Vietnam

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Vietnam

• Transition from Socialism and Awakening Capitalism

2

• Over 82 million people but only 25 percent urban
• Population clusters in Mekong delta and Red River
  Valley
• Ruled by China 1000 years
• Conquest of Vietnam by France began in 1858 and
  was completed by 1884.
• Declared independence from France in 1945
  culminating victory in Dien Bien Phu in 1954
• Viet invasion of Cambodia 1978-79 brought
  isolation- dependence on Soviet Union
• One of few surviving Leninist states

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People
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Structure of the Economy

• Poor, densely-populated country forced to recover
  from war, the loss of financial support from the
  old Soviet Bloc, and the rigidities of a
  centrally-planned economy
• 1997 Asian financial crisis highlighted problems
  but rather than reform, reaffirmed the
  government's belief that shifting to a
  market-oriented economy would lead to disaster.
  GDP growth of 8.5 in 1997 fell to 6 in 1998 and
  5 in 1999.
• New leadership in 2001, Vietnamese have
  reaffirmed commitment to economic
  liberalization, implement structural reforms
  needed to modernize the economy and to produce
  more competitive, export-driven industries.

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Structure of the Economy

• Agriculture 1994- 67 2004- 24
• Industry 1994-12 2004- 37
• Services 1994- 21 2004- 39

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Agrarian Economy Gradually Transitions to Industry
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Hanoi

• Situated in the Red River Valley at confluence of
  three rivers-easily defended
• Fertile soil for rice cultivation basis of food
  regime
• Captured by Han dynasty and endured 1000 years of
  Chinese rule
• 11th Century after Viet independence Thang Long
  capital and political focus
• But also commercial and manufacturing hub with
  Red River outlet to South China Sea
• Repeated Chinese incursions but in 1428 Chinese
  were pushed out
• Viet Nam rapidly expanded south to the Mekong
  delta and to the Gulf of Siam
• Thang Long (Hanoi) took on character of an
  imperial city on the Chinese model

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Hanoi

• But by 17th C Le dynasty power declined- noble
  families NS dominated
• Expanses of cultivable land and climate more
  favorable to agriculture, South took on new
  character
• Northern provinces highly traditional and inward
  looking- focus on wet rice
• South with many tropical products became linked
  to major trade network to China, Japan and Korea
• South became less traditional , more
  entrepreneurial, more prosperous and more in
  touch with outside
• Cultural split between the two regions became
  intensified and eventually would have impact
  during colonial and Cold War eras

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HanoiBuddhist Temple and Opera
House
10
Hanoi
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Old Quarter- 36 Streets

• French colonists filled in the canals to create a
  network of 36 narrow streets that quickly
  acquired the name of the commodity traded there.
• Bat Dan Wooden Bowls
• Bat Su China Bowls
• Cha Ca Roasted Fish
• Chan Cam String Instruments
• Cho GaoRice Market
• Hang Bac Silversmiths
• Hang Bong Cotton
• Hang But Brushes

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Ho Chi Minh City-aka Saigon

• Economic heart of Viet Nam 1980gt 3.4 mil 2003gt
  5.7 mil
• Entrepreneurial dynamism
• French colonial architecture combined with new
  skyscrapers
• Main locus for foreign investment

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Economic Reform or RenovationDoi Moi

• Dismantling of economic communes or collectives
• Reallocation of land use for family farms
• Opening country to foreign direct investment-
  recognize value of market mechanism
• Reform of banking sector
• Establish real interest ratesgtgtgtSavings
• Direct subsidies to State Owned Enterprises
  (SOEs) ended

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Development Strategies and Problems

• Since 1987 New Economic Zones established to
  redirect and resettle migrants to rural areas
  from cities- land in highlands- limited success
• Unprofitable state enterprises cut loose- no
  longer restricted by govt set prices and quotas
• Encourage foreign capital and investment
• Encouragement of entrepreneurship allowing
  private business to operate
• Mekong River Commission designed to support
  joint activities among Indochinese states-
  harnessing river for power, navigation, flood
  control, fishing and tourism
• Greater Mekong Sub region- infrastructure
  improvements needed to integrate several economies