|Cộng hòa Xã hội Chủ nghĩa Việt Nam|
|Flag||Coat of Arms|
|Government||Socialist Republic (communist)|
|President||Truong Tan Sang|
|Prime minister||Nguyễn Tấn Dũng|
|Area||128,065 sq mi|
|GDP 2006||$262.5 billion|
|GDP per capita||$3,100 (2006)|
- 1 People
- 2 Government and Political Conditions
- 3 Economy
- 4 History
- 5 See also
- 6 References
Originating in what is now southern China and northern Vietnam, the Vietnamese people pushed southward over 2 millennia to occupy the entire eastern seacoast of the Indochinese Peninsula. Ethnic Vietnamese constitute about 90% of Vietnam's population.
Vietnam's approximately 2.3 million ethnic Chinese, concentrated mostly in southern Vietnam, constitute Vietnam's largest minority group. Long important in the Vietnamese economy, Vietnamese of Chinese ancestry have been active in rice trading, milling, real estate, and banking in the south and shop keeping, stevedoring, and mining in the north. Restrictions on economic activity following reunification of the north and south in 1975 and the subsequent but unrelated general deterioration in Vietnamese-Chinese relations sent chills through the Chinese-Vietnamese community. In 1978-79, some 450,000 ethnic Chinese left Vietnam by boat as refugees (many officially encouraged and assisted) or were expelled across the land border with China.
The second-largest ethnic minority grouping, the central highland peoples (formerly termed Montagnards or mountain people), comprise two main ethnolinguistic groups--Malayo-Polynesian and Mon-Khmer. About 30 groups of various cultures and dialects are spread over the highland territory.
The third-largest minority, the Khmer Krom (Cambodians), numbering about 600,000, is concentrated near the Cambodian border and at the mouth of the Mekong River. Most are farmers. Other minority groups include the Cham--remnants of the once-mighty Champa Kingdom, conquered by the Vietnamese in the 15th century--Hmong, and Thai.
Vietnamese is the official language of the country. It is a tonal language with influences from Thai, Khmer, and Chinese. Since the early 20th century, the Vietnamese have used a Romanized script introduced by the French. Previously, Chinese characters and an indigenous phonetic script were both used.
- Population (2007 estimate): 85.2 million.
- Annual growth rate (2007 estimate): 1.004%.
- Ethnic groups: Vietnamese (85%-90%), Chinese (3%), Hmong, Thai, Khmer, Cham, mountain groups.
- Religions: Buddhism, Hoa Hao, Cao Dai, Christian (predominantly Roman Catholic, some Protestant), animism, Islam.
- Languages: Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and Khmer, mountain area languages.
- Education (2004): Literacy--90.3%.
- Health (2007 estimate): Birth rate—16.63 births/1000 population. Infant mortality rate--17.4 /1000. Life expectancy--70.8 yrs. Death rate--6.56/1,000.
More than half of the population is at least nominally Buddhist (the "Light of Asia" spread very early in the country; from the beginning of the second century of the Christian era) . The Roman Catholic Church comprises 8 to 10%, several Cao Dai organizations comprise 1.5 to 3%, the primary Hoa Hao organization 1.5 to 4%, Protestant denominations 0.5 to 2%, and one Muslim organization less than 0.1% of the population. Most other citizens consider themselves nonreligious, although many practice traditional beliefs such as veneration of ancestors and national heroes.
Many Buddhists practice an amalgam of Mahayana Buddhism, Taoism, and Confucianism that is sometimes called the "triple religion." The CRA cited an estimate of 10 million (12% of the population) practicing Mahayana Buddhists, most of whom are members of the ethnic Kinh majority and found throughout the country, especially in the populous areas of the northern and southern delta regions. There are proportionately fewer Buddhists in certain highland areas, although migration of Kinh to these areas is changing this distribution. A Khmer ethnic minority in southern Vietnam practices Theravada Buddhism. Numbering more than 1 million, they live almost exclusively in the Mekong Delta. In 1981 the officially sanctioned Vietnam Buddhist Sangha (VBS) was established. The Government does not recognize the legitimacy of the Unified Buddhist Church of Vietnam (UBCV).
