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91-489: Đổi Mới ( IPA: [ɗo᷉i mə̌ːi] ; transl.  "renovation" or "innovation" ) is the name given to the economic reforms initiated in Vietnam in 1986 with the goal of creating a " socialist-oriented market economy ". The term đổi mới itself is a general term with wide use in the Vietnamese language meaning "innovate" or "renovate". However, the Đổi Mới Policy ( Chính sách Đổi Mới ) refers specifically to these reforms that sought to transition Vietnam from

182-469: A command economy to a socialist-oriented market economy. The Đổi Mới economic reforms were initiated by the Communist Party of Vietnam in 1986 during the party's 6th National Congress . These reforms introduced a greater role for market forces for the coordination of economic activity between enterprises and government agencies and allowed for private ownership of small enterprises and the creation of

273-411: A stock exchange for both state and non-state enterprises. After reunification into a unified communist state in 1976, the economy of Vietnam was plagued by enormous difficulties in production, imbalances in supply and demand, inefficiencies in distribution and circulation, soaring inflation rates, and rising debt problems. Vietnam's gross domestic product (GDP) in 1984 was valued at US$ 18.2 billion with

364-458: A Central Organizing Commission conference, the lack of preparations were due to an unidentified number of party grassroots organs failing to prepare their personnel for the Congress, and superior echelons failing to inform lower-level echelons on the status of the Congress. The 5th Secretariat announced the organizing of a Criticism/Self-criticism campaign on 11 March on all party levels to prepare for

455-493: A cynical collective mindset within the party had taken hold and manifested itself through corruption, inflexibility and dishonesty. The plenum put forward three points to solve the problems alleged by Tho; (1) to get party cadres to focus on technical economic and management responsibilities, (2) cadres were to be organized and get specialized training in economic and administrative fields to reequip them with information on how to run an increasingly complex economy, and (3) engineer

546-444: A firm technical-material base for the foundation of socialism, and to enable Vietnam to better integrate with the world economy. In the early 1990s, Vietnam accepted some World Bank reform advice for market liberalization, but rejected structural adjustment programs and conditional aid funding requiring privatization of state-owned enterprises. The socialist-oriented market economy is a multi-sectoral commodity economy regulated by

637-451: A lower Gini coefficient. Some authors associate this model with the East Asian model of state capitalism , while others associate it with market socialism . Common to other East Asian developmental states, Vietnam shares mutually supporting institutions and active public authorities with strong capacities to implement long-term economic plans. The Communist Party of Vietnam maintains that

728-589: A market economy and commodity-exchange economy and that socialism will only emerge after this stage has exhausted its historical necessity and gradually transforms itself into socialism. Proponents of this model argue that the economic system of the Soviet Union and its satellite states attempted to go from a natural economy to a planned economy by decree without passing through the necessary market economy phase of development. Proponents of socialist market economies distinguish themselves from market socialists with

819-438: A market economy, income inequality, negative environmental and social effects still pose a major threat as the country began eyeing integration into the global economy. State-owned enterprises , which still made up a significant portion of the economy, remained inefficient and are plagued by problems of corruption. In terms of poverty alleviation, despite recording a significant decline in the national poverty rate, absolute poverty

910-519: A per capita income estimated to be between US$ 200 and US$ 300 per year. Reasons for this mediocre economic performance have included severe climatic conditions that afflicted agricultural crops, sanctions enforced by the United States after their defeat, bureaucratic mismanagement, extinction of entrepreneurship and military occupation of Cambodia (which resulted in a cutoff of much-needed international aid for reconstruction). From 1978 until 1991, Vietnam

1001-466: A point where socialism becomes a technical possibility. As such, it is similar to the Chinese position on the primary stage of socialism . Vietnam's socialist-oriented market economy shares many common characteristics with the Chinese socialist market economy in its institutions and policies, combining fundamentally market-based economies with the predominance of state-owned enterprises, the coexistence of

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1092-472: A prominent role. The increases in grain and food production would in turn, according to the Economic Report, increase the production of consumer goods. The report stated that these policies were "aimed at ensuring the daily needs of the people, and the regeneration of the labour force, as well as attracting a million of labourers to solve the problem of employment for the people, and, on that basis, create

