Vietnam's Socioeconomic Development Leaps and Bounces over Past 60 Years

Sustainable economic development, improved living standards of people, and higher status in the international arena are considered most remarkable achievements of Vietnam in the 60-year period of national construction and development starting in 1945 when the Democratic Republic of Vietnam (now the Socialist Republic of Vietnam) was established. 

 

The “doi moi” (renewal) process initiated by the Communist Party of Vietnam in 1986 is a springboard for the country to jump out of the socioeconomic crisis prior to the year, creating stability in macro-economy, politics and social life. Economic sectors’ structure has changed in a positive manner, which has put into play potentials of all industries, regions and economic stakeholders. The proportion of the industry, construction and service sectors in the local economy has increased rapidly, with impressive growth rates of the steel, cement, coal, oil and gas industries. Agriculture, forestry and fishery have intensively developed with positive changes in structure and crop. Economic zones have utilised their comparative advantages as well as joined hands with one another in sustainable development. Vietnam’s three key economic zones account for more than 60 per cent of the country’s Gross Domestic Product (GDP).

 

Between 1991 and 1995, GDP annually grew, on average, by 8.2 per cent. Despite being badly affected by the Asian financial crisis in 1997, Vietnam posted GDP growth of 7 per cent in the 1995-2000 period. The growth in 2001, 2002, 2003 and 2004 were 6.79 per cent, 6.8 per cent, 7.08 per cent and 7.69 per cent, respectively. The country recorded GDP growth of 7.7 percent in the first half of this year.

 

Vietnam had to import over 1.5 million tonnes of rice in 1974 and 450,000 tonnes of the commodity in 1988, but it became the world’s second biggest rice exporter after Thailand in 2003. Vietnam shipped abroad nearly 4.1 million tonnes of rice last year. Now, it ranks the first in the world in pepper export, and the second in coffee and cashew nut export. Before 1986, a large amount of key Vietnamese items, including food, foodstuffs, live animals, drinks, tobaccos and coal were exported to socialist countries. Now, a bigger number of local goods are available all over the world. Vietnam made export turnovers of US$11.5 dollars in 1999, over US$26.5 billion in 2004, and nearly US$20.4 in the first eight months of this year.

Economic sectors in the country are diversified with the state-owned sector making up 38-39 per cent of the total, and other sectors, especially private and foreign-invested ones developing strongly. There are more than 125,000 private companies, some 16,000 cooperatives and nearly 5,570 foreign-invested enterprises. By late July this year, Vietnam had 123 industrial parks, of which 71 became operational with combined occupancy rate of nearly 60 per cent. The parks lured over 1,500 foreign-invested projects with total registered capital of US$12 billion, and more than 1,600 domestic projects worth nearly US$5.1 billion. Last year, enterprises in industrial parks gained export turnovers of US$5 billion. Meanwhile, the parks created over 700,000 jobs, helping facilitate economic restructure and change the face of many rural areas.

 

Along with the prospering economy, the prestige and status of Vietnam is going up in the international arena. The country has actively integrated in the world, broadening and deepening relations with other nations. Within a short period of time, Vietnam set up diplomatic relations with nearly 40 countries in the third world, established diplomatic representative offices in dozens of others, and participated in 33 international organisations and 19 international treaties. After joining the Association of Southeast Asian Nations (ASEAN) in 1995, Vietnam has actively put forth many important initiatives to strengthen intra-block cooperation, as well as beef up ties with non-block members. The normalisation of the Vietnam-US relations in July 1995 was a milestone in Vietnam’s diplomacy history: the country has diplomatic ties with all big nations.

Other sectors, including education, training, healthcare, culture, science and technology have also witnessed remarkable changes. The country completed the generalisation of primary education in 2000. By late 2005, some 30 cities and provinces nationwide will have completed the generalisation of junior secondary education. Up to 7.5 million jobs were created in the 2001-2005 period. The percentage of poor households (according to the old poverty standards) sharply fell to 8.3 per cent in 2004 from 58 per cent in 1993.

 

The above-mentioned achievements come from a comprehensive and dynamic process of renovation. The first milestones were Vietnam’s victory over hunger and illiteracy in the late 1940s, the timely economic rehabilitation in the 1956-1957 period, the economic reform in the northern region from 1958 to 1960, the successful realisation of the first five-year socioeconomic development plan from 1961 to 1965, the application of the wartime plan in the 1965-1975 period, and the implementation of the second and the third five-year plans.

Specifically, the sixth National Congress of the Communist Party of Vietnam in December 1986 adopted the “doi moi” policy. It is a turning point in Vietnam’s socioeconomic development way, which leads the country to faster industrialisation and modernisation.   

 

Now, Vietnam is in the process of deeper regional and international economic integration. It is completing last multilateral and bilateral negotiations on its accession to the World Trade Organisation (WTO). By late August 2005, the country had concluded bilateral talks with 20 partners, including the European Union, Japan, China, South Korea, India, Canada and Switzerland. Vietnam is amending existing laws and regulations as well as building new ones in compliance with international laws and practices.