There are an estimated 8 million Catholics in the country, although government statistics place the number at 5.9 million. Catholics live throughout the country, but the largest concentrations remain in the southern provinces around Ho Chi Minh City, in parts of the Central Highlands, and in the provinces southeast of Hanoi. Catholicism has revived in many areas in recent years, with newly rebuilt or renovated churches and growing numbers of people who want to be religious workers.
Government statistics put the number of Cao Dai at 2.3 million, although Cao Dai officials routinely claim as many as 5 million adherents. Cao Dai groups are most active in Tay Ninh Province, where the Cao Dai "Holy See" is located, in Ho Chi Minh City, and throughout the Mekong Delta. There are many separate groups within the Cao Dai religion; the largest is the Tay Ninh sect, which represents more than half of all Cao Dai believers. Cao Dai is syncretistic, combining elements of many faiths.
According to the Government, there are 1.2 million Hoa Hao followers; affiliated expatriate groups estimate that there may be up to 3 million adherents. Hoa Hao followers are concentrated in the Mekong Delta, particularly in provinces such as An Giang and Dong Thap, where the Hoa Hao were dominant as a social, political, and military force before 1975. The government-recognized Hoa Hao Administrative Committee (HHAC) was organized in 1999. Some Hoa Hao belong to other sects that oppose the HHAC.
The two largest officially recognized Protestant churches are the Southern Evangelical Church of Vietnam (SECV or ECVN-S) and the smaller Evangelical Church of Vietnam North (ECVN). The Grace Baptist Church and the United World Mission are also officially recognized. A growing number of other Protestant denominations are also present, including the Vietnam Mennonite Church, the Vietnam Presbyterian Church, and the Vietnam Seventh-day Adventist Church (all officially registered), as well as others yet to be registered. Estimates of the number of Protestants ranged from government figures of 610,000 to claims by churches of more than 1.6 million. There were estimates that the growth of Protestant believers has been as much as 600% over the past decade. Some new converts belong to unregistered evangelical house churches. Based on adherents' estimates, two-thirds of Protestants are members of ethnic minorities, including minority groups in the Northwest Highlands (H'mong, Dzao, Thai, and others) and in the Central Highlands (Ede, Jarai, and Mnong, among others).
Mosques serving the small Muslim population, estimated at between 50,000 to 80,000 people, operate in Ho Chi Minh City, Hanoi, western An Giang Province, and provinces in the southern coastal area. The Government officially estimates there are 67,000 Muslim believers. The Muslim community is composed mainly of ethnic Cham, although in Ho Chi Minh City and An Giang Province it includes some ethnic Kinh and migrants originally from Malaysia, Indonesia, and India. Approximately half of the Muslims are Sunnis; the other half practice Bani Islam, a type of Islam unique to the ethnic Cham who live on the south-central coast.
There are several smaller religious communities, the largest of which is the Hindu community. Approximately 50,000 ethnic Cham in the south-central coastal area practice a devotional form of Hinduism. Another 4,000 Hindus live in Ho Chi Minh City; some are ethnic Cham, but most are Indian or of mixed Indian-Vietnamese descent.
There are approximately 800 hundred members of the Church of Jesus Christ of Latter-day Saints (Mormons) throughout the country, but primarily in Ho Chi Minh City and Hanoi.
At least ten active but unregistered congregations of Jehovah's Witnesses operate in the country, each reportedly with several hundred members. Most of the congregations are in the south, with five in Ho Chi Minh City.
At least 14 million citizens constituting 17% or more of the population reportedly do not practice any organized religion. Other sources strictly define those whose activities are limited to visiting pagodas on ceremonial holidays to not be practicing Buddhists. Using this stricter definition, the number of nonreligious people in the country would be much higher, perhaps as many as 50 million. No statistics were available on the level of participation in formal religious services, but it was generally acknowledged that this number has been increasing since the early 1990s.
Ethnic minorities constitute approximately 14% of the population. They historically practice different traditional beliefs than those of the majority Kinh. Many ethnic minorities, particularly among the H'mong, Dao, and Jarai groups in the Northwest and Central Highlands, have converted to Protestantism.