1183-509: A severe self-criticism of the central party leadership. The leadership's failures were reiterated by a host of speakers, including Nguyễn Văn Linh, who spoke about the problems of "sluggish production, confusion in distribution systems, enduring socio-economic difficulties, and flagging confidence of the population". Nguyễn Thanh Bình , the Central Committee Secretary responsible for agriculture, echoed previous sentiments during

1274-430: A shift in the internal balance of power. In a Nhân Dân ( The People ) editorial, Lê Đức Thọ stressed the need to go beyond political slogans and remonstration to enhance the level of management skills of party cadres in party-level organizations. Lê Đức Thọ wanted to change the party's role in the economy from that of implementer to one of supervisor. The central leadership faced an obstacle; most party cadres had what

1365-526: A vibrant private sector, a single-party political system, and the existence of five-year economic plans. This has led development economists to consider both these countries sharing the same basic economic model. The differences between these two models includes a higher degree of decentralization and autonomy of local governments in Vietnam (being higher than in other East Asian developmental states), with greater income redistribution between provinces resulting in

1456-422: Is a product of the Đổi Mới economic reforms which led to the replacement of the centrally planned economy with a market-based mixed economy based on the predominance of state-owned industry. These reforms were undertaken to allow Vietnam to integrate with the global economy. The term "socialist-oriented" is used to highlight the fact that Vietnam has not yet achieved socialism and is in the process of building

1547-401: Is seen as a key step for achieving the necessary economic growth and modernization while being able to co-exist in the contemporary global market economy and benefit from global trade. The Communist Party of Vietnam has re-affirmed its commitment to the development of a socialist economy with its Đổi Mới reforms. Socialist-oriented market economy The socialist-oriented market economy

1638-563: Is to show, both production and the standards of living improved over this period. Unlike many other fast-growing economies, the Vietnamese government diverted tax revenue collected from the expansion of economic activities to ensure that underdeveloped areas receive adequate investment in infrastructure and welfare. As a result, poverty rates declined significantly in most provinces, while income also recorded significant growth in metropolitan areas and provinces where levels of investment were high. As

1729-521: Is to support agriculture and light industry on a proper scale and at an appropriate technical level." Võ Văn Kiệt stressed the role of exports and the production of grain, food, and consumer goods to revitalize the Vietnamese economy. The main objective of the 4th Five-Year Plan was the production of grain and food products; "a target of 22–23 million metric tons of grain in paddy" was set for 1990. While several methods were to be used to reach this goal, material incentives and end-product contracts would play

1820-505: Is unknown as the media did not state them). While other party conferences criticized the draft Political Report, several others expressed enthusiasm or unanimously supported it. Because the National Assembly failed to issue a draft of the 4th Five-Year Plan , the district-level conferences were forced to discuss mostly local economic aims because they lacked national economic data. The Cuu Long conference held between 6 and 10 October

1911-541: The Minister of Interior , in his speech to the Cuu Long Provincial Congress said that the reintroduction of the market economy and the renewed acceptance of private ownership would not hurt Vietnam's socialist transformation. To secure Vietnam's socialist credentials, the state would remain dominant to protect Vietnam from the uncontrolled free market. The 11th plenum (17–25 November 1986), the last plenum before

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2002-571: The Non-Aligned Movement . The Congress announced Vietnam's wishes to improve its relations with the capitalist world, specifically mentioning Sweden, Finland, France, Australia and Japan. Võ Văn Kiệt , a deputy chairman of the Council of Ministers, delivered the Economic Report to the 6th National Congress. The political and economic reports stressed Đổi Mới (Renovation), and Vietnam specialist Carlyle Thayer wrote that Võ Văn Kiệt may have been

2093-453: The World Bank , Vietnam has been a development success story. Its economic reforms since the beginning of Đổi Mới in 1986 have helped to change Vietnam from being one of the world’s poorest nations to a middle-income economy in one generation. Despite recording high GDP growth, the Vietnamese economy still had many structural problems heading to the new century. Without experience in managing

