Globalization in Vietnam: Economic Reform and Integration

Introduction and Historical Context

The victory of communist forces in Vietnam in April 1975 ranks as one of the most politically significant occurrences of the post-World War II era in Asia. The achievement was even more remarkable for having been accomplished in the face of determined United States opposition and for having challenged the very policy of containing communism. This occurrence marks a turning point not only in political but also economic facets of Vietnam. Although the communist government attempted to pursue an isolationist approach to economics, it has continually shifted toward an economically integrated market on the global stage.

The events of April 1975 prepared the way for the official reunification of North and South in 1976, some three decades after Ho Chi Minh first proclaimed Vietnam's independence under one government in September 1945 and more than a century after France divided Vietnam to rule its regions separately. Reunification represented the long-established objective of Ho Chi Minh's nationalist and anticolonialist predecessors, who had resisted Chinese rule for 1,000 years and French domination for a century. Vietnam's unrelenting resistance to foreign intervention remains a dominant theme in its history, visible in the repeated waging of dau tranh, or struggle to gain a long-term objective through total effort and motivated by chinh nghia, or just cause. Vietnam's communist leaders claim that every Vietnamese has been a soldier in this struggle.

Ironically, Vietnam's fierce determination to remain free of foreign domination has often been combined with an equally strong willingness to accept foreign influence. Historically, the pattern has been to adopt foreign ideas adapted to indigenous conditions whenever they applied. This set the stage for global efforts in balancing a country between public and private control over its economy.

In the 1980s, Vietnam ranked third in population—60 million—and first in population density—an average of 182 persons per square kilometer—among the world's communist nations. A 2 percent annual population growth rate and uneven population distribution adversely affected resource allocation, workforce composition, and land use. Population projections indicated a population of 80 million by the year 2000 if the growth rate remained unchanged. The Fourth National Party Congress in December 1976 stressed the need to curtail the population growth rate and introduced a plan to relocate 54 million people to 1 million hectares of previously uncultivated land, organized into "new economic zones," by the mid-1990s. As of 1988, however, progress toward the plan's fulfillment was considerably behind schedule.

Economic development prospects in Vietnam for the 1980s and 1990s were tied to party economic policy in critical ways. Party leaders, in establishing economic policy at the Fourth National Party Congress, envisioned Vietnam's post-reunification economy as being in a "period of transition to socialism." The plan, or series of plans, called for the economy to evolve through three phases. The first, outlining the objectives of the Second Five-Year Plan (1976–80), set extremely high goals for industrial and agricultural production while also prioritizing construction, reconstruction, and the integration of North and South. The second, entitled "socialist industrialization," was divided into two stages—from 1981 to 1990 and from 1991 to 2005. During these stages, the material and technical foundations of communism were to be constructed, and development plans were to focus equally on agriculture and industry. The third and final phase, covering the years from 2006 to 2010, was set aside to "perfect the transitional period."