Recent Economic Developments in Vietnam

Asian-Pacific Economic Literature Vol. 6, No. 1, May 1992, pp. 16-40.

Recent Economic Developments in Vietnam

Vo Nhan Tri and Anne Booth

After following economic policies based on an essentially Stalinist-Maoist planning ideology for many years, the Communist Party of Vietnam (CPV) leadership finally decided at the Sixth Party Congress (December 1986) to initiate a major shift in its strategy of economic development. The economic strategy pursued by North Vietnam since 1954, and by the reunified country after 1975, was branded 'the bureaucratic centralized state subsidy system' and a reform process was set in motion whose main aim was to demolish it. This strategic shift, described as 'renovation' (Doi Moil was, however, intended to remain 'within the realm of [Marxist-Leninist1 socialism' (Nguyen Van Linh 1987). In this article we shall first of all review the evidence on the economic situation before 1986, and then discuss the literature on the implementation of the 'renovated' economic policy advocated by the CPV since its Sixth Congress. The emphasis will be on the literature in English and French, although some attention is also paid to official Vietnamese policy statements.

The economic situation before 1986

The development strategy that was pursued in North Vietnam after the division of the country in 1954 resulted in a 'classic Soviet type command economy, with strong

~

governmental control over all important, and many less important, economic decisions' (de Vylder 1990:3; see also Vo Nhan Tri 1990a: 108-9). The private sector was severely circumscribed in its operation although, in agriculture, some private plots were permitted. All productive inputs (including labour in the modern sector) were allocated by the state; many material inputs, and financial capital, were supplied at very low cost, and to state enterprises usually completely free of charge. Physical production targets were assigned and projects assessed purely on the basis of whether or not these targets were met. Most people could support their basic needs at low prices although supply constraints meant that rationing was widespread. However, free markets for consumption goods (particularly food) did exist, where prices were a multiple of those in the official markets.

As in most other Communist economies, 'modernization' was equated with large-scale, capital-intensive industrialization, with a large share of total investment resources devoted to heavy industry. Official slogans emphasized national self-sufficiency for most goods; exports were encouraged only as a means of acquiring raw materials such as cotton, petroleum, and fertilizers which could not be produced locally. Sixty per cent of trade was with other CMEA (Council of Mutual Economic Cooperation) countries. The pervasive system of subsidies to industrial

The authors are grateful to Jean-Michel Fourniau of INRETS in Paris, Adam McCarty of the Australian National University and to Per Ronnas, Stefan de Vylder and Orjan Sjoberg of the Stockholm School of Economics for valuable comments on a previous draft and for supplying extra material. Needless to say the authors take full responsibility for the contents of this survey.

16 ASIAN-PACIFIC ECONOMIC LITERATURE May 1992

RECENT ECONOMIC DEVELOPMENTS IN VIETNAM

enterprises led to large budget deficits; these generated considerable excess liquidity, and thus repressed inflation, in the economy. In short, most of the classic symptoms of a rigidly planned economy facing a ’soft- budget constraint‘, were present as analysed by Kornai (1986) and many others writing about Eastern Europe and the former USSR (de Vylder 1990:6-7).

After a precipitate and forced reunification in 1976, the CPV leadership set about imposing the northern model upon the south. This ’northernization’ of the south resulted in declining production in many sectors and an economic crisis for the whole country during the last years of the second five-year plan (1976-80). Official estimates of national income per capita indicated a decline from $101 in 1976 to $91 in 1980 (General Statistical Office 1981:18). Although at the time party officials blamed the poor economic performance on bad weather and the war with China, it has been acknowledged more recently that policy errors were the main cause of the decline in output (Vo Nhan Tri 1990a:108). Despite some partial reforms in the early 1980s, the country was again plunged into a more serious economic crisis at the end of the third five-year plan (1981-5), particularly after the ill-conceived monetary reform of September 1985.

The literature on these developments is now quite substantial. Useful English-language overviews, from varying ideological perspectives, are to be found in Vo Nhan Tri (1987,1988,1990a), Kimura (19891, Mio (1989), Beresford (1989), Duiker (1985), Fforde and de Vylder (19881, Spoor (19881, and various essays in Marr and White (19881, while important French contributions include Crosnier and Lhomel(1987), Lam Thanh Liem (1987), Le Van Cuong et al. (1988), and Ducos et al. (1991).

But it is perhaps most revealing to look at what senior party officials were saying about the pace and direction of economic policy- making in the mid-1980s. The general assessment of the Vietnamese economy at the

end of 1985, given in then Secretary-General Truong Chinh’s Political Report to the Sixth Party Congress, is particularly illuminating:

Our country is facing many socio-economic difficulties. Though there has been some growth in production, it is slow in comparison with the capabilities available and labour spent . . . Failure to fulfil a number of major targets . . . such as food staples, coal, cement, wood, textiles, and items for export has affected all aspects of economic activity and the working people’s life.

Production and investment efficiency has been low. In general, only half of the designed capacity of enterprises has been utilized with reduced labour productivity and low product quality.

been satisfactorily exploited and have indeed been wasted . . . the ecological environment is being destroyed. Clogged-up circulation [of goods] ... and skyrocketing prices are exerting a negative impact on production, the people’s life, and society.

Far from being reduced, the great disequilibria in the economy between supply and demand in grain, foodstuffs, consumer goods, energy, raw materials . . . between (budget) revenue and expenditure, and between imports and exports have, in some respects, become even more acute . . .

The life of the people, especially workers and civil servants, is beset with many difficulties. A great number of working people are unemployed or under- employed. Many material and cultural necessities of life of the people are not met. There is a shortage of common consumer goods and medicines in the rural areas. Housing, hygienic conditions, and cultural life in some areas are still poor . . .

The aforementioned state of affairs has lessened the confidence of the masses in the party’s leadership . . .

On the whole, we have not yet achieved the objective set by the Fifth Party Congress, namely stabilizing in the main the socioeconomic situation and the people’s life.’

Our country’s natural resources have not

1 Translation from the Vietnamese language report in Nhan Dan, (Hanoi), 16 December 1986. Vo Nhan Tri 1990a:68-9.

ASIAN-PACIFIC ECONOMIC LITERATURE May 1992 17

VO NHAN TRI AND ANNE BOOTH

During the years 1984-85, [Vietnam’s] economy headed downhill into recession, and was bled white.

Agricultural production decreased to the point where production of food

staples was insufficient.

The current Premier Vo Van fiet, in a more recent speech, recalled the economic situation by the end of 1985 in the following terms:

During the years 1984-85, [Vietnam’s] economy headed downhill into recession, and was bled white. Agricultural production decreased to the point where production of food staples was insufficient. The situation regarding consumer goods was strained. Exports slumped. [Foreign] aid and import surpluses increased but were inefficiently used. Life became difficult . . . the trouble was manifested by hindered circulation, soaring inflation, declining finances . . . The state could not bring into play its management authority [and] remained passive in coping with every-day economic operations . . . People lost their confidence in the socio-economic future of the country2. Such was Vietnam‘s socioeconomic

situation, according to senior officials, in late 1985. It was against this background that the CPV’s Politburo decided to convene an important meeting in August 1986 to overhaul the entire strategy of economic development pursued since 1976, and to make a strategic shift in its overall economic policy under the banner of ‘renovation’. This apparently dramatic reversal of policy coming more than a decade after reunification attracted much comment among scholars of Vietnam in Europe, the USA and the Soviet Union.

Analyses of the reasons for the policy change are to be found in Vo Nhan Tri (1990a: 181-240; 1990b:16-18; 19911, Nguyen Van

2 N h n Dan, 6 December 1990.

Huy (19901, Le Dang Doanh (1991), Fforde and de Vylder (1988:72-123), Fforde (19901, Mio (1989:3946), Dao Duy Tung (1990:3-20), Bogatova (1988:3944), Bogatova et al. (1990:14-15), Ma (1988:l-81, Porter (1990: 72-88; forthcoming), Kimura (1990), Crosnier and Lhomel(1990), Cima (1989: 786-799), Funnel1 (1989276-86), Pike (1990: 117-20), Duiker (1989 351-61; 1990:lT--sO), Stern (1988), Kim Ninh (1990:388ff), Hemery and Nguyen Duc Nhuan (1989:12-13), Tauriac (1990), Hemery (1991), Brabant (1990) and Ronnas and Sjoberg (1991). An even larger literature has sprung up on the consequences of the changes in policy-making for economic growth and living standards in Vietnam in the 1990s. In what follows, we will attempt to survey and assess this literature.

Economic ’Renovation’: 1986-90

The Sixth Party Congress, after admitting the serious economic errors committed in the past, emphasized that ‘the general objectives of the fourth five-year pIan were to stabilize all aspects of the economic and social situation’. By ’stabilization’, the party meant the stabilization and development of ’production distribution and circuIation of goods; stabilization and gradual improvement of the material and cultural life of the p e ~ p l e ’ . ~ In December 1987, at its fourth plenum (of the Sixth Congress), the party stressed that top priority should be given to ’the implementation of the three major economic programs (food staples, consumer goods and exports), particularly the food staples p r~gra rn ’ .~ The government intended to allocate ’60 per cent of the central budget funds and 70-80 per cent of the local [budget] funds’ to the implementation of these programs (Dao Duy Tung 1990:9). Broadly, at both the Sixth Congress and the following plena, a

3

4

Sixth National Congress of the Communist Party of Vietnam: Documents. 1987 Foreign Language Publishing House, Hanoi:44-5. Nhan Dun, 20 December 1987.

$



policy of economic reform was advocated emphasizing the following points:

structural readjustment of the national economy, and consequently of investment policy; promotion of a ’multi-sectoral’ economy; an overhaul of the mechanisms of economic management; reorganization of state administration; and diversification of Vietnam’s external economic relations.

Structural adjustment and sectoral perf onnance

The first goal of the new policy, readjusting the structure of the economy and investment policy in order to implement the three major programs mentioned above, meant in fact that the party would abandon the classical sociahst industrialization model, and henceforth would give top priority to agriculture, and then to light industry and handicrafts (Le h c Thuy 1990:7). It was emphasized that there was a continuing need to develop a number of important heavy industrial sectors, particularly those servicing agriculture, light industry and exports, and transport and communications, in order to support the three programs effe~tively.~ In practice, in spite of the official rhetoric proclaiming agriculture as the primary economic battle front, the share of agriculture in gross state investment did not increase; in fact it fell slightly to 18.2 per cent in 1987 compared with 20 per cent in 1976 and 19 per cent in 1980 (Beresford 1990:Table 8). Beresford’s figures indicate that by 1987 over 40 per cent of state investment was going to industry, 11 per cent to transport and 21 per cent to ‘unproductive’ uses.