2184-653: The private sector and the state in non-strategic sectors. In 1987, inspection stations along the national highway were removed to allow more efficient flow of goods and services between different municipalities. Markets where private agricultural products were allowed to be sold were rapidly growing. Subsequently, the National Assembly introduced the 1987 Foreign Investment Law with a desire to "mobilize every means to attract foreign capital for local development," (Foreign Investment Law 1987) even permitting complete foreign ownership of domestic physical assets and outlawing

2275-409: The 2nd Central Committee were central-level officials, while only 46 percent in the 6th Central Committee were from the centre. These changes reflected the party's overriding concern about basic problems. On 18 December at the end of the 6th National Congress, the delegates elected the 6th Central Committee, which contained eight more members than the 5th Central Committee, while alternate membership

2366-448: The 4th Five-Year Plan was the production of grain and food products; "a target of 22–30 million metric tons of grain in paddy" was set for 1990. While several methods were to be used to reach this goal, material incentives and end-product contracts would play a prominent role. The Central Management System was abolished and the economic focus was shifted to the creation of a market-driven economy with different sectors, and competition between

2457-401: The 4th Five-Year Plan. During the 4th Five-Year Plan, Võ Văn Kiệt said, "[t]he ... main orientation for heavy industry in this stage is to support agriculture and light industry on a proper scale and at an appropriate technical level." Võ Văn Kiệt stressed the role of exports and the production of grain, food, and consumer goods to revitalize the Vietnamese economy. The main objective of

2548-542: The 4th National Congress in 1976. On 17 December, the Congress's third day, the three top leaders—Trường Chinh, Lê Đức Thọ—and head of government Phạm Văn Đồng , announced that they would not seek membership of the 6th Politburo or the 6th Central Committee . However, these three were appointed to the Advisory Council to the Central Committee . This was not new; at the 5th National Congress six senior members of

2639-521: The 6th Congress, endorsed the platform for the congress. The 6th National Congress was convened on 15 December 1986 and lasted until 18 December. The Congress reaffirmed its commitment to the reform program of the 8th plenum of the 5th Central Committee, and issued five points; "The Central Committee, the Political Bureau, the Secretariat and the Council of Ministers were primarily responsible for

2730-471: The 6th National Congress signalled a shift in Vietnam's foreign policy. The Congress reaffirmed Vietnam's strong ties with the Soviet Union and its "special relationships" with the socialist states of Laos and Kampuchea (Cambodia). However, the Congress highlighted the need to strengthen its relationship with countries belonging to Comecon , the international communist trade organization. Yegor Ligachev ,

2821-510: The 6th National Congress. The 6th National Congress emphasized the need to strengthen the socialist mode of production . The 8th plenum of the 5th Central Committee (10–17 June 1985)—and its antecedents the 6th (3–10 July 1984) and the 7th (11–17 December 1984) plenums—instructed the party to direct a performance review of its organization, personnel and efficiency. Lê Đức Thọ , head of the Central Organizing Commission , said

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2912-473: The 9th plenum (mid-December 1985) forced the central leadership to reintroduce rationing in order to reduce the hardships for the poor, while in March 1985 the Council of Ministers legalized limited, small-scale, private enterprise in the handicraft and small industry sectors. The CPV tried to introduce market rules into the soviet planned economy , while stressing the need to control the markets. At this early stage,

3003-430: The Central Committee as either full or alternate members. The 6th Congress continued the trend of increasing the size of the Central Committee; membership was 124 full and 49 alternate members. Most of the new officials in the Central Committee were from the second generation of Vietnamese revolutionaries who gained prominence during Vietnam's struggle against French colonial rule in the 1940s and 1950s. The composition of

3094-458: The Central Committee changed at the 6th National Congress, with a notable increase of economic specialists, technocrats and provincial secretaries as members, but military representation in the Central Committee decreased. Only 8 percent of members of the 6th Central Committee were from the Vietnam People's Army . The number of central-level officials also decreased; 74 percent of the members of

