Vietnam: Better Managing Reform

Summary

Nineteen ninety-five was an eventful year for Vietnam, as the country marked the twentieth anniversary of its reunification, the fiftieth anniversary of Ho Chi Minh's declaration of independence, and the sixty-fifth anniversaries of the founding of the Communist Party of Vietnam and the Vietnam Fatherland Front. It was also the year that Hanoi finally “normalized” its relations with Washington, and gained full membership status in the Association of Southeast Asian Nations (ASEAN). But with these anniversaries now passed, and greatly improved external relations firmly secured, government attention has shifted back towards domestic issues, and the need to look ahead. Having laid the broad foundations of economic reform in Vietnam — which will be a decade old in 1996 — and begun to see relatively consistent performance results, better managing the reform process has become Hanoi's primary task. In anticipation of the Eighth Party Congress, provisionally scheduled for mid-1996, Vietnam's leaders have been debating the appropriate pace and parameters of doimoi (renovation), the results of which should become evident in the impending 1996–2000 Five-Year Plan.

Whilst few observers question the commendable success of the economic reform programme — pursued fairly vigorously since 1986, resulting in greatly improved economic growth figures — there is a perceived desire to take the process further, although the Party wishes to see reform remain contained within fairly fixed socio-political limits. With the gross economic inefficiencies endured under the centrally planned system now largely (although not wholly) removed, the government realizes it must enact new initiatives that will generate new growth if the reform process is not to become mired at its current stage. And there is little room for complacency, with the perils of excessive bureaucracy and corruption, a worrisome budget and current account deficit, new-found inflationary pressure, widening disparities in income, and numerous other adverse factors, potentially able to stall — if not actually derail — the current reform programme.