Most authorities agree that the implementation of the new management mechanism in agriculture, and particularly the changes set out in the Politburo’s Resolution No. 10 issued in April 1988, have given farmers greater inccntives to work harder (Vo Nhan Tri 1990a:135; Fforde 1990:llff; Beresford 1990;

5 Nhan Dan. 28 December 1987.

UNDP 1990:88-9). Since the end of 1988, peasant households have been encouraged to take over all decision-making in agricultural production, and the role of agricultural co- operatives has been limited to organizing technical services for individual farmers (UNDP 1990237-8). However it would be premature to declare that agricultural co- operatives have been abolished; rather it has been asserted that they now exist more in the form of loose associations of farmers, joined together by service contracts (Demaine 1991:1096). Fforde (1990:12) has argued that the number of cadres employed in co- operatives has been greatly reduced. In addition, in 1989, compulsory procurement quotas- which were in fact another form of agricultural tax imposed on the peasants-were replaced by the system of free trade at marketdetermind prices (Le h c Thuy 1990).

The low priority accorded the agricultural sector in the allocation of state investment funds is reflected in the slow growth in irrigated land through the 1980s (irrigated rice land was estimated at 1.84 million hectares in 1987 compared with 1.7 million hectares in 1980). Almost 65 per cent of all irrigated rice land was in the north (Vo Tong Xuan and Timmer 1990:Table 3). But in spite of this neglect, recent FA0 sources indicate that average paddy yields per hectare in Vietnam in 1989 were 3.1 tons, which is quite high by Southeast Asian standards. The Vietnamese average yield may be compared with 4.2 tons in Indonesia, 2.7 in the Philippines, 2.7 in Malaysia and 2.1 in Thailand (FA0 1990: 118-19). Urea use has been growing and recent farm-level data indicate that over 400 kg of nitrogen (as urea) is being applied to high-yield variety (HYV) crops in areas in the Mekong Delta and the North Midlands, which again is quite high in comparison with Thailand or the Outer Islands of Indonesia. But, as is the case in many other parts of Southeast Asia, fertilizer use on traditional varieties grown in mountainous regions under rainfed conditions is much lower (Vo



Beginning in March 1989 the government implemented a series of

drastic measures recommended by the IMF; including curtailing subsidies to state enterprises and employees, a

tight monetary squeeze and a massive devaluation of the dong.

Tong Xuan and Xmmer 1990:Table 9). In spite of the technological backwardness of rice agriculture, production grew quite rapidly through the 1980s at an annual average rate of 4.4 per cent (General Statistical Office 1990:37), and was particularly high in 1987-89, reaching 25 per cent. Apart from the positive impact of decentralizing decision-making to individual producers, and the distribution of HYVs and fertilizers, favourable weather conditions, particularly in 1989, played a major part in this result (Vzefnam Courier, No. 5, March 1990:12; Hiebert 1990a:34).

Rice production grew faster than the population through the 1980s, with the result that the amount per capita increased from 217 kg in 1980 to 294 kg in 1989 (General Statistical Office 1990:40). Over the same period, per capita food production grew from 268 kg to 333 kg. But growth in per capita production did not translate into an equal increase in food available for consumption. In 1989 Vietnam exported 1.4 million tons of rice, making it the third largest rice exporter in the world, behind Thailand and the USA (Hiebert 1990a:32). In 1990 rice exports amounted to 1.5 million tons? However, these exports brought about a domestic shortage of rice, and prices soared in Hanoi and in other northern provinces. Phan Van Khai, Head of the State Planning Committee, admitted that in late 1990 ’the price of rice was as high as 2000 dong per kg in Hanoi’?

6 Nhan Dan, 6 December 1990.

whereas Hanoi Radio reported that ’rice prices in Ho Chi Minh City have doubled since June 1990 because Vietnam has boosted grain exports’?

Turning to the consumer goods program, there can be little doubt that the great shortage of raw materials and spare parts, the ending of subsidies to state enterprises, the strict credit squeeze, and the liberalization of consumer imports leading to an influx of foreign goods have together seriously affected Vietnam’s light industry, particularly during the last two years of the fourth five-year plan. Because of the shortage of raw materials, energy and spare parts, state enterprises in the light industry sector were reported as operating at only 50-70 per cent of their capacity.’ Beginning in March 1989 the government implemented a series of drastic measures recommended by the IMF, including curtailing subsidies to state enterprises and employees, a tight monetary squeeze and a massive devaluation of the dong. These measures checked the soaring inflation rate but they also drove Vietnam’s industrial sector into recession.

to have fallen by 4 per cent after sustained growth of around 10 per cent per annum through the 1980s (UNDP 1990:119), although more recent evidence indicates some recovery in 1990 (Asian Development Bank 1991:Table 2.11). In this tougher economic climate, many state enterprises were reported as unable to sell their products or pay their workers, and banks were in no position to bail them out. A government economist was quoted in 1989 as saying that 10 to 15 per cent of state industrial enterprises might have to be closed down or sold to private entrepreneurs if they were unable to adjust to the new policies of profit-based management (Chanda 1989:86-7; see also Dao Duy Tung 1990 and Bogatova et al. 1990).

In 1989 industrial growth was estimated

7

8 9

Voice of Vietnam, Home Service, 23 gmt 19 December 1990 (Radio broadcasts relayed by Moscow Radio and monitored by Vo Nhan Tri) Quoted in FEER 16 August 1990:65. Thuc Trang Kinh Te X a Hoi Viet Nam Giai Doan 2986-90, (Actual Socioeconomic Situation in Vietnam, 1986-9), Thong Ke, Hanoi, 1989.



A flood of consumer goods imports from China, Singapore and Thailand since early 1989 was also harming Vietnamese industry, and in April 1990, two hundred directors of state-owned enterprises in Ho C h Minh City called on the government to slow this influx of foreign goods by taxing imports and lowering taxes on locally produced products (Hiebert 1990b).

The third production sector to be emphasized was exports. The 1990 UNDP report (1990:56) pointed out that ‘in the framework of a centrally planned economy, Vietnam’s exports and imports were subject to extensive controls, including a comprehensive system of import and export quotas, licensing monopoly in foreign trade, and foreign trade planning’. In the official trade and balance of payments data, trade and capital flows with countries of the former CMEA were kept separate from dealings with OECD nations and other developing countries. These last two groups were classified as the ’convertible zone’ and their trade was denominated in dollars, while trade with the CMEA countries was denominated in convertible roubles (UNDP 1990:5643; Fourniau 19899ff, 1991).

Assessing the relative importance of the two trading relationships is difficult because of the problem of determining a meaningful dollar/rouble exchange rate. But it is clear that trade with the CMEA countries grew more rapidly in the early 1980s as many OECD countries applied various types of sanctions in the wake of the invasion of Cambodia. Fourniau’s data indicate that imports from the convertible zone countries fell sharply after 1979, so that by 1983 they amounted to only $412 million compared with over $900 million in the late 1970s. Exports to convertible zone countries stagnated at under $159 million between 1979 and 1981, although they did grow to $465 million by 1987. Over half of this growth was due to expanding trade with developing countries, mainly in Asia (Fourniau 1989:42-3).

Between 1987 and 1989 extensive changes in the trade regime were undertaken in order to make the domestic economy more responsive to international trade opportunities. The

~

The impact of these changes on exports to converti6le zone countries has been dramatic. Official data quoted in the UNDP report (1990:61) indicate

they increased from USS66.3 million in 1987 to US$976 million in 1989.

~~

dong underwent a series of devaluations relative to the dollar, and the official exchange rate fell from 18 to 4500 per dollar (UNDP 1990:61). Since early 1989 the rate has tracked the parallel market rate quite closely, and by late 1991 had fallen to 14,700 dong to the dollar. This prompted the authorities to sell gold and dollars to defend the currency, and by early 1992 the rate had risen to 10,500 dong to the dollar (Hiebert 1992). Since October 1988, individuals and enterprises have been able to open foreign currency accounts and sell foreign exchange to the Bank of Foreign Trade, and in 1991 two foreign exchange centres opened in Hanoi and Ho Chi Minh City, representing ’Vietnam’s first attempts at establishing a fully fledged currency market‘ (Hiebert 1992:54). Export subsidies and retention schemes have been abolished. The exchange rate relative to the convertible rouble has also been devalued several times, although in 1989 the rate still varied according to the category of trade. Some export quotas to rouble zone countries have been retained in fulhlment of bilateral treaties.

The impact of these changes on exports to convertible zone countries has been drama tic. Official data quoted in the UNDP report (1990:61) indicate that in dollar terms they increased from $366.3 million in 1987 to $976 million in 1989. Exports to the rouble zone have also increased, although less rapidly, and in 1989 and 1990 were smaller in value than those to convertible zone countries even if the official exchange rate of one convertible rouble to the dollar is used (Foumiau 1991:23). In 1990 exports to these countries were estimated by Foumiau to be $1.4 billion, compared with only $366 million in 1987. Part of this



dramatic growth has been due to rice exports, and part to aquatic products, and light industrial and handicraft products. But the most important single factor contributing to the growth has been petroleum exports, especially to Japan. Fourniau's estimates show that by 1990 Japan was by far the most important destination for Vietnamese exports, taking an estimated $543 million. The OECD countries as a whole took $691 million, compared with $718 million to other Asian developing countries. Thus Japan and other Asian countries accounted for almost 90 per cent of Vietnam's exports.

The growth in imports from the convertible zone has been less rapid, so that by 1989 there was actually quite a substantial trade surplus of more than $300 million with these countries, although official data indicate that this was reversed in 1990 (Hiebert 1991x52). But it should be noted that official data on the value of imports from, and exports to, the convertible zone quoted by the UNDP are lower than the estimates presented by Fourniau. The official data for imports in particular are widely considered to be grossly understated because of smuggling." The data assembled by Fourniau (1991) from IMF, OECD and United Nations sources, supplemented by his own estimates, suggest that imports from convertible zone countries in 1990 amounted to $1.5 billion, of which $930 million were from the developing countries of Asia and only $215.6 million from Japan. Thus, while the overall trade balance with all convertible zone countries was only slightly in deficit in 1990, exports to Japan were over twice the value of imports, but exports to the ASEAN countries were only two-thirds of the value of imports.