3185-528: The Congress over its shortcomings" —a quote from the Political Report read by Trường Chinh to the 6th National Congress In the Political Report delivered to the 6th National Congress on 15 December, Trường Chinh said that the Central Committee, the Politburo, the Secretariat and the Council of Ministers were responsible for their own inadequacies and Vietnam's economic failures. The report functioned as

3276-444: The Congress. The campaign's main goals were to discipline party committees at the upcoming local party congresses; to assess the party's performance with an emphasis on economics since the 5th National Congress ; to contribute to the future reorganization of the party and reassignment of personnel; and to ensure that the drafting of the Congress's resolutions were finished on time and to appoint new local executive committees in light of

3367-504: The Council of Ministers, delivered the Economic Report to the 6th National Congress . The political and economic reports stressed Đổi Mới (Renovation), and Vietnam specialist Carlyle Thayer wrote that Võ Văn Kiệt may have been the foremost advocate of this concept. In his speech to the Congress, Võ Văn Kiệt said, "in the economic field, there will be renovation in economic policies and the management system." Võ Văn Kiệt said that agriculture and not heavy industry would be most important during

3458-478: The Economic Report. To achieve these goals the Economic Report stated economic reforms to improve efficiency coupled with the importance of foreign investment and possible tourism revenues. The 6th National Congress elected the 6th Central Committee . At the 4th, 5th and 6th National Congresses approximately 45 percent of full Central Committee members were retained, 18 percent of alternate members were promoted to full membership and 37 percent were newly elected to

3549-474: The General Secretary, gave the opening speech, where he reaffirmed the central party leadership's commitment to reform. The 10th plenum unanimously approved the draft Political Report for the 6th National Congress. Preparations for the Congress began with party congresses at the grass-root and provincial-levels, during which delegates were elected. Preparation for the Congress began slowly. According to

3640-588: The Ha Son Binh Congress criticized the irrational management of provincial economic affairs. While these committees criticized past policies or well-known deficiencies, none of them criticized the policies of the central party leadership. General Secretary Trường Chinh in a speech to the Hồ Chí Minh City Party Organization admitted to "serious shortcomings and mistakes" by the central party leaders in economic leadership, and criticized

3731-541: The Hồ Chí Minh City Party Committee, where leading cadres unanimously approved a program for action and proposed changes to the draft Political Report. The Nha Trang Municipal Party Organization held a day-long conference discussing the Draft Political Report, which ended tepidly; the discussions were extended so that the delegates reached an unenthusiastic "identity of views" (what was discussed

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3822-682: The Party was the death of Party General Secretary, Lê Duẩn , in July 1986. In December 1986, the Sixth Party Congress elected as Party Secretary the more liberal Nguyễn Văn Linh , a reformist and former leader of the National Liberation Front . While Đổi Mới was officially introduced at the 6th National Congress of the Communist Party of Vietnam in 1986, the state had initiated reforms in

3913-579: The US occupation of the south which were tradable in the Soviet for raising capital. Further, neighboring countries such as Laos and Cambodia provided opportunities to smuggle goods into Vietnam. There were two types of goods smuggling from Cambodia; the first one included those left behind by victims of the Khmer Rouge , while the other were those imported from Thailand . For instance, Thai beer being imposed high duties

4004-414: The above-mentioned errors [economic crisis and overlapping bureaucracy] and shortcomings in the party leadership. It should be emphasized that the delay in correctly affecting a transition in the nucleus leading body was a direct cause for the inadequacy of party leadership in recent years in meeting the requirements of the new situation. The Central Committee wishes to self-criticize [itself] earnestly before

4095-511: The basis for a future socialist system. The economic model is similar to the socialist market economy employed in China . The Đổi Mới economic reforms were initiated by the Communist Party of Vietnam in 1986 during the party's 6th National Congress . These reforms introduced a greater role for market forces for the coordination of economic activity between enterprises and government agencies, and allowed for private ownership of small enterprises and

