Photo of Uncle Ho with the business community in 1946 (sourced online).
Resolution 68 expresses a grand political ambition: developing the private economic sector into the primary engine of the national economy. Reforms such as streamlining personnel or merging provinces and cities are revolutionary steps—aimed at slimming down the apparatus and enhancing the operational efficiency of the public sector.
However, for the private sector to truly rise, the public sector must undergo even deeper reform. After all, one cannot rely on an outdated apparatus to nurture new engines of growth.
A lean state is necessary, but more importantly, it must be an elite state.
1. The Necessary Condition: Pay Civil Servants Salaries Comparable to the Private Sector
“Initially, the defendant thought that as long as the dossier was complete and the project was good, it would be approved. But reality shows that without ‘relationship expenses,’ no one signs, no one approves. …”
— (Nguyen Van Hau, Chairman of Phuc Son Group – according to Dau tu Newspaper, June 27, 2025, page 14).
The above testimony reflects a major paradox in our institution: a civil servant with an official salary of just over ten million VND per month can put pen to paper to sign documents that bring hundreds, or even thousands, of billions of VND in benefit to a business.
This is an asymmetry that neither the public nor the private sector can accept—rationally or morally. How can I let you get so rich while I am merely left “sipping broth” to survive?
So-called “bribes” from the private to the public sector are often regarded as “asset redistribution” or “transaction costs,” and this practice is frequently treated as “normal.” Why do citizens and businesses seem to compromise with such an abnormal reality?
There are two main reasons:
- First, salaries in the public sector are irrationally low compared to the ultra-dynamic private sector—thus, one cannot expect a “5-star” public service on a “1-star” salary.
- Second, everyone seemingly understands that no official is going to live in poverty when, with just a few procedures and a single signature, they can help a business owner become immensely wealthy, possessing hundreds of billions of VND.
The Phuc Son case is a classic example of that contradiction: “kickbacks” to leaders in exchange for investment projects seem to be viewed as “a normal thing.” But that is a very abnormal kind of “normal.”
Therefore, as long as civil servant salaries remain vastly disconnected from the private sector, the private sector will find it difficult to flourish—regardless of how much the legal framework changes.
Bringing public sector salaries closer to the private sector is a problem that must be resolved once and for all. In particular, for positions holding great power and influence, salaries must be even higher and attractive enough.
Salaries must be sufficient so that cadres no longer have the need or incentive to engage in “income redistribution” through informal channels.
Singapore is a prime example: the Prime Minister’s salary can reach up to $1.6 million per year—that is how a state makes a serious investment in the quality of governance, rather than cheapening civil servants and then expecting them to make wise decisions worth thousands of billions of VND.
I believe Vietnam can entirely design reasonable mechanisms so that instead of businesses paying “relationship expenses,” they will pay “official transaction fees”—contributing to transparent income growth for the public sector.
There are many official mechanisms we can consider to increase public sector income: allowing hospitals to collect medical fees based on demand; collecting management fees for important services; increasing processing fees for dossiers based on turnaround time; allowing police forces to retain a portion of administrative fines; or allowing businesses to pay true value for services received.
All of these mechanisms must be designed transparently, with limits, under control, and with clear, fair, and immediate income sharing within the system.
Thus, raising public sector salaries is not a favor—it is an institutional investment. The private sector is willing to pay that cost, as long as they receive transparency, professionalism, and fairness in policy execution in return.
2. The Sufficient Condition: If You Want a Strong Private Sector, the Public Sector Must Be Elite
Once the compensation mechanism has been changed, it is necessary to overhaul the quality of public sector personnel—we cannot simply use the old workforce while expecting double-digit growth.
If the old team could deliver double-digit growth, we would have grown long ago!
First, we cannot continue maintaining the current method of selecting civil servants. A completely new recruitment mechanism needs to be built: prioritizing genuine capability and setting minimum entry criteria regarding English proficiency, technology, artificial intelligence, and empathy toward citizens.
We should also boldly recruit domestic and international talent, including retired experts. We should not limit age or apply non-essential criteria to important positions, which creates a severe talent deficit where it is needed most.
In addition, a major current shortcoming is that many policymakers have never had real-world experience in the private sector. Consequently, many regulations become outdated, impractical, and detached from reality. It is hard to expect them to craft policies that promote the private sector if they themselves have never understood or empathized with the daily hardships businesses face.
If we truly want to reform institutions and support the private sector, I strongly propose a mandatory requirement: policy-making cadres should (in fact, must) have at least two years of practical work experience in the private sector. Only when directly facing market pressure and business hardships can they produce policies that truly touch reality.
Crafting policies in air-conditioned rooms will continue to lead to detachment from reality—something I believe those within the public apparatus do not desire either.
3. The Cultural Factor: The “Parent of the People” Mindset—An Invisible Obstacle to Be Eliminated
One of the largest cultural barriers preventing institutional reform is the “parent of the people” mindset—where cadres are still viewed (or view themselves) by the public as the parents of the people.
There cannot be an equal, transparent, and efficient business environment if businesses are always placed in a subordinate position, having to cower, flatter, or even beg just to conduct business.
President Ho Chi Minh once affirmed: “…government bodies from the national level down to the villages are all public servants of the people, meaning they exist to carry out common tasks for the people, not to sit on the people’s heads…”
Yet in reality, in many cases, cadres still behave like “parents” to businesses. Businesses still have to “ask,” “beg,” and if granted an audience as a “favor,” they attend; if not, they must endure it.
Furthermore, a jungle of documents, guidelines, and regulations containing many grey areas has created conditions for policy enforcers to impose subjective, voluntaristic viewpoints arbitrarily. This arbitrariness is precisely what suffocates the confidence, creativity, and growth of the private sector.
To change behavioral mindsets, paying adequate salaries to the public sector is a prerequisite. Once properly paid, cadres can no longer act in a “bestowing favors” manner, but must truly be “public servants”—serving the people and businesses.
Along with this, administrative culture urgently needs to change. Perhaps it is time for the Party and State to do away with cumbersome etiquette, lengthy “respectfully submitted” flattery, sycophantic slogans, and ridiculous “praising” articles and broadcasts. (Recently, declining congratulatory flowers for congresses and conferences was a major step forward). Only then can we shed a portion of the “parent of the people” mentality.
We need to build a humble, professional, and service-oriented public authority culture—where every cadre and Party member is truly imbued with the ethos of being “for the people” and for “businesspeople,” as Uncle Ho once wrote: “The Government, the people, and I will wholeheartedly assist the business community in this national construction. …A prosperous national economy means prosperous business operations for entrepreneurs…”
Nguyen Quoc Toan
(Written on the occasion of Vietnam Entrepreneurs’ Day. Thanks to journalist KL for the feedback).
P.S.: Photo of Uncle Ho with the business community in 1946 (sourced online). Can you see that back then, the proportion of women entrepreneurs was much higher than it is today?