To sum up, progress on the attainment of the goal of restructuring the economy to emphasize the production of foodstuffs, light industrial goods and exports has been considerable, especial€y as far as exports have been

concerned. However, the failure to reorient investment to agriculture and light industry suggests that it may be more difficult to sustain the growth of exports from these sources over the next few years, especially as domestic demand increases. Much will depend on overall macroeconomic management, and on providing individual producers with an incentive climate that encourages investment in those sectors in which Vietnam has a comparative advantage. Another crucial determinant of the growth of exports, especially in the petroleum sector but also in labour-intensive manufacturing, will be the growth of foreign investment.

Promotion of a 'multi-sectoral' economy The term 'multi-sectoral economy' has assumed increasing currency in Vietnam to underline the switch from a policy of quickly eliminating the private sector to one of encouraging what in Western Europe is termed a mixed economy where the state and private sectors each have a role (van Arkadie 1991:43). But defining the boundaries of each sector in Vietnam has not proved easy. One analysis has suggested the following distinction:

In Vietnam's economy, the state-owned sector plays a leading role. This does not imply an uncontrolled development of the state-owned economy, but a selective development of the necessary links in each business area and each field . . . Development of the state-owned sector should only focus on key business areas and units of pivotal importance to the national economy, with advanced technology, and which need large investments (Nguyen Van Huy 1990:38). In practice, however, since the systematic

shift from state-subsidization to economic (or cost) accounting, it has become obvious that many state enterprises are over-manned and burdened with obsolete technologies and large stocks of unsaleable goods. One senior official has admitted that

10 N h n Dun pointed out that 'since early 1990, the quantity of illegally imported goods is nearly treble that of early 1989, and nearly quintuple that of 1988. I . . . Market surveys conducted in various major cities ... showed that foreign contraband accounted for at least 6&65 per cent of the total quantity of goods available on the market _ . _ I , quoted by Voice of Viefnum, Home Service, 23 gmt, 3 August 1990.



about 30 per cent of the state enterprises- those which are technologically well- equipped and can meet the demands of the market continue to operate. About 40 per cent need to be reorganized and modernized in order to continue production. Thirty per cent either go bankrupt or are changed into shareholding companies (Le Dang Doanh 199135). It is hardly surprising, given the magnitude

of the problem, that progress has been slow, and many state enterprises are still being kept afloat with considerable subsidies, usually given in the form of ‘loans’ from the state banks (de Vylder 1990: 23). According to one recent report, in 1991 many state-run industrial enterprises were still receiving ’cheap raw materials and energy, large tax breaks, and credit at 2.8 per cent a month from state-controlled banks, which pay depositors 4 per cent a month’. Much of the deficit in the state budget in 1990 was due to subsidies to loss-making state firms; however, Hiebert reported that ’the party fears that cutting subsidies to state enterprises would trigger the firms’ collapse, causing massive unemployment and popular discontent’ (Hiebert 1991 a:52).

More progress has been made towards enhancing the role of the private sector in agriculture. We have already drawn attention to the reduced role of co-operatives, which are at present responsible only for the provision of services to peasant households, such as irrigation, plant protection, seed stock replenishment and the supply of industrial inputs. Under the ’net product contract’ system, the peasant household makes use of the land under contract to carry on its farm enterprise and is an independent unit with the right to sell its produce at market prices (Vo Nhan Tri 1990a:190). Although this means d e facto recognition of the failure of agricultural co-operatives, the old system remains in that the state’s formal property rights over land are still protected, and this could hold back the development of production incentives. Land is allocated for cultivation by individual households while still remaining government property, and

reports abound that many farmers are requesting a return to a system of individual property rights. Certainly, as de Vylder (1990:22) points out, ’the virtual dismantling of the traditional cooperatives has . . . created a confused situation as to landholding and property rights, and land use conflicts have become increasingly common’. Some commentators feel that the inevitable outcome of the current reforms will be the complete demise of the co-operatives and a growth in large-scale commercial farming, probably using hired labour, by the more successful and entrepreneurial among the rural population. The rest will be encouraged to leave agriculture and take up non-agricultural activities (Beresford 1990:22).

government is working towards enacting laws on property rights, including procedures for the use and inheritance of property, and on the right to entrepreneurial activity, ’in order to enable every citizen to engage in production and other economic activities in a calm atmosphere, and to do away with unreasonable bans and restrictions’ (Dao Duy Tung 1990:12-13). On the other hand, official statements suggest that many government and party officials are still ambivalent about the mle of private property and private enterprise in the economy. In his closing speech at the sixth plenum (March 1989), the then Party Secretary, Nguyen Van Linh, stressed that

the private sector will terminate its role when it is no longer effective . . . Our party has taken a clear decision to recognize the . . . development of the private sector, and at the same time, through economic and educational measures, to orientate it mainly towards making investment in production . . . , to conduct state inventory and control, and to [make] its operations, step by step, [move in] the socialist orbit . . . It is mainly through the process of using . . . regulation, inventory and control by the socialist state that we orientate the capitalist sector towards different forms of state capitalism. In so doing, we carry out socialist transformation practically and effectively. There is no need to use the sabre-rattling word [socialist]

Vietnamese authorities have stressed that the



transformation that scares people because its former [bad] impression still remains heavily in mind."

On a more accommodating note, Dang Xuan Ky, Director of the Marxist-Leninist Institute in Hanoi, was quoted in 1990 as saying that 'the capitalist economic sector . . . will still be around for more than three or four five-year plans' (Hiebert 1990c:13). By late 1990, the National Assembly had passed a Law on Private Enterprises which became effective on 15 April 1991. According to this law, 'the state . . . will protect the ownership of means of production, the right to inherit the capital and other assets of private enterprises as well as the right to free enterprise in compliance with the law'.l2

In fact, however, in spite of a liberal policy towards the private sector, private capital did not flow into the productive sectors as was anticipated, but mainly into the trade and service industries where a rapid turnover could be ensured without any particular risks. Businessmen were reported as being wary of investing heavily in production, and a poll taken among prominent 'capitalists' in Ho Chi Minh City suggested that the private sector was discriminated against in getting supplies of material and equipment, in obtaining credits and winning tax breaks. In a recent survey, 95 per cent of those inter- viewed said that people are still reluctant to invest in production and business because of the absence of concrete state regulations, and 75 per cent said they were deterred fmm investing because of the intricacies of administrative proced~res.'~

Overhauling the mechanisms of economic management In spite of the fact that Vietnam was ostensibly a centrally planned economy, most authorities agree that the central planning mechanisms were 'never very strong' (Ronnas and Sjoberg 1991:lO). As these authors point out, given

the predominance of the small-scale agricultural sector in the economy of North Vietnam, the weakness of the state planning apparatus there was hardly surprising. The only sectors amenable to state direction were manufacturing, utilities and transport where state enterprises predominated, but these sectors were weakened during the 1980s by the slowdown in Soviet aid and the curtailment of budgetary subsidies. Thus it might have seem4 relatively simple for the CPV to move away from central planning towards a market economy, where planning is more indicative than mandatory, and this appeared at first to be one of the central aims of the restructuring process.

But in practice ideological prejudices die hard. At the Sixth Party Congress, the party advocated the combination of central planning with greater reliance on market forces; however, the emphasis was still very much on central planning. Since the sixth plenum (March 19891, the party has stressed that central planning and market regulation constitute a 'dialectical unity' which was described as a socialist-oriented 'planned commodity economy' as currently prevails in China (Vo Nhan Tri 1990b:16-17). The govenunent could thus vary the degree of central planning and market reliance, these two components being of equal status.I4 'The Vietnamese Party and Government', wrote one Vietnamese economist, 'have chosen a mechanism combining organically the instruments of both mechanisms in a way conducive to expanding the market economy with state regulations at the macro level, with a view to realizing the political and social tasks' at each stage of the transition to socialism (Nguyen Van Huy 1990:42). Central planning is thus viewed as more indicative than imperative, although 'spontaneous market forces' are still viewed with disapproval as leading to inegalitarian patterns of growth and encouraging monopolies. In this vein, Phan

11 Nhan Dan 31 March 1989, and Tap Chi Cong San, No. 4,198920. 12 Vietnam Courier, February 1991:7. 13 Vietnam News Agency (VNA),1450 gmt, 4 March 1991. 14 Nhan Dan 3 October 1989.



Van Khai, then head of the State Planning Committee and now Deputy Prime Minister, has recently emphasized that,

in order to perfect the mechanism of economic management, . . . it is necessary to continue the renovation of lcentral] planning in the direction of abolishing the bureaucratic mechanism based on state subsidies, to set up a new mechanism of [central] planning suited to the multi-sectoral commodity economy under macro-economic regulation by the socialist state . . . We must base ourselves mainly on the indicative plan . . .I5 Thus planning is still the main tool of

economic management, and the emphasis is on reforming the planning process rather than abandoning it. In practice, however, senior officials have acknowledged that 'Vietnam is still groping its way at the macro-economic level in converting a highly centralized planned economy into a socialist oriented market economy'.'6 At a news conference in 1990, the then Foreign Minister admitted that '[they] still have some great problems in restructuring towards a market economy, above all in knowledge about banking, financial management, and budgeting, etc'.17 In this respect, a Western Vietnam-watcher has pointed out:

Whilst Vietnam's shift to a market-oriented economic system opened the way for more rapid growth, it also introduced a new set of problems and issues. These are perhaps best seen from the perspective of the development requirements of such a system: a stable macro-economy without major distortions; an effectively operating legal system that can enforce contracts and protect creditors; and a national state apparatus that can coordinate the provision of public services and infrastructural investments in line with national priorities. These requirements are not easy to meet (Fforde 1991 :115-16).

In similar vein, Brabant (1990:223) pointed out that 'the planning mechanism is being hollowed out by the reform without being replaced by a coherent alternative, leading to

15 Nhan Dan 2 September 1989.

Central planning is viewed as more indicative than imperative, although 'spontaneous market forces' are still

viewed with disapproval as leading to inegalitarian patterns of growth and

encouraging monopolies.

a transition phase with incomplete and inconsistent central management'. Russian scholars have stressed that 'the development of market relations has not up to now been accompanied with the creation of a system of social protection against the unpredictable aspects of the market. As a result, events which are quite natural from the standpoint of the logic of the market such as bankruptcy, and speculative operation on the [monetary] market, etc . . . tend to produce growing discontent' (Bogatova et al. 1990:20). Thus it seems that in Vietnam, the market mechanism cannot function properly without fundamental changes in the political, legal and social systems that would extend beyond the CPV's definition of socialism. A Russian economist has warned that 'the reform in Vietnam follows the same guidelines as recent attempts made by other socialist countries in order to escape from the totalitarian economic system. But . . . the experience of those countries witnesses that initial achievements of such reforms fade away soon with the command economy methods coming back' (Yevstigneyev 1990:74).

