Officials and analysts see plenty of room for economic reform in Vietnam and call for speeding up the process to complete a transition to a market economy.
Minister of Planning and Investment Bui Quang Vinh told news website Saigon Times that only the most developed economies have little or no room for such reforms unlike Vietnam, which is at a "very low" point.
Though the country has for long hoped to attain market economy status, it has taken only a few small steps toward the goal, he said.
He called for fundamental reform of institutions managing the economy in 2014-15, which he hoped would let economic resources flow only to efficient businesses.
Foreign and domestic private firms complain about little policy support for them compared to the public sector, which typically gets help from the government when in financial trouble.
Debts owed by the state sector mounted to US$64.1 billion in 2012, nearly half the country's GDP.
Better institutions will encourage the private sector, especially the foreign sector that performs best in the economy, Vinh said.
The economy grew by 5.42 percent last year, an improvement from the 13-year low of 5.03 the previous year. However the growth was low compared to the average rate of 6.5 percent in 2007-11 and 7.8 percent in 2001-06.
No reforms mean more difficulties and no strong growth, Vinh warned.
Analysts concurred with him.
Tran Dinh Thien, head of the Institute of Economics, pointed out that energy and land prices, interest rates, exchange rates, and labor payments are still regulated to some extent by the government rather than decided by the market.
He said economic reforms cannot happen and the country would continue to "pay the price" until the government stops regulating them.
Competition would persuade state-run firms like the Electricity of Vietnam, which has a monopoly on power distribution, to focus on their operations rather than invest in non-core businesses, he said.
Government inspectors estimated its investment in other businesses at $5.7 billion, or 150 percent its chartered capital, as of 2011. The investments brought the firm nothing but losses.
Investment in non-core areas was partly responsible for the state sector's indifferent performance and huge debts.
Nguyen Dinh Cung, head of the Central Institute for Economic Management, called for changes to policies and the government's management, including simplification of paper work for businesses.
A study by his institute found that reducing the time taken to complete customs procedures by 15 days would add $27 billion to GDP annually. Normally it takes firms 21-22 days to complete the process.
He also suggested more government support for sectors performing well and an end to assistance for troubled state-run businesses.
Executives of state firms running up big debts or making losses should be sacked, he added.
Like us on Facebook and scroll down to share your comment