4186-454: The capacity to reap the benefits of increased FDI inflows. In various high-value added industries, especially the retail industry, FDI firms have grown to dominate the domestic market, crowding out domestic private investors. Even more, profits created by foreign investment tend to be repatriated to their home countries, and thus do not get reinvested into the local economy as profits for a domestic firm would. In terms of technological development,

4277-412: The contemporary global market economy and benefit from global trade. The Communist Party of Vietnam has re-affirmed its commitment to the development of a socialist economy with its Đổi Mới reforms. This economic model is defended from a Marxist-Leninist perspective, which states that a planned socialist economy can only emerge after first developing the basis for socialism through the establishment of

4368-404: The creation of a stock exchange for both state and non-state enterprises. The economic reforms aimed to restructure the Vietnamese economy away from Soviet-type central planning and towards a market-based mixed economy intended to be a transitional phase in the development of a socialist economy . The goal of this economic system is to improve the productive forces of the economy, developing

4459-550: The district-level committees. The party planned to decentralize some duties and responsibilities at departmental and sectoral levels while empowering ward-level party organs by strengthening their role in economic planning, market management and public security, and trying to improve the performance of the Control Commission and its lower-level bodies. The party leadership tried to make the cumbersome bureaucracy efficient. Economic reforms in 1985 led to rampant inflation, and

4550-551: The district-level congresses mostly agreed on basic economic goals and several proposed amendments to the draft Political Report. At the Binh Tri Thien Provincial Party Organization, 250 cadres reportedly made 3,000 suggestions, "including amendments to and revision of the Draft Political Report" and concrete policies which featured prominently in it. The same occurred in the Standing Committee of

4641-735: The early 1980s. Specifically, in October and November 1978, cooperative leaders in the north were permitted to rent out fields to members during the winter as long as the latter produced winter crops collectively for required number of days and return the land in time for growing paddy in the spring. At the Six Party Plenum in August 1979, the Party allowed for the decentralization of economic decision making related to farming and introduced more incentives for production expansion. In 1980, Provincial governments were permitted to establish trading firms, breaking

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4732-599: The economy's automation rate and the stock of highly-skilled labor remained low. The working environment, at the same time, remains highly inefficient and unwelcoming towards further reform, so much so that the country now experiences a major brain drain. The Communist Party of Vietnam maintains that the socialist-oriented market economy is consistent with the classical Marxist view of economic development and historical materialism, where socialism can only emerge once material conditions have been sufficiently developed to enable socialist relations. The socialist-oriented market model

4823-400: The election of delegates to the 6th National Congress. At least five provinces had completed preparations for the basic-level party congresses by September, in four of these the basic-level congresses ran until late September. District-level congresses convened in some provinces in late August, while other provinces started convening them in late September. According to the Vietnamese media,

4914-429: The executive committee directly subordinate to them on the Central Committee's draft Political Report. Local executive committees started convening conferences in early August to study the draft report. These conferences acted as precursors to the village-, municipal-, ward- and enterprise-level Party committee congresses, which started convening in mid-August. By early August, some grassroots-level party organs had begun

5005-420: The foremost advocate of this concept. In his speech to the Congress, Võ Văn Kiệt said, "in the economic field, there will be renovation in economic policies and the management system." Võ Văn Kiệt said that agriculture and not heavy industry would be most important during the 4th Five-Year Plan. During the 4th Five-Year Plan, Võ Văn Kiệt said, "[t]he ... main orientation for heavy industry in this stage

5096-407: The head of the Soviet delegation to the Congress, surprised the Vietnamese and many foreign observers by announcing an economic aid package 8–9 billion rubles (11–13 billion US dollars) at the time, and was about equal per capita of aid given to South Vietnam by the United States before 1975. The Political Report mentioned the importance of Vietnam's relations with India and its continued membership in

5187-407: The imposition of a superstructure on Vietnam's current conditions. Trường Chinh endorsed the program of the 8th plenum of the 5th Central Committee and "new economic concepts", but told the attendees that the 5th Politburo had undertaken a systematic assessment of economic policies, which included the continuation of a mixed economy , the acceptance of private ownership for the foreseeable future,