If it has proved difficult to move very far in the direction of a market economy, it has not proved much easier to tackle the root of the country's inflation problem. Certainly the tough anti-inflationary measures adopted by the Vietnamese government beginning in March 1989 showed surprisingly quick results. These measures, which were formulated in consultation with the IMF, included moves to permit the free sale of gold inside the country; to adopt realistic interest rates for bank loans

16 Vietnam Couriei Nov. 19902; Nhan Dun, 6 December 1990. 17 DAP, Bonn, 11 May 1990, quoted in SWB, FE/0766; A1/3; 17 May 1990.



In 1990 about 30 per cent of inputs were still being sold at subsidized

prices to state enterprises, to assist them in the difficult transition to self-financing.

and savings deposits, so causing a sharp influx of cash into the banks; to reduce the subsidies paid to civil servants and inefficient state enterprises; and to reform the tax system to raise taxes on luxury goods but cut them for inputs intended to boost production. In addition the dong/dollar rate was devalued until it approximated that prevailing in the free market; and more liberal import policies defused pent-up demand for consumer goods and had a generally deflationary effect. Lastly, a bumper harvest reduced pressure on food prices (Wood 1989; Vo Dai Luoc 1990; Bogatova et al. 1990). Following these measures, inflation slowed abruptly, and by May 1989 the General Price Index was actually falling (UNDP 1990:46). But in the process, as we have noted, many enterprises were forced to close, and thousands of people found themselves out of work.

was gathering pace again, with prices increasing at more than 5 per cent per month. The problem, as the UNDP report pointed out (1990:45), was that in spite of the severity of the anti-inflation measures some of the basic weaknesses of the fiscal and monetary system had still to be tackled. The revenue base remained weak and the government deficit too large. The explosive growth of the deficit in the 1980s was the fundamental reason for the lugh rates of inflation after 1983 and, in spite of the taxation reforms of late 1987, tax revenues remained a small proportion of total revenues and of national income. More seriously, with the drastic reduction in foreign loans and grants in the first half of 1990, almost 90 per cent of the deficit was funded by borrowings from the State Bank, which was potentially very inflationary (UNDP 1990: Table 4.3). By early

By mid-1990 there were signs that inflation

1991 the inflation problem was threatening once again to get out of control. Price increases were well above 10 per cent per month, mainly because of the shift to trade in world market prices with the USSR. The inflation rate fell back later in 1991; it averaged close to 70 per cent for the year, which was much the same as in 1990.

Another reason for the acceleration in open inflation is that the government has largely abandoned price control and rationing. One economist claimed in late 1989 that

the government does not impose prices through administrative orders, but instead uses mainly economic policies and measures to influence the supply-demand relationship, and to regulate and guide market prices. The government fixes the prices of only a limited number of materials and commodities which are very essential to production and the people's life and which are in the hands of the state economic organisation .. . most materials and commodities are to be bought and sold at negotiated prices. Materials in scarce supply are to be planned in keeping with economic objectives and tasks, and sold to users by auction (Nguyen Van Huy 1990:45).

However, another official claimed that in 1990 about 30 per cent of inputs were still being sold at subsidized prices to state enterprises, to assist them in the difficult transition to self-financing (Dao Duy Tung 1990:17).

state sectors (i.e. collective, individual and private enterprises) are concerned, it has been claimed that they

enjoy self-management in all fields of their business. The Government makes use of the system of policies and macro-management instruments only to guide and help these units to develop their business in keeping with the general orientation, and to achieve efficiency . . . The Government defines rules for business permits, lists of branches or trades in which business is not permitted or subject to restriction; promulgates rules about registration of product quality; exercises supervision and control over the implementation [of policies regarding] labour management, accounting, credits and

As far as economic units belonging to non-



especially taxes and market management (Npyen Van Huy 1990:41). By mid-1990, it was reported in the official

press that in agriculture 'about 90 per cent of the output of rice, 5.6 per cent of that of coffee, more than 90 per cent of the cattle, pigs and pulhy, and nearly 100 per cent of the production of vegetables, fruit and eggs [were] produced by the non-state economic sector'; and in industry the latter 'account[ed] for 50 per cent of the output value (60 per cent with regard to consumer goods), and employ[ed] more than 2 million people . . . '.18 And in order 'to bring into full play the potential of the non-state economic sector', it is necessary 'to quickly promulgate laws and regulations, first of all on trading, labour, the settlement of bankruptcies, and the setting up of courts of law dealing with economic litigation'.''

It is obvious from all these statements that the heavy hand of government regulation still affects most private sector activities in Vietnam. This is hardly surprising as few officials and party cadres comprehend what is meant by a market economy, and many view most private sector activities with intense suspicion. The goal of a mixed economy in which both government and private sector economies operate on a level playing field is still far off. This i s indeed acknowledged by the Vietnamese themselves. Assessing the progress made towards the goal of a multi- sectoral economy, oneVietnamese economist summed up progress at the end of 1989 as follows:

1989 was a year of many positive changes in the national social and economic life: food production increased substantially, export plans were over-fulfilled, and efforts were made by state-owned economic establishments to overcome difficulties and to vigorously switch to the cost-accounting mechanism . . . However, the results achieved are just initial and not yet firmly rooted. Many extremely difficult problems must be solved: the remaining imbalance of economic structures, the great unused

18 Vietnam Courier, August 19906. 1' Vietnam Courier, August 19906

The goal of a mixed economy in which both government and private sector economies operate on a level

playing field is still far off.

production capacity, the inadequate rate of savings, the great demand for employment and the slow improvement of people's life (Nguyen Van Huy 1990:64-5).

Foreign observers familiar with the process of economic reform in other Soviet-type economies have stressed that these countries are experiencing similar difficulties. Nove has pointed out that abolition of dual pricing policies may not necessarily be desirable if the single price used is the 'wrong' price in the sense that subsidies are required to maintain it. He also stresses the need to protect the poorer sections of society as the process of reform continues: 'one hopes that the (correct and necessary) commitment to encourage markets will not go too far, that the very poor are not left without a necessary minimum of support and relief' (Nove 1990:72-3). More broadly, Brabant (1990:224) has pointed out that most reform processes in centrally planned economies have fallen short of their original objectives, and that some instability and 'outright vacillation in rules and regulations' are inevitable, and indeed to some extent part of the learning process of managing a more decentralized and diversified economy.

Reforming state administration

The goal of reforming the system of public administration has been given high priority in official statements, but progress has been slow. Recent statements by senior Vietnamese officials have claimed that

the state apparatus has been streamlined but the functions of state organs have not been stipulated clearly so cooperation between them is not so good. Sometimes, too many offices take part in solving one question and



it takes time to make a final decision . . . Smuggling and corruption have made the state . . . less effective. The retraining of cadres has not been thoroughly carried out . . . The pressing need at present is to train a contingent of businessmen who have an up-dated and wide knowledge of markets, domestic and international (Le Dang Doanh 1991239).

The state management apparatus remains bureaucratic, cumbersome and ineffective with regard to macroeconomic management. Cadres have little knowledge of macroeconomic management mechanisms, which still lack uniformity and efficiency . . . Discipline and law are both weak and inadequate, which greatly hinders the Government’s macro-economic management (Nguyen Van Huy 1990:57).

In similar vein, Nguyen Huu Dong’s comparison of the reform process in China and Vietnam has emphasized that

the over-centralised management apparatus must cope with an economy that is still unintegrated and at the limit of self- subsistence . . . Bureaucracy in itself hardly poses any major problem. It is inefficiency that constitutes the chief difficulty ... The presence of an inefficient bureaucracy is a concomitant of the combination of the institutional and political will to control the management apparatus and real economic mechanisms and the practical inability to exert that control (Nguyen Huu Dong 1990:136).

These problems are by no means unique to Vietnam, and indeed are to be found in most developing countries. As is the case in many other parts of Asia, a root cause of much of the bureaucratic inefficiency and corruption is poor pay. The UNDP report (1990:43) pointed out that ’the salary structure for civil servants and state enterprise employees, established in 1960, reflected egaIitarian principles and the penury imposed by war conditions’. Over the years some attempt to adjust salaries has been made, although it is

widely agreed that the real value of civil service remuneration fell drastically during the inflation of the 1980s. In January 1989, the government implemented a comprehensive restructuring of the wages of government workers, involving a reduction of wages in kind. As a result of this change, the minimum monthly wage of a civil servant was quadrupled, but there has been no adjustment since then, and continuing inflation is rapidly reducing the real value of the increase. In some state enterprises, performance bonuses have been introduced, but in spite of such changes private sector salaries are estimated to be between two and four times those in the public sector (UNDP 1990:44). Because of these disparities, bright young people are reported as no longer wanting employment in public sector occupations, including the teaching service (Heibert 1991b:20).

Broadening Vietnam’s external economic relations

In a speech delivered at the ’Investment Forum for Vietnam’ held in Ho Chi Minh City in early 1991, the then Party Secretary Nguyen Van Linh emphasized that

for us, doing our utmost to combine internal efforts with the open-door policy is the way to bring into full play our potential . . . advantages . . . Alongside the development of diplomatic relations, Vietnam advocates expanding economic cooperation in all fields and in various forms [with all countries], in consonance with the internationalization of contemporary economic life.”

However, in another speech, he also warned that

while actually expanding foreign economic relations, we must uphold our vigilance against negative influences. Once our door is open, not only will the pure and healthy air pour in, but .. . flies and mosquitoes will also follow. Aware of this, we must take the initiative in co ing with these things effectively . . . 2 P

20 Voice of Vietnam, Home Service, 1430 gmt, 16 March 1991. See also Nguyen Co Thach, as reported in Vietnam Courier,

21 Nguycn Van Linhs speech at the 6th plenum, as reported in Nhan Dun, 31 March 1989. Sheila Tefft The Christian Science March 1990:4.

Monitor, 17 October 1990.



The then Deputy Premier (and now Premier) Vo Van Kiet pointed out, in a speech delivered at the World Economic Forum in Switzerland in 1990, that

we are carrying on the policy of broadening our external economic relations [aiming at] expanding goods exchange, cooperation and investment with all economic organizations and all countries . . . irrespective of their political system and on the principle of equality and mutual benefit. We are steering our country toward ever deeper and broader participation in the international division of labour . . . We sincerely want to establish economic ties with our friends in all continents, especially in East Asia, the Pacific and South- east Asia . . . At present, the Vietnamese government is offering preferential treatment to all foreign-invested projects in service of the three major national economic programs . . . and also projects in the banking [sector]. For the time being, we encourage small and medium-scale investment pro'ects employing a large workforce. 2 2

Efforts to renovate foreign economic relations include

planning and focusing investment on organizing the production of key exportable goods and establishing . . . export-oriented production areas; reforming the mechanism of foreign trade and such related fields as finances, banking, customs, security etc; and switching import-export activities over to cost accounting on the basis of a unified and flexible exchange rate defined by market mechanisms (Nguyen Van Huy 1990:48).

