Vietnam in a Changing World

Norlund, Irene, Carolyn L. Gates and Vu Cao Dam, (eds.). Vietnam in a Changing World. Nordic Institute of Asian Studies, Studies in Asian Topics. No. 17. Richmond, Surrey, England: Curzon Press, 1995. 291 pp.

In 1986 the Vietnamese Communist Party and state leadership cast off traditional socialist doctrine and acknowledged the market as an allocator of resources. In 1989 members of the Institute of Science Management in Hanoi and the Nordic Institute of Asian Studies in Copenhagen agreed to work on a book examining the consequences of that momentous decision. In developing this book they held several meetings in Hanoi and Copenhagen. The dates of these meetings are not clear, and it is also not clear how much updating the book has received between 1989 and 1995; some articles have information dated as recently as 1993 but many may not be up to date. Nevertheless, many articles are quite useful.

In contrast to the chaos of economic transformation in the former Soviet Union and East European countries economic reform in Vietnam has concentrated on maintaining political stability. Although the government recognized market forces and called for reforms as early as 1979, it was only in 1986 that significant changes take place in decentralizing, deconcentrating, and deregulation the economy. The 1990s saw deepening contradictions between Vietnam's developing market economy and the traditional state concern for social equality and welfare, though there appears to be a consensus that reforms must go forward. Clearly one advantage is that Vietnam has not had to deal with the difficult demands of the International Monetary Fund and the World Bank but is instead carrying out an indigenous program that seems relatively popular with most segments of Vietnamese society.

Discussing key issues of the reform, this book presents both insider and outsider views.

In "Economic Policy Reforms: An Introductory Overview" Vu Tuan Anh, a senior researcher at the Institute of Economics, National Centre for Social Sciences and Humanities in Hanoi, points out that after unification in 1975 Vietnam faced the problem of integrating "a Soviet-inspired centrallyplanned model in the north" with "a quasi-colonial economy highly dependent on US assistance in the south" (p. 17). He emphasizes the inefficiency of Vietnam's economy before the initiation of reform. His complaint is that the Vietnamese entrepreneurs tend to invest in trade and services rather than in manufacturing and production, though he concludes that "Vietnam's economy has changed for the better," (p. 30) and he is optimistic about Vietnam's future growth.

Stefan de Vylder, a Swedish Economist, focuses on latest developments as contrasted with the command economy (or, in official terms, the "centralized bureaucratic system") in place before 1986 in "State and Market in Vietnam: Issues for an Economy in Transition." He concludes that the reforms have been successful largely because the government did not start with a drastic price reform but instead took a step by step approach. Many reforms were similar to those advocated by the World Bank and the IMF but were domestically rooted and had significant groundwork laid. "To the great surprise of many Vietnamese and foreign observers, the Vietnamese dong has turned out to be one of the strongest currencies in the world" (p. 31). He is somewhat pessimistic about the future writing that there are increasing political tensions and insufficient economic interactions with the rest of the world.

In "Monetary Stabilization: The Vietnamese Experience" Vo Dai Luoc, Director of the Institute of World Economics, National Centre for Social Sciences and Humanities in Hanoi, concentrates on the manipulation of interest rates in the pivotal financial events of 1988 and 1989 in controlling inflation in Vietnam. Luoc views inflation as the greatest current threat to the Vietnamese economy and writes, "Vietnam's counter-inflationary measures have not permanently curbed inflation" (p. 83).

Gates and David Truong in "Development Strategy and Trade and Investment Policies for Structural Change in Vietnam" examine how Vietnam has transformed itself toward integration into a world economy but warn that Vietnam still has a weak institutional framework. Economists at the Foundation for Indochinese Studies, Faculty of Economics and Econometrics, University of Amsterdam, they urge that policies be "flexible, adaptable, transparent and realistic" (p. 104).

In "Agricultural Reform in Vietnam Since the 1980s" Le Cao Doan, a research analyst at the Institute of Economics, National Centre for Social Sciences and Humanities in Hanoi, suggests that real development must start from changes in the agricultural sector, though this article seems to be largely outdated because of recent laws passed in Vietnam that change the relationship between peasants and land.

An economic historian working as a senior research fellow at the Nordic Institute of Asian Studies in Copenhagen, Norlund in "Vietnamese Industry in Transition Changes in the Textile Sector" chronicles the fluctuations of the textile industry illustrate the differential impact of policies on public and private sectors.