Editor’s Note: Political Affairs editor Joe Sims spoke with Professor To Huy Rua, Vice Standing President of the Ho Chi Minh National Political Academy, Professor Nguyen Duc Binh, Dr. Luu Dat Thuyet, Director General of Department of International Cooperation and Dr. Ngo Huy Duc, interpreter and Deputy Director of the Institute of Political Sciences also all of the Ho Chi Minh National Political Academy.
PA: Can you describe the process of reform in Vietnam and what led you to initiate it?
CPV: Our reform and innovation process arose from the fact that we made some quite serious mistakes. The first mistake was a simplistic understanding of socialism. Vietnam was at best at the beginning of the transition period. At that time we wanted to build pure socialism instantly. This mistake is very obvious in our economic life. For example, we destroyed other economic sector in order to keep only two: the state and collective sector.
The second economic mistake was that we destroyed market relations. Other serious mistakes were made in management and social life. For example, the party’s life became bureaucratic. By that time our mechanism of economic management became bureaucratic, centralized and subsidized. Our socialism had become so-called state socialism, which means everything was concentrated in the state. This mistake was later viewed as dogmatism, voluntarism and subjectivism. These are the main reasons that led to the innovation.
However, the reform doesn’t only mean to fix mistakes but also while overcoming them, find a new way. We had to have new initiatives. Even if we didn’t make any mistakes, we should still have had a reform process continuing the innovation. So the innovation process is not only a process of fixing mistakes.
PA: You described your economic situation as being in the process of transition to socialism. Is that correct? How would you define Vietnam’s economy now? Is it a mixed economy, a socialist market economy? What is the scientific definition of the stage you’re at now?
CPV: Of course we don’t have a full and satisfactory definition of our economy, but we can define and identify some essential characteristics. Generally, speaking we define our economy as a complex [multi-sectoral] economy operating under the market mechanism with the management of the state with a socialistic orientation. This general definition can be sharpened as follows: a market economy with a socialistic orientation.
PA: Could you describe some of the accomplishments of the reform?
CPV: We have many clear achievements of the reform. These can be shown in the following three main points. The first is the very widespread participation of the people in the reform process. The second is Vietnam’s ability’s to participate in the international economy and in international activities. The third part is reflected in the economic indicators. After 10 years since 1986, Vietnam came out of crisis, inflation has decreased from 700 percent in 1986 to ten or 12 percent in 1995 and five percent for the last few years. The gross domestic product has risen to all-time highs. After 10 years, the average growth rate is 7.5 percent a year over the ten years since reform.
Before the reform we didn’t have enough of a supply of rice. But now we are the second or third largest rice exporter in the world. We export between three and four million tons of rice. That’s why we can have food security and can still export. The trade deficit also decreased from $2 billion to $1 million per year. Total foreign direct investment is $43 billion. So the results of the reform is that Vietnam now has a good atmosphere for investment. Our economic structure is also changing for industrialization. For example, before the reform, the agricultural sector accounted for the major part [of the economy], but now it only accounts for a minor part. This year the industrial sector accounted for 39 percent of the economy. We have had a two-digit growth rate of the industrial sector over the last ten years. The service sector accounts for about 38 percent. Last year agriculture accounted for about 23 percent. So we have a very rich and growing economic sector.
And after the reform it can also be seen that in terms of social indicators such as the living qualities of the people if compared with 1993, the per capita income increased two times. We have also had good achievements with the poverty rate. We reduced the poverty rate or poor households from 50 percent to about 10 percent at present. This was recognized by many international organizations. Despite the fact that our national income is not very high, we have a very high human development index (HDI) comparatively a much higher HDI.
We also have a policy of developing friendly relations with many countries. We worked under embargo, but now we have diversified relations, diplomatic relations with 167 countries, and we have trading relations with more than 100. We also have very good political stability. Vietnam was also recognized by international organizations as one of the most stable political environments.
The Communist Party as well has become more credible, and the people believe in the leadership of the Communist Party. Clearly, after more than 15 years of the reform, Vietnam is in a better position and has a good future.