The main tool for attracting foreign investment has been the new 'Law on Foreign Investment' which was passed by the National Assembly on 29 December 1987, promulgated on 9 January 1988, and implemented in September of that year.23 According to Article 4 of this law, there are three forms of investment which the government wishes to encourage: a) contractual business co-operation such as

The Vietnamese foreign in vestment law was called by the London Economist

'one of the most liberal in all Southeast Asia '.

By mid-1990 investment approvals amounted to more than US$l billion, and the following twelve months saw further

sharp acceleration so that by mid- 199 1 approvals had surpassed the

two billion dollar mark.

production and management sharing; b) joint ventures between foreign investors and Vietnamese economic organizations; and c) ventures wholly owned and operated by foreign investors. In 1990, this law was amended to allow private Vietnamese economic organizations to establish business relations with foreign enterprises, something not permitted in the original law passed in December 1987?4 Although joint ventures remain the preferred vehicle for foreign investment, the foreign partner can hold up to 99 per cent of the equity. The amended law also provides for the establishment of multi- partner joint ventures. A number of other amendments concern exemption from corporate income tax for a minimum period of two years starting from the first profit- making year, and a 50 per cent reduction in tax for a subsequent maximum period of two years. In June 1990, the government adopted a new Labour Law25 that 'allows foreign businessmen to hire foreign experts and to recruit local workers from anywhere in the country. However, it still requires all hiring to be done through the government service organizations'.

The Vietnamese foreign investment law was called by the London Economist (19.12.87) 'one

22 Speech at the World Economic Forum reported by V N A , 1413 gmt, 16 February 7990. 23 For all these documents, see Office of the State Committee for Co-operation and Investment, Legal Writings on Foreign

24 See Vo Dong Giang's comment on amended Foreign Investment law, V N A , 0658 gmt, 17 July 1990. 25 Vietnam Courier, March 1991:8; F E E X 13 September 199061.

Investment in Vietrzam, Hanoi, 1990.



of the most liberal in all Southeast Asia' and it has generated a considerable literature. Summaries of the main provisions of the law are provided by Phan Quang Tue (1990) Cohen (1990), Vo Nhan Tri (1990a215-18) and Chan and ODonnell(1988); French-language discussions are given in Luu Van Dat (19881, Chan, et al. (19891, Centre du Commerce kterieur Franqais (19891, Lecat (1989) and Reymondon (1991). Inevitably, given doubts about the implementation of the law and about the pace of economic reform in Vietnam, the initial response of the international business community was cautious, but interest accelerated as international confidence in the restructuring process grew. By mid-1990 investment approvals amounted to more than $1 billion, and the following twelve months saw further sharp acceleration so that by mid-1991 approvals had surpassed the two billion dollar mark (Hiebert 1991c:62). Of this around $400 million has already been implemented. A substantial share of the investment has been by ten foreign oil companies, and by hotel chains. Investors have been reported as reluctant to invest in infrastructural projects, or in mining. Over 60 per cent of projects have been located in coastal regions in the south, especially in and around Ho Chi Minh City.

been prominent among European investors; others come from Australia, South Korea, Taiwan, Hong Kong and Thailand. Conspicuous by their very small presence, especially in comparison with other parts of Southeast Asia, have been Japanese companies. Fear of angering the USA appears to have been the main reason for this reticence, although several major trading companies have opened representative offices in Vietnam, and by mid-1991 eight Japanese joint ventures had been approved. Certainly there can be little doubt that the continuing American embargo on trade with, and investment in, Vietnam, together with American opposition to Vietnam gaining access to loans from the multilateral lending

British, Dutch and French companies have

26 Vietnam Courier, April 1991:5

agencies, have disadvantaged Vietnam in its search for foreign investment, although UN agencies have been assisting the government in attracting foreign investors. A conference jointly sponsored by Vietnam's State Committee for Co-operation and Investment, UNIDO and UNDP was held in Ho Chi Minh City in March 1991, and it was reported that 'eleven investment licences had been issued on the occasion of the Forum with a total investment of $241 million . . .'.26 Press reports quote foreign consultants predicting a flood of investment once the American embargo is lifted (Hiebert 1990d:72-3).

Apart from the embargo, the growing literature on foreign investment in Vietnam stresses the many problems that investors have encountered, including bureaucratic delays with licence approvals, poor infra- structure which adds considerably to production costs, lack of skilled workers, a cumbersome and slow legal system, bureaucratic conflicts between levels of government, and growing corruption. Cohen (19901, while pointing out the broad similarities between Chinese and Vietnamese legslation, argues that provisions concerning taxation in the Vietnamese law and implementing decrees are rather vague and appear to leave the authorities considerable discretion in determining the tax treatment of a given enterprise. Provisions designed to maximize retention of an enterprise's foreign exchange earnings within the country could also cause problems. Foreign investors are also concerned over the reservations about the liberal economic policies that have been openly expressed by some senior party officials; it is feared that at some time in the future these hardliners could reverse current policies and alter the terms on which existing joint ventures operate. On the other hand, it should be stressed that the problems encountered by foreign investors in Vietnam are by no means unique to that country, and many businessmen obviously feel that it is worth persevering.

30 ASIANPACIFIC ECONOMIC LITERATURE May 1992

~~


Although the export surge of the late 1980s was only partly due to foreign investment, it is expected that over the coming decade foreign joint ventures will greatly enhance production for export in sectors such as petroleum, tourism and labour-intensive manufactures. But there can be little doubt that direct foreign investment alone will not solve Vietnam’s pressing balance of payments problems, which have been exacerbated by the abrupt withdrawal of aid and trade credits from the former USSR (Crow 1990; Hiebert 1991a:52). Under a new bilateral agreement signed with what was still the USSR in 1991, trade will be denominated, and conducted, in hard currencies. It will also be greatly reduced, both in absolute terms and relative to other countries, especially in Asia. This will particularly affect imports of crucial raw materials such as petroleum products, raw cotton and fertilizers which, given current Soviet supply constraints, will have to be purchased from other sources. This in turn will almost certainly increase the trade deficit with the convertible zone countries. The UNDP report (1990:67-9) advocates a phased build-up of official development assistance, beginning with program aid to increase convertible currency imports, and the funding of special programs for the redeployment of redundant workers.

Vietnam‘s external debt grew considerably through the 1980s. The Asian Development Bank (ADB) has estimated (1991:122) that the total stock of debt was $14 billion in 1989, although most of this was owed to countries of the former CMEA, and its dollar value is uncertain. Estimates by Fourniau (1991:35) are somewhat higher than those of the ADB; they put debt outstanding in 1989 to CMEAcountries at $14 billion and to convertible zone countries at $1.5 billion. Of this latter amount, $990 million was in the form of long-term debt, much of it owed to institutions in the OECD. Debt service obligations were estimated by the ADB to be almost 58 per cent of exports of goods and services in 1989, although this ratio may

be misleading because of the problem of assessing the relative value of exports and debt obligations to former CMEA and convertible zone economies. Some Russian writers (Trigubenko 1991) have described the debt owed to the former USSR by Vietnam as ’economic assistance’ but it has been made clear that it is regarded as a loan and must be repaid over the medium term.

Assessing Vietnam’s economic prospects

Income growth and poverty alleviation A Resolution of the Eighth National Assembly (December 1990) acknowledged that

the 1990 socio-economic situation was more difficult and more complicated than before . . . Our country’s economic situation still has a serious imbalance. Both Gross Social Product and National Income still remain low. A large number of state and collective . . . enterprises still experience many difficulties. Some of them even face the danger of bankruptcy. The state budget still displays a major deficit. The management of money and credit is still full of shortcomings. Market prices have not been stabilized yet. The unemployment rate is still on the rise. Cadres, civil servants, soldiers, retirees ... and ethnic minorities still experience many difficulties in their daily life . . .27

Exactly how poor Vietnam is in relation to other developing countries in Asia and Africa is extremely hard to determine. National income statistics are still prepared according to the material product methodology, and exclude services not directly related to material production such as rent, public administration, education and health, banking and recreational services (UNDP 1990:27). They are thus understated compared with estimates prepared according to the United Nations System of National Accounts (SNA) methodology. In the absence of such estimates for Vietnam it is impossible to make sensible international comparisons of GDP or GNP per capita, and the

27 Voice of Vietnam, Home Service, 1430 gmt, 23 December 1990.



World Bank excludes Vietnam (together with Burma and Cambodia) from its rankings of countries by per capita GDP, published annually in their World Development Report. However, there is little reason to doubt that Vietnam would fall in the ’low income’ group of countries, probably below China and India which were estimated by the World Bank (1991:204) to have per capita GNP of around $350 in 1989. Brezinski (1990:Table 1) estimates that in 1985 Vietnam‘s per capita national income was only 7 per cent of the CMEA average, compared with 60 per cent for Cuba and 50 per cent for Mongolia. Similar disparities existed in consumption per capita and in labour productivity.

Vietnam does, however, rank rather better than many other low income countries in Asia and Africa in terms of such indicators of human development as life expectancy and educational attainment. The ’human development index’ published by the UNDP (1991:lZO-1) estimates life expectancy at birth in Vietnam in 1989 to be 62-7 years, which is about the same as Indonesia, and higher than India (59.1 years) or Bangladesh (51.8 years). Vietnam also scores higher on the UNDP educational attainment index than Indonesia, Burma or Pakistan (or indeed countries such as Turkey, Syria and Iraq where GDP per capita is above $lOOO). In terms of gender disparity in education and in labour force participation, Vietnam also scores rather better than Indonesia, and much higher than the countries of South and West Asia and Africa. While doubt must remain about the quality of education, there can be little doubt that the quantitative achievement has been impressive.

In the longer run, the rate at which living standards can improve in Vietnam will depend on the overall rate of growth of the economy. The Asian Development Bank in its report Asian Development Outlook 1993 (1991:Table 2.11) predicted that the policy reforms of 1989-90 would lead to some acceleration of GDP growth in 1991 and 1992; it cited growth rates of 3.8 per cent and 4.9 per cent respectively. The bank indicated that the major impetus to growth would come from the industrial sector, which they projected would expand by 6-7 per cent per annum in these two years. A

considerable part of this, and future growth, will come from accelerated inflows of foreign capital, a point to which we return below.