5278-436: The industrial sector. While foreign trade was centrally controlled by the state, the state started to loosen control of foreign trade. Consumer goods were sent back home by Vietnamese who worked or studied in the socialist countries in the first stages up to the reunification. The sources of commercial goods diversified since then; these varied from gifts shipped by overseas Vietnamese to their families, to goods left over during

5369-420: The introduction of economic reforms, labelled Đổi Mới (Renovation), and the election of a new party leadership. The sitting General Secretary, Trường Chinh was not reelected, and Nguyễn Văn Linh took his place. The 6th Politburo , 6th Secretariat and the Control Commission were elected. The Advisory Council to the Central Committee was established, and contained high-ranking officials who had retired at

5460-410: The market, consisting of a mixture of private, collective and state ownership of the means of production. However, the state sector and collectively owned enterprises form the backbone of the economy. It is similar to the Chinese socialist market economy in that many forms of ownership, including cooperative/collective enterprises, communal, private and state ownership models co-exist in the economy, but

5551-517: The monopoly of foreign trade by the central state in Vietnam. In 1981, agricultural reforms were introduced, which allowed farmland to be distributed to individual workers, individual management of a collective, and farmers could retain all production beyond their farming quota. These agricultural reforms contributed to the recovery of industrial output. Following these measures, price controls were removed from numerous consumer products to increase trade at real-market prices and ease shortages of them within

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5642-482: The need to end bureaucratic centralism, and the need for decentralization in economic decision-making. In his speech to the 4th Congress of the Hồ Chí Minh City Party Organization, Nguyễn Văn Linh , a member of the 5th Politburo and 5th Secretariat , endorsed the platforms of 6th, 7th and 8th plenums of the 5th Central Committee while supporting the conclusion reached at the 10th plenum of the 5th Central Committee. He emphasized several Politburo directives. Phạm Hùng ,

5733-442: The overall investment environment and legal transparency improves, approximately $ 18.3 billion of actual foreign direct invested capital flowed into the Vietnamese economy. This increased FDI inflow provided the much-needed capital for economic growth, while also creating jobs for laborers in rural provinces and led to positive technological spillover. For instance, in provinces with high FDI inflow such as Vinh Phuc or Binh Duong ,

5824-404: The party had become "a cumbersome and ponderous mechanism, only marginally efficient, marked by ill-defined responsibilities and poorly divided functions." He further stated that confusion within the party over operational responsibilities between the central party leadership, mass organizations and the state, and between higher and lower party echelons had developed into a serious problem, and that

5915-455: The party leadership considered an outdated education from 20 to 30 years ago, while the party lacked young cadres. To solve this problem, the central party leadership began talking about the need to introduce personnel planning, a retirement age, rotation of officials and tenure length for cadres and sensitive posts. Early in the reform process, the CPV devolved some powers of the party secretaries to

6006-418: The party started a discussion on how much state control and economic planning were necessary. On 8 April, the 5th Politburo issued the " Draft Resolution on guaranteeing autonomy to basic economic units ", which decreed the implementation of the reform program agreed upon by the 8th plenum. The resolution tried to solve several problems by streamlining the bureaucracy to make it more efficient. However, while

6097-427: The party supported making state-owned enterprises more autonomous, they still sought the abolition of individual trade—that is trade not sanctioned by the state. At this stage, the authorities did not seek to alter the duties and responsibilities of central state and party organs. Planning for the 6th National Congress began at the 19-day-long 10th plenum of the 5th Central Committee (19 May – 9 June 1986). Lê Duẩn ,

6188-415: The party's estimated 1,900,000 members. The congress occurs once every five years. Preparations for the 6th National Congress began with 8th plenum of the 5th Central Committee and ended with the 10th plenum, which lasted 19 days. After the 10th plenum, local and provincial party organizations began electing delegates to the congress as well as updating party documents. The congress is noteworthy because of

6279-428: The preparations for the Congress and spoke of the need for decentralization, household and family economics , and the introduction of an independent market. Võ Trần Chí , a member of the Standing Committee of the Hồ Chí Minh City Party Committee, affirmed the Congress's commitment to reform to strengthen productivity and managerial performance. While supporting change, Trường Chinh in his Political Report talked about