The Government does not officially favor a particular religion. Virtually all senior government and CPV officials, as well as the vast majority of National Assembly delegates, are formally "without religion." However, many party and government officials openly practice traditional ancestor worship, and some visit Buddhist pagodas. The prominent traditional position of Buddhism does not adversely affect religious freedom for others, including those who do not practice a religion.
The Government officially recognizes Buddhist, Catholic, Protestant, Hoa Hao, Cao Dai, Baha’i, Muslim, and Pure Land Buddhist Home Practice. Individual congregations within each registered or recognized group established after the legal framework took effect must also be registered. Practitioners of alternative Buddhist, Protestant, Hoa Hao, and Cao Dai groups do not participate in the government-recognized/registered religious organizations.
The Government does not permit religious instruction in public schools; however, it permits clergy to teach at universities in subjects in which they are qualified. Buddhist monks have lectured at the Ho Chi Minh Political Academy, the main Communist Party school. Several Catholic nuns and at least one Catholic priest teach at Ho Chi Minh City universities. They are not allowed to wear religious dress when they teach or to identify themselves as clergy. Catholic, Protestant, Muslim, and Buddhist groups are allowed to provide religious education to children. Catholic religious education, on weekends or evenings, is permitted in most areas and has increased in recent years in churches throughout the country. Khmer Theravada Buddhists and Cham Muslims regularly hold religious and language classes outside of normal classroom hours in their respective pagodas and mosques. Religious groups are not permitted to operate independent schools beyond preschool and kindergarten. Atheism is not officially taught in schools.
Government and Political Conditions
A new state constitution was approved in April 1992, reaffirming the central role of the Communist Party of Vietnam (CPV) in politics and society, and outlining government reorganization and increased economic freedom. Though Vietnam remains a one-party state, adherence to ideological orthodoxy has become less important than economic development as a national priority.
The most important powers within the Vietnamese Government--in addition to the Communist Party--are the executive agencies created by the 1992 constitution: the offices of the president and the prime minister. The Vietnamese President, presently Nguyen Minh Triet, functions as head of state but also serves as the nominal commander of the armed forces and chairman of the Council on National Defense and Security. The Prime Minister of Vietnam, presently Nguyen Tan Dung, heads a cabinet currently composed of three deputy prime ministers and the heads of 26 ministries and commissions, all confirmed by the National Assembly.
Notwithstanding the 1992 constitution's reaffirmation of the central role of the Communist Party, the National Assembly, according to the constitution, is the highest representative body of the people and the only organization with legislative powers. It has a broad mandate to oversee all government functions. Once seen as little more than a rubber stamp, the National Assembly has become more vocal and assertive in exercising its authority over lawmaking, particularly in recent years. However, the National Assembly is still subject to party direction. More than 80% of the deputies in the National Assembly are party members. The assembly meets twice yearly for 7-10 weeks each time; elections for members are held every 5 years, although its Standing Committee meets monthly and there are now over 100 "full-time" deputies who function on various committees. There is a separate judicial branch, but it is still relatively weak. Overall, there are few lawyers and trial procedures are rudimentary.
The present 14-member Politburo, elected in April 2006 and headed by Communist Party General Secretary Nong Duc Manh, determines government policy, and its Secretariat oversees day-to-day policy implementation. In addition, the Party's Central Military Commission, which is composed of select Politburo members and additional military leaders, determines military policy.
A Party Congress, which most recently was comprised of 1,176 delegates at the Tenth Party Congress in April 2006, meets every 5 years to set the direction of the party and the government. The 160-member Central Committee (with an additional 21 alternate members), was elected by the Party Congress and it usually meets at least twice a year.