Population, labour force growth and educational development

Vietnam’s medium-term demographic problems remain formidable. The 1989 census registered 64.4 million people; Vietnam is thus the twelfth most populous country in the world, and the seventh most populous in the Asian-Pacific region. The inter-censal population growth rate was estimated to be 2.1 per cent per annum, which is slightly higher than Indonesia and Thailand, although lower than Malaysia and the Philippines (World Bank 1991:254). The growth of urban population was estimated to be 2.3 per cent per annum, which is low by Asian standards, and according to one observer shows ’how successful policies for containing urban growth have been’, although it is conceded that urban population growth will almost certainly accelerate in the future as industrialization gathers pace (Forbes 1990:7). The 1989 census results indicated a fall in fertility through the 1980s; survey results show a high degree of awareness among Vietnamese women of at least some forms of modern contraception and, if the government can improve supplies of contraceptive pills and condoms, fertility should continue to fall rapidly (Vu Qui Nhan 1991: Table 12.2). This combined with already quite low levels of infant and child mortality suggest that population growth rates wiIl decline over the coming decades (Hull 1990). Nonetheless, World Bank projections (1991254) put the population at 83 million in 2000, and 119 million in 2025.

Almost all the recent discussions of economic problems in Vietnam, including the official pronouncements of senior party officials, emphasize the problem of finding employment for a workforce that is growing at more than 2 per cent per annum, a problem aggravated by the demobilization of troops returning from Cambodia, the retrenchment of workers from state enterprises and the return of guestworkers from Eastern Europe and the USSR. A recent analysis estimates that some 600,000 soldiers were demobilized



in 198&90 and a further 360,000 workers made redundant by state enterprises (Tan 1991:318). Some recent reports put the number of unemployed at six million, out of a labour force that the 1989 census estimated to be 30.5 million (Pike 1991:82; Hiebert 1991a:52). It is not at all obvious how this estimate was derived and certainly it needs to be interpreted with considerable caution. The 1989 census in fact revealed a pattern of employment and unemployment that is quite typical of a country at Vietnam’s level of development. Of the totaI population over 15 years that was reported as economically active, only 5 per cent (1.8 million) were enumerated as unemployed, although a further 0.4 million had been working for less than six months in ’temporary employment’. A high proportion of the employed labour force (70.4 per cent) were working in the agricultural sector. Unemployment rates were much higher in urban than in rural areas, and highest among young workers. Unemployment fell to less than 1 per cent for workers over 35 (Central Census Steering Committee 1990:55-67).

This pattern of high unemployment among young people in urban areas fresh out of schools and universities (and the army as well) is very familiar in all the developing countries of Asia. The available evidence suggests that in Vietnam, as elsewhere, they eventually do get absorbed into employment, although it may take some time, and the jobs they find may be of low productivity and poorly rernunerated. The UNDP report (3990:37) claimed that employment growth in Vietnam had in fact been ’buoyant’ up till 1988, although it cautioned that there could be problems absorbing new entrants in the future. Certainly the 1989 census shows that labour force participation rates in Vietnam are very high, especially for women (73.6 per cent). The Human Development Report 1992 found that women comprised almost 47 per cent of the labour force in Vietnam compared with an average of only 26 per cent for all countries in the ’low human development‘ category (LJNDP 1991:151). There can be little doubt that, as in other Asian countries such as Thailand and China, high female labour force participation

rates in Vietnam have in turn been an important reason for the continuing decline in fertility.

In spite of Vietnam’s good overall educational performance relative to other low- income countries in Asia, existing levels of educational attainment are inadequate and Vietnamese authorities have stressed the gap between Vietnam and countries such as Thailand, Malaysia, the Philippines and China (Vu Binh Chu 1991:95). The UNDP report (1990:208) stressed that, since the early 1980s, enrolments in the 6-11 age group have been falling and in 1986/87 were around 70 per cent of children in that age cohort. Dropout rates have increased, especially in the secondary schools. Part of the reason for the higher dropouts may be that, with much greater scope for private enterprise in both urban and mral areas, parents need their children’s labour in family enterprises. In addition, curriculum content is considered too influenced by Confucian and French models and insufficiently oriented to the requirements of the labour market. But, in spite of increasing dropouts, the government is unable to meet the growing demand for secondary education, especially in the cities, and some private schools have been permitted to open (UNDP 1990209; Hiebert 1991b). Places at universities and vocational institutes are also inadequate to meet demand and quality is poor, even by standards prevailing in other parts of Southeast Asia. At all levels, salaries are so low that teachers are forced to take second jobs, and recent reports indicate recruitment is becoming more difficult to a profession that historically has commanded considerable prestige in Vietnam.

Further reforms in the trade regime and in foreign economic policy

Although the area of foreign economic policy is one where Vietnam has made considerable progress since 1986, recent analyses stress that much more must be done before the country can achieve the same success in export-led growth as economies such as Korea, Taiwan, Thailand and Malaysia (Dollar 1991:132). The dong has been allowed to float since 1989,




but little progress was made towards establishing a formal foreign exchange market until 1991 (Hiebert 1992). Although the floating of the dong was accompanied by substantial trade liberalization, reports abound of the complex maze of bureaucratic restrictions on both internal and external trade which business people must deal with. Quantitative controls on exports and imports are still widely used; predictably, officials from the IMF and other international agencies are calling for their replacement by tariffs in the 10 to 20 per cent range (Dollar 1991:135). We have already referred to the growing literature cataloguing the problems faced by foreign investors; in spite of what appears to be a very liberal law on paper, many investors find that they are subjected to high rates of ’informal taxation’ through, for example, the labour hiring regulations which compel them to pay inflated wages to workers, most of which are then retained by the government.

With the break-up of the USSR and the ongoing problems of economic restructuring everywhere in the CMEA, it is unlikely that this organization will be able to provide any further economic or technical assistance to Vietnam in the near future. This is causing the Vietnamese government to forge new economic links with its Southeast Asian neighbours; a desire to join MEAN has already been expressed, and it is likely that Vietnam will become an associate member within the next few years. However, Vietnam’s most pressing need is for long-term development finance on a scale that can be provided only by the multilateral lending agencies. Access to loans from both the World Bank and the Asian Development Bank is currently vetoed by the USA, although this may change after the 1992 election. The UNDP report (1990:235) pointed out that the system of aid management which developed in Vietnam over the past hfteen years will have to be modified as sources and terms of development finance become more diversified; in particular, there is a need for one central agency which has overall responsibility for aid issues and which can provide a focal point for aid donors.

Further reforms in fiscal and monetary policy As in the case of reforms in the foreign trade regime, a number of recent writers have stressed that, in spite of the progress of the last five years, much remains to be done to impose tighter monetary and fiscal discipline and to develop the financial system. After the initial financial liberalization, interest rates were not raised in step with inflation, and this led to a slowdown in deposit growth in the banking sector in 1990; banking services generally are still grossly inadequate, with a poor branch network even in urban areas and a virtual absence of any effective rural credit institutions (Drabek 1991:263-5). In 1990 many of the private credit co-operatives that the government had encouraged as an alternative to the formal banking system collapsed as a result of bad management and in some cases outright fraud. It was estimated that their collapse bankrupted more than 2000 small enterprises; certainly public confidence in the financial system was severely shaken and many people withdrew their deposits to buy gold (de Vylder 1990:254). The authorities realized that much tighter regulation and supervision of the financial system would be essential but implementing such control whde at the same time encouraging the banks to become more innovative and entrepreneurial will be extremely difficult. The current weakness of the banking system is exemplified by the large number of bad debts in their loan portfolios, many of which are to inefficient state enterprises; as Drabek (1991:164-5) has pointed out these bad debts would make it very difficult to assess the real worth of the banks if they were ever to be privatized.

Obviously the continuing policy of subsidizing inefficient state enterprises through ’loans’ from the banking system is one source of inflationary pressure, but the inflation problem continues to be exacerbated by large budgetary deficits. These in turn are the result of an archaic and inefficient tax system on the one hand, and an inability to control expenditures on the other. Many commentators have stressed the problems with the tax system;


direct taxation has concentrated h o s t scclusively on state enterprises and ‘the few economically successful companies thus see their profits being siphoned off, whch is likely to act as a powerful disincentive‘ (de Vylder 1990:24). Indirect taxation has relied on a ’highly rigid and inefficient turnover tax and customs duties’ (Drabek 1991:165). Tax administration is erratic and often arbitrary; for example, ’retroactive and then often prohibitive taxation of private or family businesses has not been uncommon’ (Ronnas and Sjoberg 1991:13). Both the IMF and bilateral donors (Sweden and Finland) are giving technical assistance on improving the taxation system but, given the magnitude of the problem, reform will clearly take time. On the expenditure side of the budget, a major problem is the continuing high proportion of non- discretionary expenditure commitments to both the military and civilian bureaucracies; as Drabek (1991:166) has argued, these are very large for a country at Vietnam’s level of development and make it extremely difficult to achieve much flexibility in budgetary policy.

Sequencing economic reforms

Several writers have stressed that, at least compartd with Eastern Europe, the former USSR, and a number of countries in Africa and Latin America, the process of economic reform in Vietnam has been quite successful (de Vylder 1990:38; Ronnas and Sjoberg 1991:15). De Vylder has pointed out that the package of economic reform did not begin with a drastic and unpopular austerity program involving the sudden and rapid increase in the price of staples. ’Rather, the necessary attacks on macro-imbalances and price distortions were only launched when the reform process was advanced enough to make prices matter, and to permit the links between macro-policies and micro-responses to work reasonably well’ (de Vylder 1990:39). In addition, de Vylder argues that the indigenous nature of the Doi Moi process and the fact that it has not been imposed by foreign aid donors or the IMF give it a high degree of legitimacy in the eyes of Vietnamese, although the IMF and other multilateral agencies have been

The region around Ho Chi Minh City will rapidly develop into a major export

centre for 60th agricultural and manufactured goods, and will also

attract the modern financial and other services necessary to support

export-led gro wth.

closely involved in the reform program and have made it clear that further reforms are a pre-condition for Vietnam’s reintegration into the international economic system.

