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country being chronically short of food, Vietnam has become the third then the second largest rice exporter in the world.
3.2.10. With regard to the foreign investment: in accordance to the thinking of an “open economy,” the Law on Foreign Investment on December 29th 1987 officially permitted the foreign capitalist investment in Vietnam. This has opened a door to various abundant sources of capital, technology, intelligence, and markets. This has also made a full stop to the discrimination towards the capitalist economy. Since then, the increased FDI has greatly contributed to the economic growth of Vietnam.
Table 7: Number of FDI Projects in Vietnam
1988 1989
Number of projects nationwide 37 68 The registered capital in total (mil. USD) 371.8 582.5 Source: GSO (1999)
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as it may potentially affect the very sources of legitimacy of the entire institutional system.
This is a political measure highly consistent with the existing legal and political frameworks, particularly in regard to core theoretical principles such as collective mastery, democratic centralism and socialist democracy. However, it is obviously insufficient, because their regulations are highly limited in terms of implementation mechanisms; given that, the modes of citizen involvement are mostly the exchange of notes, indirect participation through state agencies, and meetings of the People’s Council. Consensus, rather than pluralism and potential confrontation, is the guiding principle of political decision-making. Given, however, that the economic reforms are bringing social and economic plurality, the challenge for the party is to identify the right mechanisms to incorporate the new socio-economic actors into the consensus-building arrangements. In fact, the attempts of the party to combine market economy with political unity may only bring partially plausible initiatives such as the GDD, but will not bring real and thorough political renewal. Hence, the Vietnamese concept of grassroots democracy “is meant more as a ‘social value’ or methodology of governance than as a political system” (Wells-Dang, 2010: p.107). However, through this development process of democracy, Vietnam is consciously learning and applying “theories and practices from developed countries and management experience of Western law-based states where democracy has a centuries-old history, tradition and culture” (Wells-Dang, 2010: p.107).
CONCLUSION
Vietnam in the past had gone through a painful period under the French colonialism in the north and the American imperialism in the south. Therefore, the orthodox ideals of socialism – economic growth, social justice and equality, the provision of public welfare and job security – broadly attracted her citizens. Economic development has thus been oriented towards these ideals.
It is, nevertheless, in the postwar Vietnam that such long-standing orthodox thinking has been broken through, out-of-date paradigms of development have been renewed, new models and laws have been adopted, reform-oriented initiatives have been experimented, transitional policies have been shifted in the right direction, market institutions have been created, new skills and behaviors have been introduced, and better and greater achievements have been obtained. But the path to development is to be measured over the period of generations, and the goal of development is still far ahead. The newly-emerged market economy of a transitional country like Vietnam, with so many institutional deficiencies, still must cope with the great challenges of a combination of the need for change with the need for continuity and order. But seen through a critical lens, the conclusive idea is that these transitional challenges are creating opportunities for Vietnam to create a learning-by-doing trial for her betterment, and also to reconfirm her strong commitment to the continuous renovation.
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THE SAVING AND LOAN COOPERATIVES MODEL IN INDONESIA Ahmad Subagyo
STIE GICI Business School, Indonesia
ABSTRACT
Cooperatives have played a significant role especially for the poor people in the Micro, Small, and Medium sized Enterprises (MSMEs). Saving and Loan cooperatives in Indonesia have been in existence since the Dutch colonization in the 19th century to provide alternative financial services for the poor and needy people to help themselves. The purpose of this study is to (1) describe the current practices of saving and loan cooperatives in Indonesia (2) review the patterns and the common themes in the current practices to classify them into several business models; (3) make the list of the participants and stakeholders related to saving and loan cooperatives in Indonesia; (4) map the positioning of saving and loan cooperatives in the landscape of microfinance institutions in Indonesia. Seven business saving and loan cooperative models are highlighted in this study, namely – Credit Union, Quasi Credit Union, Quasi Bank, Joint Liability (Group Lending), Sharia-based Cooperative, Saving and Loan Unit, and Partnership. This study applied comprehensive methodology approaches including case studies (qualitative method) and surveys (quantitative method). All the seven featured cooperatives have developed some type of supervision and reporting procedures. In general, policy making is done through Annual Members Meeting (RAT) with a representation system, while operational decisions are made by operational staff in consultation with Management Board, and Supervisory Board. The study found that all the seven cooperatives promote transparency and accountability in their profit sharing policies.
Keywords: Credit Union, Quasi Credit Union, Quasi Bank, Joint Liability (Group Lending), Sharia-based Cooperative, Saving and Loan Unit, Partnership, Micro, Small and Medium Enterprises (MSMEs). Annual Members Meeting (RAT)
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THE SAVING AND LOAN COOPERATIVES MODEL IN INDONESIA