New Year – Hopes from reforms

Amid uncertainties and unpredictability in the world, Vietnam has strived to improve its institutional regime to maintain stability and development. Being an enthusiatic supporter of such reforms, I pin high hopes on two policy breakthroughs: The National Master Zoning Plan and amendments to the Land Law.

High hopes of the National Master Zoning Plan 

The Government has prepared the National Master Zoning Plan for the 2021-2030 period with a vision to 2050 for submission to the National Assembly. According to the Minister of Planning and Investment, this is the first time the country has built the National Master Zoning Plan, focusing on arranging development spaces with a national vision in the long run. The people and the business community, with the private sector as the driving force in the market economy, will surely find it as good news. It is because with the National Master Zoning Plan, impediments such as the separation of institutional authority pertaining to boundaries; interests associated with short-term, local visions in competing for opportunities and resources; hiccups in policy making like blockages during the pandemic; or the (proposed) requirement on having a residential space of at least 20 square meters for anyone wanting to become citizens of Hanoi or HCMC, etc. will be removed or lessened.

It should be noted that in a market economy, the role of the State is characterized by two functions: legal enforcement and/or enabling development via policies. The State, upon traditional practices, has continued to emphasize the latter function. Apart from codifying policies contained in legal documents, the State has attached great importance to zoning as a vital management tool. Despite this perception, I am still a little surprised when learning from the Minister of Planning and Investment that in implementing the 2017 Law on Zoning, only 111 zoning plans – local and national – will be retained out of 3,654 zoning plans issued during the 2011-2020 period. This is indeed a policy breakthrough, quantitatively. It is because amendments and supplements have also been constantly made to the numerous zoning plans; the huge number of these zoning plans has on one hand been used as tools by local authorities to intervene in the economy, and on the other hand, such plans have been a huge burden for the society’s conformity, and hurdles preventing the flexible and free movements of the market.

I find it really satisfying to see the term “development spaces” provided for in the National Master Zoning Plan and other zoning plans. But what is the “development space”? What are implied by this term, what is the role of State governance, and what is the space of liberty for around 100 million people including some one million enterprises? I believe that over the past many years, many policymakers, the business community and specialists have been much preoccupied with this concept. It is because while previous zoning plans have largerly centered on macroeconomic goals, with rights and interests of stakeholders in focal projects having been established, then with the new concept and higher vision on development spaces, the goal of national development under a ten-year vision or farther can hardly be obtained if the factor of “governance” and “control” is excessively embedded. The reason is simple: development and sustainable development, by nature, can only come from liberty and creativity.

In so saying, I am hopeful that there will be “material” changes introduced in the new masterplan, not just the quantitative reduction. I recall asking an international specialist on zoning why the State in a market economy still has to make zoning plans. His explanations are simple: Spatial planning is based on land and territory. Just imagine if there is no control, rampant construction will spread and no land will be left. Therefore, it is important that the State regulates what area is for construction and what area is not, and the market will decide what works to be constructed.

Hopes from the amended Land Law

In general, in comparison with practices and conventions in other countries, Vietnam’s Land Law is seen to be carrying too heavy burdens for development. If development aims to increase the people’s wealth via the rights to accumulate assets, then prevailing regulations in the Land Law separating land entitlement and house ownership are impeding those rights. But if development aims to build a government that pursues harmony with the people’s happiness, then the complicated nature of the current land management mechanism has nurtured serious corruption in this field evidenced by increasing denunciations and accusations in the society.

By contemplating the core issue, I can see two paradoxes in the Land Law which are expected to be addressed in the amended law.

First, if there is no construction on the land, then under the Constitution’s term of “all-people’s ownership”, the land holder is merely the land user. However, once construction has been established on the land, then how will the ownership or the entitlement to such assets be established? The common sense is that the house owner must enjoy higher priority than the land owner, i.e. the State, otherwise the ownership right is just the quasi-property right. Stemming from the principle that “State interests” are supreme, the Land Law has been designed as an umbrella system encompassing both the “public law” (delegating the administrative power to the State to reclaim land) and the “private law” (giving the State as the land owner the right to decide the purpose and terms of land use), which also dictate the purpose and use terms of properties on the land. This core issue if not dissected and transparently addressed will make the amendment just a situational solution for ten-year cycles like before.

Second, given the recognition of the market economy and civil rights, and the availability of zoning authority to intervene in all development activities, a question arises over whether a provincial or even a district government should be given the authority to determine the land-use purpose for each specific area.

Based on regulations on land-use classification pertaining to the Land Law, and referring to the zoning plan as well as the demand of land-holders, local authorities will issue land use certificates detailing land use purposes. The rights and obligations of the land holder are associated with the land use purposes, including the term of land use and ground rent. A prominent issue arises over the right to properties, as the land holder can do whatever he or she wants with the properties on the land, as long as the established land use purpose is not infringed upon. That is to say the land holder when excercising his or her right to the properties on the land will have to obey to two primary obligations: one being the land use purpose stated in the certificate and the other the zoning plan.

From this labyrinth, bureacratic red tape takes shape under various form, which not only results in grievance and hurdles for the people and enterprises but also creates a fertile land for corruption, with numerous officials having been criminally sanctioned.

No matter what, I still strongly believe that making the National Master Zoning Plan and amending the Land Law are two major policy breakthroughs. If genuine reforms take place as expected, the National Master Zoning Plan will lead to rightful intervention by an enabling State for development, while the amended Land Law will help unleash resources and give peace of mind to the people who can feel rest-assured of their own achievements stemming from the Renovation Campaign.

(*) Partner of the law firm NHQuang and Associates, Arbitrator of the Vietnam International Arbitration Center