Yet, as in many other countries attempting basic structural adjustment, the implementation of sweeping financial liberalization when the real economy was still subject to many controls and public enterprises still heavily subsidized has led to considerable problems. At the very least the continuing budgetary deficits will have to be curtailed before further financial reform can be implemented; in addition, stricter regulatory institutions and a legal framework more supportive of private enterprises will be required (de Vylder 1990:40; Drabek 1991:170). As Brabant (1991213) has pointed out, in the pervasive climate of uncertainty created by fiscal indiscipline, ‘a vibrant market-based economy is not viable’.

Emerging disparities in income and living standards

During the 1980s it became increasingly obvious that the economy of what was South Vietnam remained very different from that of the north. These differences reflect both different historical patterns of development, and the impact of twenty years of separate development under the American-backed regimes which held power between 1955 and 1975. Beresford (1991:130) has pointed out that, even in 1980, an estimated 29 per cent of industrial workers in Ho Chi Minh City were employed in the private sector, and that proportion has certainly increased over the past decade. The city has also attracted much of the



foreign investment that has flowed in over the past three years, especially in manufacturing. As most overseas Vietnamese originated from the south, it is likely that investment from this source will also flow into Ho Chi Minh City and the surrounding region. In addition, of course, there is a considerable Chinese minority in the south who are participating actively in the current increase in private sector initiatives (Tran Khanh 1991). Thus the probability is that the region around Ho Chi Minh City will rapidly develop into a major export centre for both agricultural and manufactured goods, and will also attract the modern financial and other services necessary to support export-led growth. The north, by contrast, where much of the inefficient state industry is located and where agriculture is more oriented to immediate consumption needs, is unlikely to become a major export region and can thus be expected to grow less rapidly.

It is difficult to predict what effect these trends are likely to have on national unity, but in the medium term there could, at the very least, be greater demands for regional auton- omy. This is particularly likely to be the case if the central government attempts to cream off a high proportion of the profits from export-led growth via high direct and indirect taxes, and then spends the revenues in other parts of the country. In that case the potential for both regional and ethnic disaffection could be considerable.

Strengthening the private sector and property rights

In marked contrast to the late 1970s when a very limited reform process was initiated, the Vietnamese authorities had by the late 1980s decided to permit the private sector a much greater role in the economy. But having made that major break with Communist orthodoxy, they were faced with the problem of drafting an entirely new legal code, not just to guarantee private property rights but also to enforce contracts and punish fraudulent conduct. Not surprisingly, given the magnitude of the task, progress has been slow and many ambiguities remain. It is argued, for example, that the

privatization of state enterprises in Vietnam is legally impossible because property rights in state enterprises are vested in workers' councils. Some writers have argued that radical measures may be necessary to solve such problems; Brabant (1991:224) suggests that 'it may be necessary to renationalize all state-owned assets at once' and then turn them into independent corporations as quickly as circumstances allow.

Underlying the problem of fashioning new laws to support a rapidly growing private sector is the more basic issue of how officials in Vietnam regard the role of law in society. As Fforde (1986:68) has argued, a wide gap separates orthodox Western concepts of the social role of law and conditions for legality from the concepts behind the 'Vietnamese Socialist Revolution'. Vietnamese official thinking emphasizes the position of the state rather than the role of law, and indeed the concept of a legal system as an autonomous entity apart from the state is one that many Vietnamese reject. Given this viewpoint, it will clearly be difficult for Vietnamese officials to administer legal codes governing, for example, commercial contracts between private companies and official entities, without appearing to be biased against the private party. Once again, this is not a problem unique to Vietnam, but is shared by many developing countries with strong statist inclinations. Its resolution will not be easy, especially given the strongly authoritarian nature of the Vietnamese state, and the absence of any trend towards political liberalization.

Economic reform and political liberalization This brings us to a final question which has been raised recently by numerous foreign commentators. Can economic renovation succeed in Vietnam unless it is accompanied by a far greater measure of political liberalization than the Communist Party leadership has been prepared to concede up till now? Summarizing the six fundamental limits to the renovation policy, the party's newspaper wrote in early 1989 as follows:



These six [limits] are: . . . assertion of the Socialist Goal, of loyalty to Marxism-Leninism, of Proletarian Dictatorship, of the CPV’s leadership, of Socialist Democracy, and the combination of patriotism with proletarian and socialist internationalism . . . All renovations must comply with and must not go beyond these fundamental [limits1F8 Regarding the ‘Socialist Goal’, the

communique of the sixth plenum asserted: ‘Renovation does not mean changing the goal of socialism; it means ensuring the effective reaiization of that goal through the adoption of.. . [new] steps and measures’.2y In 1990, the then Premier Do Muoi again emphasized in one of his speeches that ‘renovation [is carried out] in order to build up socialism more effectively, not to renounce socialism . . . ’.30 In mid-1991 Do Muoi became Party Secretary and there is no evidence that his thinking has changed (Hiebert 1991d:lO). Indeed, some commentators have argued that the fundamental changes sweeping Europe and the former Soviet Union will make the Vietnamese leadership even less willing to entertain any political liberalization (Pike 1991:79-80). As in China, the CPV appears determined to pursue perestroika in the economic sphere, while making no concessions towards glusnosf in the political sphere. But, at the same time, several foreign observers have argued that radical reform of the economy will be impossible to achieve without a large measure of political reform, including the adoption of a multi-party system (Yevstigneyev 1990:74-5; Chesneaux 1990; Vo Nhan Tri 1990b).

The Vietnamese leadership apparently expect that they will be treated by the international community much as China has been treated, even after the savage repression

It seems very unlikely that, in the current international climate, the OECD countries will be prepared to give large amounts of concessional development aid to a regime whose leadership still proclaims itself to be Marxist-Leninist

in its fundamental tenets. And the consensus of informed opinion is that,

without such aid, the Vietnamese economy cannot make much progress.

of political dissent in that country in June 1989. They hope that foreign investors, multilateral and bilateral aid agencies, and the international banking community will be guided purely by economic assessments, rather than by any concern about political pluralism or human rights. The problem with this reasoning is that foreign economic assessments must be affected to some extent by the ideological stance of the regime. It seems very unlikely that, in the current international climate, the OECD countries will be prepared to give large amounts of concessional development aid to a regime whose leadership still proclaims itself to be Marxist-Leninist in its fundamental tenets. And the consensus of informed opinion is that, without such aid, the Vietnamese economy cannot make much progress. As Pike (1991:79) has argued, the fundamental policy dilemma for the Vietnamese leadership is ’how to give the people a prosperous life without significantly altering the Leninist political construct achieved at such a high price in blood, treasure, and wartime sacrifice’. How this dilemma will be resolved remains to be seen.

28 N h u ~ Dun, 1 April 1989. 29 Nhan Dun, 31 March 1989. 30 V N A , 1458 gmt, 1 September 1990



References ~

Asian Development Bank. 1991. Asian Development Outlook 1991, Asian Development Bank, Manila.

Beresford, Melanie. 1989. National Unification and Economic Development in Vietnam, Macmillan, London. 1990. ’Vietnam: socialist agriculture in transition’, paper presented to the Asian Studies Association of Australia Conference, Griffith University, Brisbane, 2-5 July. 1991. ’The impact of economic reforms on the South’ in Forbes et al. (eds).

Bogatova, Y. 1988. ’Vietnam: the search for avenues to renovation’, Far Eastern Affairs, Moscow 6:3944. et al. 1990. ’Shock therapy’, Far Eastevn Affairs, Moscow, 63944.

Brabant, Jozef M. van. 1990. ’Reforming a socialist developing country-the case of Vietnam’, Economics of Planning 23:209-29. 1991. ’Comments’ in Ronnas and Sjoberg (eds).

Brezinski, Horst. 1990. ’Economic reforms in Asia and Europe and cooperation with the less developed centrally planned economies’, ]our na 1 of Development Planning, 20: 243-65.

Central Census Steering Committee. 1990. Vietnam Population Census 1989: Sanzple Results, Central Census Steering Committee, Hanoi.

Centre du Commerce Exterieur Franpis. 1989. ’La nouvelle loi Vietnamienne sur les investissements etrangers’, Cahiers Juridiques et Fiscaux de /’Exportation, 1.

nouvelle loi Vietnamienne sur les investissements etrangers’, in L’entreprise Mixte dans les Pays Socialistes, Approche Juridique, Direction de l’lnformation et l’lnformatique, Centre Franqais du Commerce Exterieur, 7 June.

Chan, Canice Chew-Ming and ODonnell, Sheila. 1988. ‘Vietnam’s foreign investment law’, ~ n ~ ~ r n a t i o n a l Finalcial Law Review, October.

Chanda, Nayan. 1989. ’Consumer crisis’, Far Eastern Economic Rmicw, 7 September:8&7.

Chesneaux, J. 1990. ’Vietnam, 0 Vietnam’, Quinzaine Litte‘raire, Paris, 1 August:560.

Cima, Ronald J. 1989. ’Vietnam’s economic reform: approaching the 1990s’, Asian Survey, August,

Chan, Canice Chew-Ming et Associes. 1989. ’La

29~786-99. Cohen, Jerome Alan. 1990. ’China’s influence on

Vietnam’s foreign business laws’, China Business Review, May-June:43-5.

Crosnier, M.A. and Lhomel, E. 1987. ‘Vietnam: les mecomptes d u n socialisme Asiatique’, Le Courier des Pays de I’Est, June-August 320:%3. 1990. ’A first assessment of the Vietnamese economic reforms’, paper presented at the IVth World Congress for Soviet and East European Studies, Harrogate, England, 21-6 July.

Crow, Suzanne. 1990. ‘Will the Moscow-Hanoi alliance survive aid and arms cutback?’, Report on the USSR, 45,9 November.

Dao Duy Tung. 1990. ’Vietnam’s renewal: initial successes and experience‘, Far Eastern Affairs, MOSCOW, 313-20.

de Vylder, Stefan. 1990. ’Towards a market economy? The current state of economic reform in Vietnam‘ Macroeconomic Studies, 16/90, Stockholm School of Economics, Department of International Economics and Geography.

Demaine, Henry. 1991. The Far East and Australasia 1991, Europa Publications, London.

Dollar, David. 1991. ‘Comments’ in Ronnas and Sjoberg (eds).

Drabek, Zdenek. 1991. ’Comments’ in Ronnas and Sjoberg (eds).

Ducos, P. et al. 1991. ’Une maquette de l’economie Vietnamienne de 1980-88’ Revue Economique, Pans, January 42(1):95-110.

Duiker, William J. 1985. Vietnam Since the Fall of Saigon, Monographs in International Studies, Southeast Asia Series, 56, Ohio University, Athens, Ohio. 1989. ’Vietnam: a revolution in transition’, Southeast Asian Affairs 1989, Institute of Southeast Asian Studies, Singapore. 1990. ’Vietnam: the challenge of reform’, Current History, April: 177780.

