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Unit 5 - Text 2

This document summarizes the history and development of Vietnam's economy. It describes how Vietnam transitioned from a predominantly agricultural economy under Chinese and French colonial rule to developing industrial and commercial sectors. After the Vietnam War, North Vietnam established a centrally planned economy while South Vietnam maintained a free market system. Following reunification in 1976, Vietnam gradually transitioned to a centrally planned economy across the country. In 1986, Vietnam launched economic reforms to develop a more market-based mixed economy with greater private sector involvement. As a result, Vietnam experienced rapid economic growth and development in the following decades, becoming one of the fastest growing economies in the world by the early 2000s.

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52 views

Unit 5 - Text 2

This document summarizes the history and development of Vietnam's economy. It describes how Vietnam transitioned from a predominantly agricultural economy under Chinese and French colonial rule to developing industrial and commercial sectors. After the Vietnam War, North Vietnam established a centrally planned economy while South Vietnam maintained a free market system. Following reunification in 1976, Vietnam gradually transitioned to a centrally planned economy across the country. In 1986, Vietnam launched economic reforms to develop a more market-based mixed economy with greater private sector involvement. As a result, Vietnam experienced rapid economic growth and development in the following decades, becoming one of the fastest growing economies in the world by the early 2000s.

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Ngọc Phương Linh Lê
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During the centuries of Trong suốt những thế kỷ bị


Chinese and Vietnamese Trung Quốc đô hộ, xã hội
imperial rule, Vietnam’s Viêt
society was predominantly
agraian. Its major source of
wealth was rice. Although
some manufacturing and
trade existed, they received
little official
encouragemenr and
occupied minor segments
of the gross domestic
product (GDP). Under
French colonial rule,
agriculture continued to
occupy the primary place
in the national economy,
although emphasis shifted
to the cultivation of export
crops. In addition to rice,
these crops included
coffee, tea, rubber, and
other tropical products.
Small industrial and
commercial sectors
developed, notably in the
major cities, but their
growth was limited because
colonial officials were
determined to avoid
competition with goods
produced in France
After partition in1954 the
goverments of the North
and South Vietnam sought
to develop their national
economies, although they
established different
economic systems with
different resources and
trading partners. The
Norrth operated under a
highly centralized, planned
economy, whereas the
South mostly maintained a
free-market system that had
some government
invlovement. After
reunification in 1976 the
North gradually extended
its centrally planned
ecinomy throughout the
country. In 1986, however,
the government launched a
reform program to move
toward a mixed economy
that operates under private
as well as collective or
state control. As a result,
Vietnam entered a period
of rapid development. By
2006 GDP had risen to $61
billion, increasing at an
annual rate of 8.e percent
in the 1990s. However, per
capita incomes remained
low, averaging about
$725.30 a year. The
services sector contributed
38 percent of GDP;
industry, 42 percent; and
agriculture, forestry, and
fishing, 20 percent.
A. Government Role in the
Economy
In Vietnam, as in other
states ruled by Communist
parties, the government is
expected to play a guiding
role in all matters,
including the national
economy. Classical Marxist
economic theory calls for
all major industries and
utilities to be nationalized
and for farmland to be
placed under state or
collective ownership.
Such was the situation in
North Vietnam during the
Vietnam War and initially
in the reunified country
established in 1976.
However, Vietnam’s
economy performed
diastrously in the first
decade after war. Excessive
government controls, lack
of maagerial experience,
limited capital resources,
and the absence of a profit
incentive all contributed to
the weak economy. In 1986
the government launched a
reform program called doi
moi (economic renovation)
to reduce government
interference in the
economy and develop a
market-based approach to
increase national
productivity.
The need for economic
reform gained urgency in
1990, when poor haverts
and economic
mismanagement left
millions of Vietnamese
facing malnutrition.
However, Vietnamese
leaders initially
encountered many
difficulties in their effort to
renovate the system.
Among those obstacles was
the reluctance of party
leaders to further privatize
the economy as well as a
high level of bureaucractic
interference in economic
affairs.
The pace of economic
reforms accelerated
following the Communist
party’s approval in 2001 of
a ten-year development
strategy enhancing the role
of the private sector. The
strategy simultaneously
affirmed the primary of the
state in driving economic
development, and
Vietnam’s economy came
to be characterized as “a
market economy with
socialist orientation.”
In the second decade of the
doi moi reforms, Vietnam
achieved one of the fastest-
growing economies in the
world. Annual growth rates
exceeding 7 percent ranked
Vietnam second only to
China. The country’s
economic vitality attracted
surging levels of foreign
investment and
significantly decreased the
number of Vietnamese
infrastructure, a crucial
step in making Vietnamese
businesses competitive
against foreign
competition.
Vietnam sought to increase
foreign trade and
investment through
membership in the World
Trade Organization
(WTO). Following more
than a decade

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