Libmonster ID: U.S.-1443
Author(s) of the publication: D. DUBROVIN

LIBERAL REFORMS IN THE ECONOMY BRING IMPRESSIVE RESULTS

Since the beginning of the 1990s, having given up hopes of achieving success, "following the socialist path", Vietnam turned its eyes to the West Years of reforms aimed at liberalizing the market economy, policies to encourage foreign investment have done their job: the Vietnamese "economic miracle" has gradually begun to take real shape. However, although Vietnam has made significant progress in modernizing and industrializing the country in recent years, there are still many challenges, primarily of an economic nature.

The country has come out of a critical situation with honor - after famine and a card system for distributing food and essential goods at the beginning of the past decade, Vietnam has not only fully coped with food shortages and saturated the industrial market, but also entered the top three world rice exporters. In 2000, the country's gross domestic product grew by more than six percent.

The main reason for the success of the Socialist Republic of Vietnam is the comprehensive reform of the national economy, which began in 1986, almost simultaneously with perestroika in the USSR, and became an urgent necessity after the fall in Soviet economic aid at the turn of the 90s. The reform is based on encouraging private production while maintaining state control over large-scale industry, curbing inflation, actively attracting foreign investment, and integrating the country into the global economy.

Transformations in the Socialist Republic of Vietnam were complicated by the upheavals of the collapse of the system of world socialism, the regional financial and economic crisis, as well as severe annual natural disasters. During the 15 years of implementation of the renewal strategy (1986-2000) developed by the Communist Party of Vietnam at the VI Congress (December 1986), during the 10 years of implementation of the socio - economic development program (1991-2000) and the implementation of the last five-year plan, the Vietnamese people have achieved significant results in leading industries. At the same time, Vietnam managed to maintain political stability and create the necessary favorable conditions for construction and economic development.

The "Program for Building the country in the Transition period to Socialism" was developed and consistently improved, and the mechanisms for its implementation were supplemented and updated. An economic reform has been implemented at the macro level, primarily aimed at transforming the structure of the economy and improving governance mechanisms. The task was set to create a multi-layered economy operating on a market basis, but under the control of the state.

As a result of a well-chosen development strategy, significant economic success has been achieved. The average annual GDP growth rate over the past decade was 7.4 percent, while in the period 1991-1995 it was even slightly higher - 8.2 percent. GDP per capita in 2000 was 1.8 times higher than in 1990.

Against this background, the achievements in agriculture, including in the field of food production, are particularly significant. If in 1988 Vietnam imported 400 thousand tons of food, experiencing a serious shortage at home, then since 1989 it has steadily increased its export capacity, tripling the volume of rice exports and bringing it to 4.5 million tons. In 2000, a rich harvest was harvested and a record level of growth was achieved - in the first half of the year alone, 16.7 million tons of food were produced, which is 1.1 million tons higher than in the corresponding period of the previous year. Thanks to the government's policy of priority financing of agricultural production and its growth, the appearance of the Vietnamese village has changed significantly over the past 10 years.

Vietnam's industry also developed rapidly. The average annual growth rate was 10 percent. In 2000, production growth reached 14.7 percent. We managed to achieve stable performance in such an important industry for the country as the oil and gas industry. If in 1986 Vietnam produced only 40 thousand tons of oil, in 1990 its production was 2.7 million, and in 1997 - 7.7 million tons. Over the next two years, this figure was doubled. More than 80 percent of oil production is provided by the joint Russian - Vietnamese company Vietsovpetro. Currently, with the active assistance of Russia, it is developing-

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Construction of the country's first oil refinery, Zungkuat, with a capacity of six million tons of finished products per year is underway.

Increasing agricultural and industrial production contributed to an increase in the country's total exports. Since 1990, the average annual growth rate of exports has been 20 percent, despite a slight drop in 1998 due to the financial and economic crisis in the region. In 2000, export foreign exchange earnings reached $ 6.43 billion (an increase of 26.7 percent compared to the previous year). At the same time, enterprises with foreign participation exported products worth three billion dollars (an increase of 58 percent). Oil exports totaled 7.1 million tons. However, the sale of rice has declined, which is due to a slight drop in demand for it on the world market.

The volume of imports in value terms amounted to $ 7.14 billion, which is 33.8 percent higher than the corresponding figure in 1999. The increase in imports is due to an increase in the needs of the national economy for raw materials, fuel, machinery and equipment, as well as an increase in prices for imported products. Thus, the trade balance is still negative and amounts to about $ 710 million.

As a result of active efforts aimed at improving the investment climate in the country, it was possible to attract significant amounts of foreign direct investment. As of the beginning of 2000, about three thousand licenses were issued for the construction of facilities in various regions, about 700 of them have already been put into operation, the rest are under development or close to completion. The annual growth of products produced at facilities with the participation of foreign investment reaches 20 percent. Foreign direct investment accounts for 25 percent of the total amount invested in Vietnam's economy.

Some changes are being observed in the area of financial policy, which was supported by the recent opening of the securities market in Ho Chi Minh City. The service and social security sectors are developing. Vietnam is implementing targeted programs to eliminate hunger and poverty in remote areas, improve health care, and improve the living standards of its people. Educational, health and cultural programs are being implemented.

At the same time, it should be recognized that the structure of the economy is still irrational, legislative and regulatory acts and institutions of various fields do not form a single system; products produced are often not competitive on the world market.

The policy of openness and significant progress in the socio-economic field have changed the attitude of leading countries of the world, international financial organizations and countries of the region towards Vietnam. In 1995, the United States lifted the embargo and established diplomatic relations with Vietnam, and in July 2000, the two countries signed a trade agreement. In 1991, good-neighborly relations with China were restored, and in December 1999, both countries signed an agreement on land borders. In 1995, the EU and Vietnam signed a framework agreement on scientific and technical cooperation. Vietnam became an ASEAN member in July 1995 and an APEC member in 1998. At the same time, Vietnam is expanding its relations with other countries, international, regional and non-governmental organizations, and actively developing international cooperation.

Russia maintains mutual understanding with Vietnam on many key international issues. Emphasizing its interest in further expanding trade and industrial ties with Moscow, Hanoi notes that it continues to rely on Russia's support, in particular in the field of military-technical cooperation. In general, according to Le Kha Phieu, General Secretary of the Communist Party of Vietnam Central Committee, relations between the two countries "remain friendly and unshakable - we are not only strategic partners, we are friends and partners. Russia's history has given it the role of a great power, and that is why we want it to take its rightful, important place in the world."


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D. DUBROVIN, "NON-SOCIALIST" VIETNAM // New-York: Libmonster (LIBMONSTER.COM). Updated: 06.06.2024. URL: https://libmonster.com/m/articles/view/-NON-SOCIALIST-VIETNAM (date of access: 25.07.2024).

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