6370-448: The prospects of nationalization. Privately owned enterprises were permitted in commodity production (and later encouraged) by the Communist Party of Vietnam . The first half of the 1990s observed changes in the legal framework for the private sector. In 1990, Law on Private Enterprises which provided a legal basis to private firms was enacted, while Companies Law acknowledged Joint-stock company and private limited liability company . In

6461-488: The provincial-level conferences were not completely dormant and scored some minor victories, such as reducing the average age needed to join an executive committee and they adopted a more flexible and efficient mode of planning and organization. As during the district-level conferences, there were certain convocations which attracted attention; the An Giang Party Committee criticized past economic performance, while

6552-554: The requirements to implement reform. The 5th Secretariat published a list of requirements for possible candidates for membership in local executive committees in mid-March 1986, these were; The local congresses preceding the 6th National Congress were far more organized than those held before the 5th National Congress. Unlike the previous Congress, the central party leadership issued instructions and training programs for party cadres on how to organize party congresses and conferences. Certain party cadres were made responsible for tutoring

6643-514: The same year, the Party began discussing the potential of privatizing state-owned enterprises (SOEs), while also normalizing relations with the People's Republic of China . Subsequently, the 1992 Constitution officially recognized the role of the private sector. In the agricultural sector, the Land Law was enacted in 1988, which recognized private land use rights. In addition, Central Committee Resolution 10

6734-417: The service industry, as the share in the retail trade activity increased from 41% to 76% in 1996. Throughout this period, the National Assembly introduced various corporate and income tax deductions to spur both domestic and foreign investment. In terms of rural development, the government restructured the rural economy away from agriculture by incentivizing small and handcraft villages and training labor for

6825-410: The socialist-oriented market economy is consistent with the classical Marxist view of economic development and historical materialism, where socialism can only emerge once material conditions have been sufficiently developed to enable socialist relations. The socialist-oriented market model is seen as a key step for achieving the necessary economic growth and modernization while being able to co-exist in

6916-413: The source of accumulation and an important source of export." According to the Economic Report, during the 4th Five-Year Plan, "the level of exports must be elevated by approximately 70 per cent over that of the previous five-year period". The export of agricultural products, "farm processing products, light industrial, small industrial, handicraft goods and aquatic and maritime products" were emphasized in

7007-542: The state retreated to a regulative role, with the market determining the prices of goods and services. In the early 1990s, Vietnam accepted some World Bank reform advice for market liberalization, but rejected structural adjustment programs and conditional aid funding requiring the privatization of state-owned enterprises. With the reforms, the number of private enterprises increased; and by 1996, there were 190 joint stock companies and 8,900 limited liability companies registered. The private sectors played an important role in

7098-450: The state sector plays a decisive role. In contrast to the Chinese model (dubbed the socialist market economy), the Vietnamese system is more explicitly characterized as an economy in transition to socialism and not as a form of socialism, with the process of building socialism seen as a long-term process. Claiming to be consistent with Marxist theory, socialism is understood to only emerge once Vietnam's productive forces are developed to

7189-418: The state trade system. However, facing these reforms, the Vietnamese government had a negative and opposing attitude. The 6th National Congress of the Communist Party of Vietnam was convened on 15 December 1986 and lasted until 18 December. The Congress reaffirmed its commitment to the reform program of the 8th plenum of the 5th Central Committee, and issued five points; Võ Văn Kiệt , a Deputy Chairman of

7280-408: The state's role as a supplier of goods produced by state-owned enterprises and supported the long-time policy of labour distribution. These policies were passed, and underwrote the economic policies initiated at the 4th and 5th National Congresses. The party leadership's immediate goals set forth in the Political Report were: To restructure the production system; readjust the investment outlay within

7371-410: The system; continue the building and strengthening of the socialist relations of production; to utilize and develop the economic sectors in the correct way; to renovate the way economy was managed; to emphasize the role of science and technology in the economy; and to expand and to increase the effectiveness of Vietnam's foreign economic relations. Neither the Political Report nor any of the speakers at

