Vietnamlawmagazine

Associate Prof. Dr. Nguyen Minh Doan

Law University of Hanoi

The regime of ownership, particularly over land and means of production, is of paramount importance to every nation. The ownership regime is a basis for the establishment of ownership relations. Therefore, it is related to the trend of national development (capitalism or socialism) as well as to effectiveness in management and use of national assets. It is an issue which cannot be ignored by politicians, economists and lawyers at the current stage.

Ownership through periods of development

The regime of ownership, especially over land and other important means of production, has always been dealt with in the Constitutions of 1946, 1959, 1980 and 1992. However, as dictated by the country’s historical situation and circumstances in each historical period, Vietnam’s constitutions and law have prescribed differently the subjects, scope and contents of the regime of ownership as well as mechanisms for exercising and protecting ownership. The country’s constitutional history shows that constitutional revision is required whenever the regime of ownership changes.

The 1946 Constitution

As Vietnam is an agricultural country with a fairly large proportion of its population living on land, land ownership is of extreme importance. Under the feudal and colonial regimes, land was concentrated in the hands of feudal landlords while peasants had to hire themselves to the landlords, leading an extremely miserable life. After the victorious August 1945 Revolution, the young Vietnamese State promulgated the 1946 Constitution to define and protect the civic rights of citizens of the Democratic Republic of Vietnam, most importantly ownership and other property rights in order to realize the motto “ Land belongs to the tillers.” As ownership gives rise to other economic and civil rights such as the right to business, the right to participate in transactions, the right to inheritance, etc., the State permitted free trading and transfer of land, creating conditions for land owners to effectively exploit and use their land.

The 1946 Constitution stated in Article 12: “The private property ownership of Vietnamese citizens is guaranteed.” Such constitutional provision embodied genuine democracy and human rights, which stemmed from the practical situation and requirements of the revolution then, that is “to maintain the territorial integrity, gain complete independence and rebuild the country on the democratic foundation.”[1]

The 1959 Constitution

Following the Dien Bien Phu victory, northern Vietnam was liberated and the northerners started building a firm rear to provide human and material supports for southern compatriots in the continued national and democratic revolution in southern Vietnam. In order to create legal bases for entities of different economic sectors to feel at ease in production, the State recognized and protected the ownership rights of individual laborers as well as of capitalists over the means of production which they were allowed to use in production and business.

The 1959 Constitution affirmed in Article 11: “During the transitional period in the Democratic Republic of Vietnam, major forms of ownership of the means of production at present are state ownership, namely all-people ownership; cooperative ownership, namely collective ownership by laboring people; individual laborers’ ownership; and national capitalists’ ownership.”

When the Vietnamese revolution moved to a new stage of socialist construction in the North and struggle for liberation of the South and then national reunification, the Democratic Republic of Vietnam State developed and transformed the national economy in the socialist direction. Hence, the 1959 Constitution prescribed in Article 12: “Mines, rivers, forests, barren land and other natural resources, which belong to the State as prescribed by law, all come under all-people ownership.”

Peasants, handicraft workers and other laborers were encouraged and created conditions by the State to form cooperatives through contributing their private land and means of production to building and developing the collective economy on the basis of collective ownership. For capitalists, the State introduced the model of joint state and private undertaking, assisting them in economic development along the socialist path. Though social prejudice against private businesspeople prevailed in that period, their ownership over their means of production and assets, was still protected by law. The 1959 Constitution clearly stated in Articles 14, 15, 16, 18 and 19 that the Vietnamese State shall, in pursuance to law, protect the ownership over land, other means of production, property and lawful incomes, and the right to inherit private property of peasants, handicraft workers, individual laborers, national capitalists, citizens, etc.

The 1959 Constitution stipulated that the regime of ownership, economic sectors and economic management principles are economic policies of a socialist state, which were, however, suitable to the war conditions. Public ownership of the means of production was established together with the socialist relations of production. Hence, the 1959 Constitution acknowledged the four major forms of ownership of the means of production, including all-people ownership, cooperative ownership, individual laborers’ ownership and national capitalists’ ownership. The State would only compulsorily purchase and requisition private property with proper compensations when necessary for common interests. During the anti-US resistance war, the Vietnamese economy developed under the state-subsidy mechanism, with the means of production and means of consumption distributed under plans, so civil transactions did not develop and, therefore, individuals were entitled to own the means of consumption to meet their daily-life needs.

