A journey which has only just begun

Vietnam now boasts a rich and vibrant economy with many domestic enterprises taking the lead

endeavours of the past 65 years rising from the ravages of wars to prosper in the global political and economic arenas.

Sixty five years have passed since the August Revolution-August 19, 1945 and National Day-September 2, 1945 when President Ho Chi Minh read the declaration of independence, giving birth to the Democratic Republic of Vietnam, now the Socialist Republic of Vietnam.

Despite 30 years of wars, tens of years of revitalisation from the ravages of wars, a national socio-economic crisis in the 1980s as a consequence of the country’s groping around to find development paths and global economic crises, Vietnam has undergone in-depth and comprehensive changes.

Politically, before the revolution, Vietnam, a semi-feudal colony, did not have its name on the global map. The country is now an entirely independent nation which can decide its destiny.

Vietnam is now a member of the United Nations, part of the Association of Southeast Asian Nations (ASEAN), signed a bilateral trade agreement (BTA) with the United States, has diplomatic relations with more than 170 nations and trade ties with more than 200 countries and territories, joined almost all international institutions and organisations, is a member of the World Trade Organization (WTO) and a non-permanent member of the UN Security Council.

With the policy of diversifying and multilateralising relations in multi sectors, Vietnam’s stance on the world arena is increasingly heightened. On the economic side, pre-revolution Vietnam was a backward agriculture-based country with the majority of its population living in slavery and extreme poverty. Farming land relations were weighed down heavily by feudalism and colonialism elements. Up to 60 per cent of farming households possessed no land and were heavily exploited under double oppression, landlords and colonists.

Agriculture facilities were then crippled. During the 40 years since 1900, the country under the colonial regime witnessed 16 big dike bursts due to a lack of maintenance. The irrigation system could only water 15 per cent of farming land, meaning the rest depended on rainfall. Most of cultivated land reaped only one low-productivity paddy crop. Annual food output fell short of domestic demand while the colonists looted the crops to ship abroad millions of tonnes of rice. The country was then plagued with deaths from chronic hunger. Especially, in 1945, when Japanese colonists forced Vietnamese people to erase paddy fields for jute plants, the death-toll due to hunger was up to two million.

Industrial production was primitive with few hundreds of enterprises and 90,000 workers, primarily aimed at exploiting cheap labour and looting natural resources for the colonists.

In 2009, Vietnam’s economic  scale was a multi-fold jump against 1943. Agricultural value in 2009 was a 10.8-fold increase compared with 1943, paddy output a 7.9-fold rise and coffee value up 332 times. Food security was assured with the average per capita grain food output of more than 500 kilogrammes. Agriculture, getting way from merely paddy farming, has accommodated industrial crops, fruit trees, husbandry and aquaculture as well. Vietnam, thus, is now top exporters of commodities like rice, cashew, coffee, rubber, pepper, aquaculture and wood products.

Industrial values have surged by hundreds of times, electricity generation 764, clean coal 38 and cement 286 times.

Its estimated gross domestic product (GDP) in 2010 by comparative price is 2.1 times as large as 2000’s figure, nearly 4.2, 5.2, 7.1 and 7.2-fold rises against 1990, 1985, 1980 and 1976, respectively.

Vietnam’s economy has seen consecutive growths over the past 30 years, breaking the 23-year record of South Korea as of 1997 and only second to China with a 32-year record. Nowadays, domestic production not only satisfies domestic consumption. Savings account for 30 per cent of GDP. Since 2004, annual investment has been equivalent to more than 40 per cent of GDP. In 2007, the figure surged to 46.5 per cent, second only to China.

Economic structures have made significant leaps. In 1985, agriculture, forestry and aquaculture equaled 40.2 per cent of GDP while 2009’s tally was down to 20.7 per cent. The industrial and construction sectors’ stake surged from 27.4 per cent in 1985 to 39.73 per cent in 2009. The service sector’s figures are 32.5 and 39.1 per cent, respectively.

Exports in 2008 hit nearly $62.7 billion, a 267-fold increase against 1976. Exports accounted for 70.1 per cent of GDP, the world’s highest level.

More than 70 countries and territories have made direct investments in Vietnam. During 1988 to July, 2010, about $200 billion of foreign direct investment was registered in Vietnam of which $73.3 billion was disbursed. Committed official development assistance (ODA) since 1993 has reached nearly $63 billion of which about $26 billion was implemented. Forex reserves might be equivalent to 12 weeks of imports by the end of 2010.

Average GDP per capita in 2010 is around $1,138 as compared with $86 in 1988, lifting Vietnam from a low income country to the group of medium income nations.

On the social side, before the revolution, 90 per cent of the population was illiterate. On average, in 1943-1944, out of 10,000 people, only 327 attended school, mostly junior secondary education. The country then only had 3,000 vocational secondary school pupils and 1,200 undergraduates. Today, the number of people taking education has seen a 70-fold surge. The number of universities and colleges is 90 times higher. In 1943, the country only had 0.29 doctors and nurses for every 10,000 people. Now the figure has seen a 159.2-fold increase.

In 2009, Vietnam grappled with difficulties in economic expansion, investment, exports and creation of jobs due to the global economic crisis. But, the economy was not hit by the crisis as hard as its peers and rode out the crisis sooner than many others thanks to the government’s rational measures. Its second-quarter growth shown signs the country escaped the bottom zone to get away from the fourth crisis within the last 30 years.