Vietnam Economy

Vietnam Population and Economy

With the proclamation of the Socialist Republic of Vietnam (April 25, 1976), one of the most troubled phases in the history of the country ended, characterized by a very hard struggle, in which internal and international reasons were intertwined. The Socialist Republic of Vietnam, within its current borders, includes the two territories which, originally separated by a simple military demarcation line established by the Geneva Conference in 1954, had then seen the consolidation of two different state groups: in the North the Democratic Republic of Vietnam, and in the South, after the deposition of Emperor Bao Dai (1955), the Republic of Vietnam.

Pending the approval of a new constitution, the Constitution of the Democratic Republic of Vietnam (1960) is in force in the country, according to which the National Assembly holds the legislative power, appoints and revokes the government, and elects the president of the Repubblica, which holds office for four years. Administratively, the state is divided into three urban districts (Hanoi, Hö Chi Minh – formerly Saigon -, and Haiphong), and thirty-five provinces. National language is Vietnamese (Annamite). The most widespread religions are Buddhism and Taoism. Vietnam is a member of the United Nations (since September 20, 1977) and of COMECON (since July 1978).

Population. – On an area of ​​329,566 km 2, the reunified republic has 47,150,000 residents, according to the last census, carried out in 1976. The population growth coefficient is around 3% per year (average for the period 1970-76). 84% of the population is made up of Vietnamese (Viet). Sixty or more ethnic minorities are represented by groups scattered in the mountainous regions of the country: Tay (742,000); Khmer (651,000); Thai (631,000); Muong (618,000), Nung (472,000), etc.

Capital of the reunified republic is Hanoi (former capital of Vietnam of the North), which in 1976 had 1,434,500 residents. The former capital of Southern Vietnam, Saigon, has been given the new official name of Hô Chi Minh: with almost three and a half million residents, it is by far the most populated city in the country.

Economic conditions. – Having regained unity, Vietnam immediately faced the enormous problems connected with the reconstruction of the national economy. In drawing up the 1977-81 five-year plan, which sets out the general lines of the program, due account was taken of the profound differences in structure that characterize the economy of the two parts of the country. In fact, Vietnam of the North and Vietnam of the South, which in 1960 could both be considered two underdeveloped agricultural countries, gave completely different directions to the development of their respective economies in the period prior to reunification.

The Northern Vietnam, which already in 1958 had made the choice of the transformation in a socialist sense of the relations of production in all economic sectors, had given great impetus to the development of industrial activities (in 1961-65 45% of total investments were destined for industry and 20% to agriculture). An essential role was assigned to heavy industry plants (iron and steel, basic chemicals), and to infrastructures for energy production (thermoelectric and hydroelectric plants). The industrial apparatus had been enriched with a large number of factories in the mechanical, chemical, food and textile sectors. In the agricultural field, the construction of large irrigation systems had made it possible to expand the irrigated area; the average unit yield of rice, also thanks to the widespread diffusion of the double harvest, it had marked significant improvements. All this in a context of progressive and almost complete nationalization and collectivization of the various sectors of the economy. The tremendous destruction suffered by the bombings during the years 1965-68, and subsequently in 1972, had slowed but not stopped the economic growth of the country: the reconstruction work, started immediately after the signing of the Paris agreements, in 1975 it could be considered already over.

In South Vietnam, which in 1960 presented a starting situation substantially similar to that of Vietnam del Nord, the evolution of the economic and social framework was largely influenced by the events of the long and bloody civil war, which ended with the seizure of power by part of the National Liberation Front and with the capitulation of the Saigon government, militarily supported by the United States (1975). At the end of the conflict, the economy of the South was in disastrous conditions. In the agricultural sector, productivity had fallen to very low levels. Already in 1965 the country, from exporter of its greatest product, rice, had become an importer. The crops that supplied raw materials to industry and fueled exports – sugar cane, tea, coconut palm, cotton – were decimated. The weak industrial sector, limited to some food and textile industries, had been overwhelmed by the lack of raw materials, by the very high costs of energy, and by the increasing quantities of industrial products imported, primarily from the United States. The tertiary sector had been the only one to develop, but only for reasons related to war requirements: increase in military cadres, construction of aerodromes and asphalted roads, expansion of traffic in the port of Saigon, proliferation of bars and night clubs. To fill the trade balance deficit in the period of the US presence in Vietnam had been provided by the huge financial aid of the USA, the same that allowed the maintenance of military forces and the carrying out of war actions:

The action taken by the Hanoi government in the post-war phase of reconstruction and integration of the national economy points to some main objectives. First of all, the strengthening of agriculture, through an intensification of rice production in the North, and the rehabilitation of the countryside devastated by the war in the South. The dramatic imbalance between the rural population and the urbanized population was attempted to repair with the establishment of “new economic zones “, where residents of overcrowded cities and ex-military have been transferred by authority. In the South, the process of collectivisation of agriculture continued, which had already begun in the occupied areas before the fall of the Saigon government.

Main crops and agricultural productions in 1976: rice (5.3 million ha and 120 million q); maize (260,000 ha and 3.2 million q); sweet potatoes (235,000 ha and 12 million q); cassava (155,000 ha and 11.5 million q). Also sorghum, soy, peanut, cotton, coconut palm, jute, etc. The development of heavy industry was subordinated to the relaunch of the agricultural sector; the plan provides incentives for light manufacturing industries located in the South.

The most important industrial districts (steel and mechanical, chemical, shipbuilding, textile industries) are concentrated in the North, where they make use of the greater availability of energy sources (coal, 4.2 million tons in 1975) and mineral resources (iron, zinc, tin, phosphates). Commercial exchanges take place to a large extent with the Soviet Union, since Vietnam became part of the USSR’s area of ​​political-military, economic and cultural influence.

Routes of communication. – Main ports are Haiphong and Hô Chi Minh. The road network has an overall development of about 36,000 km, less than a sixth of asphalted. Among the initiatives aimed at facilitating the integration of the two parts of the country, the so-called “Reunification Project” is worth mentioning: the reconstruction and modernization of the Hanoi-Hô Chi Minh railway, which constitutes the fundamental axis of the Vietnamese railway system. The line was reopened to traffic in January 1977.

Vietnam Economy