FAO. 1990. Production Yearbook, Food and Agricultural Organisation, Rome.

Fforde, Adam. 1986. ’The unimplementability of policy and the notion of law in Vietnamese communist thought’ Southeast Asian Journal of Social Science, 14(1):60-70. 1990. ’Major policy changes and socioeconomic development in Vietnam since mid-1988 in Ronnas and Sjoberg (eds). 1991. ’The successful commercialization of a neo-Stalinist economic system-Vietnam 1979-89 with a postscript’ in Forbes et al. (eds).

~~ and de Vylder, S. 1988. Vietnam: A n Economy in Transition, Swedish International Development Authority, Stockholm.



Forbes, Dean K. 1990. ’Recent aspects of urbanisation in Vietnam‘ in Demographic and Social Change in Vietnam, Briefing Paper 16, Australian Development Studies Network, July.

~ et al. (eds). 1991. Doi Moi: Vietnam’s Renovation Policy and Performance, I’oli tical and Social Change Monograph 14, Research School of Pacific Studies, Australian National University, Canberra.

Ouverture sur L‘Exthieur: Les Transformations du Commerce lnternatzonal du Vietnam, INRETS (Institut National de Recherche sur les Transports et leur Skcurite), Paris. 1991. ’Le commerce exterieur du Vietnam: des regimes distincts selon les trois principales zones d’echange’ in Fourniau, Jean-Michel (ed), Les Transports au Vietnam a 1’Heure de I’Ouverture €conomique, INRETS, Paris, September.

Funnell, Victor. 1989. ’We cannot live on theories: a changing Vietnam’, Asian Affairs, London, October 20(3):276-86.

Socialist Republic of Vietnam 1980. General Statistical Office, Hanoi.

General Statistical Office. 1990. Statistical Data of the Socialist Republic of Vietnam, 1976-89. General Statistical Office, Hanoi.

l’incertitude Indochinoise’, Problkmes Politiques et Sociaux (Serie Extrgme Orient), La Documentation Franqise, Paris, January

Fourniau, Jean-Michel. 1989. Marchi Socialiste et

~

General Statistical Office. 1981. Statistical Data of the

Hemery, D. 1991. ‘Vietnam, Laos, Cambodge:

NOS 64748:5-23,3647,89-91. Hemery, D. and Nguyen Duc Nhuan. 1989.

’L‘lndochine en ktat de fragile espkrance’, Le Monde Diplomatique, Paris, October 12-13.

Hiebert, Murray. 1990a. ‘The tilling fields’, F a y Eastern Economic Reviiw, 10 May:32-4. 1990b. ’Smugglers snared’, Far Eastern Economic Review, 29 November:51. 1990c. ’Hard times‘, Far Eastern Economic Review, 13 December:12-13. 1990d. ‘Yankee come back’, Far Eastern Economic Review, 24 May:72-3. 1991a. ’On the brink‘, Far Eastern Economic Review, 4 April:52.

~- 1991b. ’The dropout factor’, Far Eastern Economic Revii,w, 19 December:72-3.

- 1991~. ‘The rise of Saigon’, Far Eastern Economic Review, 5 September:624.

~-~ 1991d. ’More of the same’, Far Eastern Economic Review, 11 Ju1y:lGll. 1992. ’Out of the black’, Far Eastern Economic Review, 27 February:54.

Hull, Terry. 1990. ’The 1990 population census’ in Demographic and Social Change in Vietnam, Briefing Paper 16, Australian Development Studies Network, July.

transition?’ Southeast Asian Affairs 1990, Institute of Southeast Asian Studies, Singapore.

Kimura, Tetsusaburo. 1989. The Vietnamese Economy 1975-86: Reforms and lnterizational Relations, Institute of Developing Economies,Tokyo. 1990. ’Economic reform in Vietnam: coming to the crucial point’, paper presented at the Institute of Developing Economies Conference, Tokyo, 10-12 December.

Kornai, Janos. 1986. ’The soft budget constraint’, Kyklos, 39(1):3-30.

Lam Thanh Liem. 1987. ’Bilan de dix annees de rkforme kconomique, 1975-85’, Reflet dAs ie (Paris) 2 (March-June), 3 (July-August).

Le Dang Doanh. 1991. ’Economic renovation in Vietnam: achievements and prospects’ in Forbes et al. (eds).

Le Duc Thuy. 1990. ’Economic reform in Vietnam: content, achievement and prospect’, Paper presented at the Workshop on Economic Renovation in Vietnam, National Centre for SociaI Sciences, Hanoi, June 27-30.

Le Trang. 1990. ’Renewal of industrial management policy and organisation’ in Ronnas and Sjoberg (eds).

Le Van Cuong, Nguyen Van Quy and Pham Duong Hien. 1988. ’Un essai sur l’economie Vietnamienne depuis 1975’, Revue d’Etudes Comparatives Est-Ouest, 19(4):101-16.

Lecat, J . J. 1989. ’Les commentaires sur le nouveau cadre juridique des relations daffaires avec le Vietnam’, Cahiers Inridiques et Fiscaux de I’Exportation, 1 (Centre du Commerce Extkrieur Franqais).

etrangers au service du developpement kconomique et de la cooperation’, Revue Internationale de Droit Contemporain, 2:81-6.

Ma, Zongshi. 1988. ’Perestroika in Vietnam: a balance sheet’, Indochina Report, Singapore, October-December, 17:1-8.

Marr, David G. and White, Christine P. 1988. (eds), Postwar Vietnam: Dilemmas in Socialist Development, Cornell Southeast Asia Program, Ithaca.

a period of trial and error and the present situation‘ in Mio, Tadashi (ed.), Indo-China Transition: Confrontation or Co-prosperity, Japan Institute of International Affairs.

Kim Ninh. 1990. ’Vietnam: renovation in

Luu Van Dat. 1988. ’La loi sur les investissements

Mio, Tadashi. 1989. ’Vietnamese economic reforms:



Nguyen Huu Dong. 1990. ’China, Vietnam: chronicle of announced reforms’, Journal of Development Planning 20:130-7.

Nguyen Van Huy. 1990. ’Renewal of economic policies and economic management organisation in Vietnam’ in Ronnas and Sjoberg (eds).

June.

transcripts from the final session’ in Ronnas and Sjoberg (eds).

Office of the State Committee for Cooperation and Investment. 1990. Legal Writings on Foreign Investment in Vietnam, Office of the State Committee for Cooperation and Investment, Hanoi, Socialist Republic of Vietnam.

Phan Quang Tue. 1990. ’Foreign investment policy in Vietnam’ in Ronnas and Sjoberg (eds).

Pike, Douglas. 1990. ’Change and continuity in Vietnam’, Current History, March 11 7-20.

Asian Survey, 31(1), January:79-86.

Vietnam’, Problems of Communism, May-June:72-88. (forthcoming), Vietnam: the politics of bureaucratic socialism, Cornell University Press, Ithaca.

Reymondon, Florence. 1991. lnvestir au Vietnam, Editions UHarmattan.

Ronnas, Per and Sjoberg, Orjan. 1991. ’Economic reform in Vietnam: dismantling the centrally planned economy’, journal of Communist Studips, 7(1):7-19.

Agenda for the 199Os, Swedish International Development Authority, Stockholm.

Spoor, Max. 1988, ’Reforming state finances in post-1975 Vietnam’, Iournal of Dewloprnent

Stern, Lewis M. 1988. Conflict and Transition in the

Nguyen Van Linh. 1987. ’Interview’ in L‘Unita, 21

Nove, Alec. 1990. ’In lieu of a conclusion:

~ 1991. ’Vietnam in 1990: the last picture show‘,

Porter, G. 1990. ’The politics of renovation in

~~ (eds). Socia-economic Development in Vietnam: The

StudicJs 24(4):102-14.

Vietnamese Economic Reform Program, ISIS Paper 3, Institute of Security and International Studies, Chulalongkorn University, Bangkok.

1990‘, Southeast Asian Affairs 1991, Institute of Southeast Asian Studies, Singapore.

Tan, Kee Wee. 1991. ’Vietnam at the Crossroads in

Tauriac, Michel. 1990. ’Vietnam: reformer ou perir’ Politique Internationale, (Paris), 48:187-97.

Tran Khanh. 1991. ’The role of the Chinese in Vietnam’s economy’, Sojourn 6(1):126-39.

Trigubenko, Marina. 1991. ‘The USSR and the friendly countries of Asia’, Far Eastern Affairs,

UNDP. 1990. Report on the Economy of Vietnam, State 11120-37.

Planning Committee and United Nations Development Program, Hanoi. 1991. Human Development Report 1991, Oxford University Press, New York.

van Arkadie, Brian. 1991. ’Comments’ in Ronnas and Sjoberg teds).

Vo Dai Luoc. 1990. ’Fighting inflation in Vietnam‘, Paper presented at the Workshop on Economic Renovation in Vietnam, National Centre for Social Sciences, Hanoi, June 27-30.

1975-85: An Assessment, Institute of Developing Economies, Tokyo.

~~ 1988. ‘Vietnam in 1987: a wind of “renovation“‘, Southeast Asian Affairs 1988, Institute of Southeast Asian Studies, Singapore. 1990a. Vietnam‘s Economic Policy Since 1975, Institute of Southeast Asian Studies, Singapore. 1990b. ‘La difficile renovation’, Sudestasie, (Paris), 62. 1991. ’Some remarks about the political and social aspects of “renovation” in Forbes et al. (eds).

Vo Tong Xuan and Timmer, Peter. 1990. ‘A food policy for Vietnam’, Development Discussion Paper 351 AFP, Harvard Institute for International Development, Harvard University.

Vu Binh Chu. 1991. ‘Vietnam‘s education and training policy’ in Ronnas and Sjoberg (eds).

Vu Qui Nhan. 1991. ‘Fertility and family planning in Vietnam: levels, trends and challenges’, in Forbes et al. (eds).

Wood, Adrian. 1989. ‘Deceleration of inflation with acceleration of price reform: Vietnam’s remarkable recent experience’, Cambridge Journal of Economics, 13(4):563-71.

World Bank. 1991. World Development Report 1991, Oxford University Press, New York.

Yevstigneyev, Ruben. 1990. ‘Comments’ in Ronnas and Sjoberg (eds).

Vo Nhan Tri. 1987. Socialist Vietnam’s Economy,


Recent Economic Developments in Vietnam

Documents

Transcript of Recent Economic Developments in Vietnam