 2010 (Table 5).
Table 5. Oriented targets of socialization in education and training,
health care, culture and sport sectors by 2010

Sectors Oriented targets by 2010

1. Education - Changing operation mechanism of the most public training
and training and vocational centres and a part of education centres
without responsibility of universalizing education into
service supplying mechanism. Changing all semi-public
schools into people founded or private ones.
- The percentage of pupils of non-public nursery is 80
percent, and that of kindergarten is 70 percent, of secondary
school is 40 percent, of vocational school is 30 percent, of
vocational training centre is 60 percent and of university and
college is about 40 percent.
2. Health - Implementing health insurance for the whole people.
care - Changing operation mechanism of the most public
hospitals into service supplying mechanism; completing the
process of changing semi-public health care services into
people founded or private ones.
- All cities and provinces which are in good condition of
developing economy have non-public hospitals.
3. Culture Changing operation mechanism of all present public culture
organs belonging to the culture branch into service
supplying mechanism.
4. Sports - Completing the process of changing operation mechanism
of public sport centres into service supplying mechanism;
changing a number of public centres with enough conditions
into non-public ones. The number of non-public sport
centres takes account for about 80-85 percent of the total
sport centres in the whole country.
- Building up associations and federations at national level
with all sports subjects; 80 percent of sports subjects have
associations and federations at provincial level. Vietnam has
national reprsentatives in almost sport organizations in
regions, continents and the world.

40
 Source: The Resolution No.05/2005/NQ-CP on April 18th, 2005 of the
Government.

This Resolution also highlights some great solutions including:

(1) Strengthening to propagandise, undertake research on theory,
improve awareness of socialization, especially elucidating unclear and
ununited problems related to socialization mechanism.
(2) Continuing to reform policy and management mechanism,
especially completing regulations on models and working regulation of
non-public organs; changing operation mechanism of public organs into
public service supplying mechanism; reforming state budget using
mechanism in public service sector; reforming prior policies on tax, credit,
land and housing, human resource; and reforming state management
mechanism.
(3) Building up socialization development plan (this solution has
been implemented by almost branches).
These above solutions and policies are presented clearly in the
Resolution and will be complemented with some more detailed contents
related to enhancing socialization development as the following:
- Firstly, enhancing to develop non-public organs of public service
supplying towards the trend:
+ Widening the sectors of socialization: beside the four sectors
mentioned above, it is necessary to encourage non-public organs in various
sectors such as science and technology, environment cause, social cause,
etc.
+ Non-public organs are encouraged to develop towards two types
that are people founded and private organs; enhancing public and semi-
public change into people founded or private ones or enterprises.
+ Implementing tax priority for non-public organs with non-profit
operation. Normally, the income tax for these organs is about 10 percent.
- Thirdly, in terms of capital mobilizing policy, non-public organs
need prior state credit. They are allowed to mobilize capital of the
employees. Localities may support a part of or the whole borrow interest of
the non-public organs in their capacity. These organs are encouraged to
reuse the interest gaining from their operation to strengthen material
facilities. Moreover, it is essential to put the non-public organs of education
- training and health care sectors to the list of developing investment credit
loan for building up material facilities, buying equipments cartering for
specialized activities.
- Fourthly, in terms of land and housing policy, it is necessary to
permit the People's Committee of provinces and cities belonged directly to

41
Central level to use their present housing fund and infrastructure facilities
to build up houses and infrastructure,… for non-public organs to hire in
long run with prior prices; create good conditions for these organs to invest
to build schools, hospitals, entertainment and sports areas along with
master plans. The State protects the right of using legal land, housing and
property ownership as well as creates conditions for these activities
developing favourably.
IV.3.2. Solutions for separate sectors:
Beside implementing common solutions mentioned above,
implementing socialization in specific sectors needs particular solutions.
The key solutions for specific sectors are as below:
(1) Education and training:
- Raising the state budget for education and training development;
focusing on investing for main point, key and strategic directions avoiding
to spreading far and wide; giving adequate priority for disadvantegous
position objects in the society as well as remote and disadvantaged areas.
- Implementing the policy of tendering for supplying education
services ordered by the State with the equal participation of every
economic sectors.
- Ensuring the equality between public and non public education
centres in the state administration activities as well as certification, teacher
appellation acknowledging and prior policies for pupils and students, etc.
(2) Health care (protecting, caring for and improving public's health)
- Increasing the state budget for health care activities in which giving
prior investment for system of preventive health care especially in
mountains, remote and disadvantaged regions; children's hospitals,
children's departments, general hospitals at district level and specialized
departments which are difficult to attract investment.
- Strengthenning to tranfer non-specialized works in public health
care services such as eat and drink, hygiene, wash and iron, guards,… to
non-public ones aiming at focusing resources on improving health care
technic services.
- Encouraging to change public and semi-public health care services
to non-public ones and establishing new non-public health care services in
accordance with the branch's plan, well ensuring conditions of equipments,
material means, human resource, health care technical standards, etc… for
these services.
- Abolishing monopoly in importing, exporting and supplying
medicine and health care equipments.
- Developing health insurance towards the trend that: strengthenning
and widening compulsory health insurance; strongly developing public

42
health insurance and encouraging types of spontaneous one. Expanding
types of medical examination and treatment health care services using
health insurance, step by step implementing the guideline that people
buying health insurance have a right to choose a suitable medical
examination and treatment clinic for themselves.
- Ensuring the equality between non-public health care services and
public ones in the state administration, competition, commendation and
reward, physician appellation acknowledging; implementing the support of
public health services in training and educating professional skills and
transferring health care technique for the non-public ones.
- Reforming policy of hospital fees on the basis of exactly and fully
counting direct costs spending for the patient.
(3) Culture
- Increasing the state budget for culture, in which paying more
attention and priority for remote and disadvantaged areas, frontier areas,
islands as well as preserving, embellishing and developing material and
immaterial cutural heritages.
- Arranging non-productive agencies and state-owned enterprises in
culture and information branch in defined plan and roadmap; the
determination of all levels and leaders have the decisive meaning to the
success of arrangement.
- Implementing the policy of tendering for supplying culture services
placed an order by the Government with the equal participation of every
economic sectors.
- Encouraging non-public organs and individuals to invest and
participate in both local cuture and information activities and specialized
culture activities.
- Ensuring the equality between non-public cuture and information
organs and public ones in state management, competition, commendation
and reward, artist appellation acknowledging, etc...
- Strengthenning inspection, supervision and strict treatment of
misbehaviours in cultural activities.
(4) Sports
- Increasing the state budget for developing sport in which giving
prior investment for high result sports, building some national and regional
sport centres; discovering and developing sport talents and supporting
public sport.
- Checking and classifying public sport centres to choose and change
into productive cause units or equitised units or non-public ones.

43
 - Encouraging to develop non-public sport centres such as single or
multiple subject sport clubs, sport and entertainment areas, sport centres,
medicine sport centres, sport service enterprises, etc…
- Strengthenning organization apparatus, defining functions and
responsibilities of sport associations and federations to form a completed
network of social organizations of sport from the centre to the localities.
- Step by step establishing and developing sport service market,
creating favourable conditions for diversifying the types of sport services,
developing network of sport tool and equipment producing enterprises,
transferring athletes and coaches, sponsoring and advertizing in the sport
sector, preparing to establish legal sport lottery and bet markets.
Recently, The Interior Ministry in cooperation with many central
bodies quickly implements the mission entrusted by the government that is
compiling a new decree on public services. Hope that the decree will
provide an adequate guidance to effectively strengthen VietNam public
service socialization.

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