Vietnam: Economic Development Challenges

Topics: Economics, Planned economy, Economy Pages: 2 (554 words) Published: March 27, 2011
Economic development challenges
> Vietnam had been heavily wounded after centuries of being colony and only be able to claim independent 35 yrs ago from the American war. The Vietnamese economy was shattered after the United States Government had dropped Agent Orange on crops, bombed farm lands and imposed heavy sanctions after the 'pull out' of American troops. Vietnam's agriculture, business and industry were devestated. The economy was left with by small-scale production, low labor productivity, unemployment, material and technological shortfalls, and insufficient food and consumer goods >

> Vietnam was depended on the foreign debts from Soviet Union and the socialist Eastern European countries to survive. The country economy was central planned > and based mostly on agricultural activities. 80% of population worked on agriculature sector. However, Vietnam was not growing > enough rice under collectivized agriculture to feed itself. In 1986 Vietnam had to import 1.5 million tons of rice and starvation conditions were prevalent. Added to the problem was poor institutional structures, their leaders who were generals periously during wartime have very little economics knowleges to manage the newborn nation. Dreath of economics managers with professional skills to manage and control both macro and micro-economies lead to poor process information and forecast market inaccurately >

> During the first the 10-year period of the centrally planned economy from 1975 to 1985 the nation suffered from starvation and almost 0% industrial growth. All of the assets were belonged to the state and private ownerships were illegal as well as private foreign trade. The market was still at very low level of development, infrastructrure and laws are much drawback comapre with it's neibourghs like Thailand, Malaysia. >

> Economic policies used to address challenges
> Acknownleging the fall of Soviet Union, the Vietnamese government decided to decentralize planning and...
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