The 1980 Constitution

After the country was reunified, the State enacted a new constitution in 1980, which clearly stated in Article 19: “ Land, forests and mountains, rivers and lakes, mines, natural resources lying underground, in sea areas or the continental shelf; state-owned industrial, agricultural, forestry, fishery or commercial enterprises, banks and insurance organizations; public-utility works; systems of railways, roads, river ways, sea routes and airways; dikes and important irrigation works, defense facilities; information and communication, radio, television and cinematographic systems; scientific and technical research institutions and cultural and social establishments as well as other assets which belong to the State as prescribed by law, all come under all-people ownership.”

Private ownership, which was recognized by the 1959 Constitution as citizens’ basic right, was no longer acknowledged in the 1980 Constitution, which only stipulated in Article 27: “The State protects citizens’ rights to ownership of lawful incomes, savings, houses, means of daily-life activities, and instruments of production used in permitted cases of individual labor. The law protects citizens’ right to property inheritance.”

Because of the then improper perceptions of the period of transition, the State declined to acknowledge the existence of private ownership and corresponding economic sectors, considering them non-socialist sectors, and sought ways to get rid of them. The collective mastery and state subsidy ideas underlined almost all provisions of the 1980 Constitution which mentioned numerous rights of citizens, of which only some were exercised by certain people in reality. For instance, the right to possess homes was effected only for citizens being state officials and employees, even though not all.

Under the Constitution, individuals and households were not entitled to own land, but could use and exploit land and transfer assets on land. If there was no asset on land, they were not entitled to transfer the land use rights, including bequeathing them. If a person with allocated land died, the land use rights would be transferred to another who is personally using such land together with the deceased for continued use. In this period, land was allocated by the State to cooperatives or production groups, but not to individuals or households. Therefore, civil transactions related to land were banned. Moreover, under the socialist transformation policy in southern Vietnam, individuals and households were gathered into production groups or cooperatives and assets owned by households were limited, mainly the means of consumption. Hence, civil transactions during this period largely aimed to meet basic needs of individuals and households.

The 1992 Constitution

As the 1980 Constitution was the Constitution of the period of socialist transformation in southern Vietnam and construction of the socialist foundation nationwide, it was no longer suitable to the cause of “doi moi” (renewal). For that reason, the State passed a new Constitution in 1992, a constitution of the period of renewal, with the policy of developing a socialist-oriented market economy. The new Constitution stated in Article 15: “The State consistently implements the policy of developing a socialist-oriented market economy. The multi-sector economic structure with diversified forms of production and business organization is based on the regime of concurrently all-people ownership, collective ownership and private ownership, in which all-people ownership and collective ownership constitute the foundation.”

In order to materialize the policy of making people rich and the country strong, better satisfying the people’s material and spiritual demands, the State has created conditions for all economic sectors, namely state economic sector, collective economic sector, private and sole proprietor economic sector, private capitalist economic sector, state capitalist economic sector and foreign-invested economic sector, to bring into full play their own potential for development in various forms. This is defined in Article 16 of the 1992 Constitution (revised in 2001): “Organizations and individuals of all economic sectors may carry out business and production activities in sectors and trades not banned by law and be jointly engaged in long-term development, cooperation on an equitable basis and fair competition according to law.”

Development of a socialist-oriented market economy requires recognition of citizens’ right to freedom of enterprise, serving as a legal ground for attracting them into economic activities and encouraging them to get rich lawfully on their land by their own capabilities and with the influences from the State and the society. The State creates opportunities for citizens to participate in economic activities, set up businesses without any limitations in scale and degree and establish production teams, cooperatives, factories or shops suitable to the conditions and capabilities of each person; and employ labor under contracts. Their ownership over their means of production, means of daily-life activities, capital and other assets in their businesses are protected by the State. And they may have access to bank loans for business purposes; have their inheritance rights protected; enter joint ventures or associations with domestic or foreign organizations; do business in sectors or trades not banned by law, etc.

The 1992 Constitution restores citizens’ ownership rights, which are, however, expressed in a new spirit, suitable to the economic policies and regulations on citizens’ right to freedom of enterprise. Under Article 58, “the citizen enjoys the right of ownership over his/her lawful incomes, savings, housing, chattel, means of production, capital and other assets in enterprises or other economic entities; with regard to land allocated by the State for use, the provisions of Articles 17 and 18 will apply. The State protects the citizen’s right of lawful ownership and the right of inheritance.” So, the scope of citizens’ ownership, particularly the ownership over the means of production which was not recognized by the 1980 Constitution, has been broadened.