7462-459: The total value of imports. In addition, Soviet aid decreased, increasing Vietnam's international isolation. This resulted in intense debate within the Communist Party about the efficacy of the command economy system and the possibility of reform in the run up to the 6th National Congress of the Communist Party of Vietnam in December 1986. One of the important developments which provoked change within

7553-536: The unemployment rates declined more significantly than the national rate, while local income per capita also grew significantly. For local businesses, increased FDI inflow created more opportunity to partner with foreign firms through joint ventures and to supply parts and services for foreign firms, while also allowing locals to reap the benefits of technological spillover from FDI. Over time, these local businesses can develop their own production capacity, even becoming strategic partners with foreign investors. According to

7644-524: The validity of the party's organizational principles, which had governed Vietnam's economy. Democratic centralism was to remain unchanged, and centralized management of certain sectors were to be retained. In a closed session, the Presidium of the 6th National Congress on 18 December acknowledged the importance of the continued transformation of private industry and commerce and the validity of economic contracts between production and business units. He endorsed

7735-485: The view of market socialism that markets are a central feature of socialism and that markets are the most feasible mechanism for a socialist economy. 6th National Congress of the Communist Party of Vietnam The 6th National Congress of the Communist Party of Vietnam ( Vietnamese : Đại hội Đảng Cộng sản Việt Nam VI ) (CPV) was held in Ba Đình Hall , Hanoi, between 15 and 18 December 1986. 1,129 delegates represented

7826-640: Was a major member of the Comecon , and therefore was heavily dependent on trade with the Soviet Union and its allies. Following the dissolution of the Comecon and the loss of its traditional trading partners, Vietnam was forced to liberalize trade, devalue its exchange rate to increase exports, and embark on a policy of economic development. In the years immediately prior to the Đổi Mới Reforms, Vietnam faced an economic crisis; inflation soared to over 700 percent, economic growth slowed down, and export revenues covered less than

7917-446: Was increased by 13; the total membership of the new Central Committee was 173. Immediately after the 8th National Congress on 18 December, the 6th Central Committee convened its 1st plenum to elect the composition of the 6th Politburo, the 6th Secretariat , the Control Commission and other central-level party organs. The 1st plenum of the 6th Central Committee brought an end to the protracted generational succession which had begun at

8008-556: Was issued; according to this resolution, farmers were not obliged to participate in cooperatives and were permitted to sell their products on the free market. Also, the Resolution returned land-use rights to private households and recognized them as autonomous economic units. As a result, the agriculture sector and the rural economy began shifting from autarky to commodity production, allowing each region to produce according to their comparative market advantage. In this renewed economic model,

8099-571: Was still rampant in mountainous provinces and provinces along the central coast. Not only so, relative poverty and the urban-rural income gap continue to be on the rise. In major metropolitan areas, affordable housing was lacking, thus hindering further potential growth in living standards for internal migrant labor. Despite recording high FDI inflow, the majority of FDI still focused on exploiting Vietnam's cheap labor and low environmental standards, thus hindering de facto sustainable growth . In terms of technological spillover, many domestic firms still lack

8190-427: Was the first provincial-level conference to be held. By 22 October, 21 provinces had held provincial-level party conferences. The central party leadership faced less criticism on the draft Political Report and socio-economic policies from the provincial-level conferences than by district-level conferences. The provincial-level conferences criticized central policies less and were evasive about critical issues. However,

8281-661: Was usually smuggled by the sea route into Vietnam. As a result of vast privatization and economic reforms, Vietnam underwent a miraculous economic transformation in the 1990s. In specific, the early periods of reform (1986–1990) saw an average GDP growth of 4.4 percent per year, with the average GDP growth rate accelerating to approximately 6.5 percent per year from 1990 until the Asian Financial Crisis of 1997 . In terms of scale, Vietnam's GDP grew almost five times from $ 6.472 billion in 1990 to $ 31.173 billion in 2000, while GDP per capita grew from $ 95 in 1990 to $ 390 in 2000. That

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