Among individuals’ property rights, land use rights play the most important role as land constitutes a big property of a vast majority of peasant households. The State has allowed individuals and households to exploit, use, transfer, lease, exchange and inherit land use rights which are recognized by the State as a commodity of particularly important economic value. When they no longer need to use land, individuals or households are entitled to transfer, donate or bequeath it. Hence, they set their mind at peace to engage in productive labor on land plots allocated by the State, or they may transfer such land. In addition to land use rights, citizens’ rights to freedom of enterprise have also been recognized. Citizens are entitled to do business in various forms. So, besides the means of production, citizens’ contributions as capital in cash, gold, shares, bonds, etc., also come under their ownership. This gives rise to a broader view of laborers’ lawful incomes, which now include not only salaries or wages but also bonuses, revenues from bond and share trading, profits from transactions and economic contracts.

However, compared to the 1946 Constitution, the scope of citizens’ ownership at present is narrowed - the State only recognizes the right to separate ownership but not the right to private ownership. This is reasonable because even though the State recognizes the building of a market economy but along the socialist orientations, the state economy, based on all-people ownership, is still consolidated and developed, particularly in key sectors and fields, which plays the leading role and has become a solid foundation of the national economy.

Lawful assets under private ownership are not limited in quantity and value and protected by various measures, such as requesting courts, competent authorities or agencies to compel persons who infringe upon ownership to return the assets and pay damages. However, the possession, use and disposal of property under private ownership must neither harm nor affect the State’s interests, public interests, and legitimate rights and interests of other persons. Individuals may not own assets defined by law as not falling under private ownership, namely the objects under state ownership as defined in Article 17 of the 1992 Constitution.

Citizens’ rights to build, lease or sell houses at agreed prices are acknowledged in the Constitution and the interests of house lessees, lessors, purchasers and sellers are protected by law.

The State’s recent recognition of long-term existence of private ownership, private economic sector, private capitalist sector, citizens’ right to freedom of enterprise and the emergence of various forms of insurance and different types of markets have made important contributions to creating jobs and raising incomes for laborers and encouraged citizens to get rich lawfully.

Ownership regime: Trend of development

As ownership is an important issue, a yardstick for distinguishing socio-political regimes (especially between capitalism and socialism) and a motive force for increasing labor productivity as well as production and business efficiency, it cannot be ignored by the constitution and law.

Like other socialist countries, Vietnam spared no efforts in pursuing the regime of public ownership, especially public ownership of the means of production, even through coercion, with a view to quickly building socialism, eliminating the regime of exploitation of man by man and advancing to communism. Regrettably, the public ownership regime in socialist countries in general and Vietnam in particular failed to bring into play its effect in practical production, business and management activities as well as in the protection of socialist property because it had been carried out in a too massive manner, regardless of socio-economic effectiveness. Such situation prompted the Vietnamese State to launch the process of doi moi, including “doi moi kinh te” (economic renewal), changing the contents and modes of management and exploitation of the regime of public ownership.

Recent years have seen the trend of individualizing the regime of ownership in the form of “equitization”, with state property under all-people ownership gradually assigned to specific owners. Formerly, if assets owned by husband and wife were considered a common property of the couple, they are now placed under the common ownership of both spouses or separate ownership of wife or husband.

The regime of ownership remains unstable with many problems to be tackled. Vietnam has not yet created an optimum socio-economic mechanism to implement the public ownership regime in the interests of the State and people. This is manifested in the perplexed and ineffective management and use of state property under all-people ownership. This issue needs to be dealt with by economists and jurists so that the problem that “common ownership means nobody’s ownership” can be redressed and the ownership regime can boost and actively contribute to the achievement of the objectives of a prosperous people, a strong country and a democratic, equitable and civilized society.

What is important now is that lawmakers should determine the proportion of the state-run economy under all-people ownership to the national economy, its leading role as well as effective and practical measures to raise the effectiveness of the public ownership regime. This is extremely important for consolidating the people’s confidence in socialism in both theory and practice in Vietnam.

The constitution and law should also dwell on the respect for, and protection of, public property and interests (socialist property and state interests) as well as individuals’ and collectives’ assets and interests, without any discrimination. Pending the effective implementation of public ownership of the means of production and social property, we must accept and protect such reality on certain legal bases, creating conditions for all economic sectors to enjoy equality and compete with one another on a legal basis. Respect for and settlement of conflicts between public and private ownership as well as between public and private interests should be expressed more clearly in the constitution and law in Vietnam.

The process of socialization of the means of production should be carried out step by step, suitable to the development of productive forces as well as of the perceptions of “socialist people.” So, which forms of ownership should be maintained and which means of production should be placed under public ownership and to what extent must only be orientated by leaders and managers but finally decided by people. It is hoped that in the on-going process of democratization in all aspects of social life, important constitutional changes, especially, the issue of ownership, must stem from the reality of production, management and exploitation of property in the society, and be discussed and decided by people.-