Principal Government Officials
- President--Truong Tan Sang
- Prime Minister--Nguyen Tan Dung
- National Assembly Chairman--Nguyen Phu Trong
- Deputy Prime Minister and Minister of Foreign Affairs--Pham Gia Khiem
- Ambassador to the United States--Nguyen Tam Chien
- Ambassador to the United Nations--Le Luong Minh
Tenth Party Congress Politburo, named April 25, 2006; listed in the order it was announced, including the individuals’ current positions:
- General Secretary of CPV Central Committee, 10th Party Congress--Nong Duc Manh
- Minister of Public Security--Le Hong Anh
- Prime Minister--Nguyen Tan Dzung
- State President--Nguyen Minh Triet
- Standing Secretariat Member--Truong Tan Sang
- National Assembly Chairman--Nguyen Phu Trong
- Deputy Prime Minister and Minister of Foreign Affairs--Pham Gia Khiem
- Minister of Defense, General Chief of Staff--Phung Quang Thanh
- Deputy Prime Minister and Chairman, Party Internal Affairs Commission--Truong Vinh Trong
- Secretary of HCMC Party's Committee--Le Thanh Hai
- Standing Deputy Prime Minister--Nguyen Sinh Hung
- Secretary of Hanoi Party's Committee--Pham Quang Nghi
- Chairman, Party Organization and Personnel Commission--Ho Duc Viet
- Chairman, Party Control Commission--Nguyen Van Chi
During the second Indochina war (1954-75), North Vietnam balanced relations with its two major allies, the Soviet Union and China. By 1975, tension began to grow as Beijing increasingly viewed Vietnam as a potential Soviet instrument to encircle China. Meanwhile, Beijing's increasing support for Cambodia's Khmer Rouge sparked Vietnamese suspicions of China's motives.
Vietnamese-Chinese relations deteriorated significantly after Hanoi instituted a ban in March 1978 on private trade, mostly affecting Sino-Vietnamese. Following Vietnam's December 1978 invasion of Cambodia, China launched a retaliatory incursion over Vietnam's northern border. Faced with severance of Chinese aid and strained international relations, Vietnam established even closer ties with the Soviet Union and its allies in the Council for Mutual Economic Assistance (Comecon). Through the 1980s, Vietnam received nearly $3 billion a year in economic and military aid from the Soviet Union and conducted most of its trade with that country and with other Council for Mutual Economic Assistance countries. However, Soviet and East bloc economic aid ceased after the breakup of the Soviet Union.
Vietnam did not begin to emerge from international isolation until it withdrew its troops from Cambodia in 1989. Within months of the 1991 Paris Agreements, Vietnam established diplomatic and economic relations with ASEAN as well as with most of the countries of Western Europe and Northeast Asia. China reestablished full diplomatic ties with Vietnam in 1991, and the two countries continue their joint efforts to demarcate their land and sea borders, expand trade and investment ties, and build political relations.
In the past decade, Vietnam has recognized the increasing importance of growing global economic interdependence and has made concerted efforts to adjust its foreign relations to reflect the evolving international economic and political situation in Southeast Asia. The country has begun to integrate itself into the regional and global economy by joining international organizations. Vietnam has stepped up its efforts to attract foreign capital from the West and regularize relations with the world financial system. In the 1990s, following the lifting of the American veto on multilateral loans to the country, Vietnam became a member of the World Bank, the International Monetary Fund, and the Asian Development Bank. The country has expanded trade with its East Asian neighbors as well as with countries in Western Europe and North America. Of particular significance was Vietnam's acceptance into the Association of Southeast Asian Nations (ASEAN) in July 1995. Vietnam joined the Asia-Pacific Economic Cooperation forum (APEC) in November 1998 and hosted the ASEAN summit in 2001 and APEC in 2006. Vietnam is seeking to join the United Nations Security Council as a non-permanent member for the 2008 and 2009 term.
While Vietnam has remained relatively conflict-free since its Cambodia days, tensions have arisen in the past between Vietnam and its neighbors (especially China). Vietnam and China each assert claims to the Spratly Islands (as does Taiwan), an archipelago in a potentially oil-rich area of the South China Sea. Over the years, conflicting claims have produced small-scale armed altercations in the area; in 1988 more than 70 people were killed during a confrontation between China and Vietnam. China's assertion of control over the Spratly Islands and the entire South China Sea has elicited concern from Vietnam and its Southeast Asia neighbors. The territorial border between the two countries is being definitively mapped pursuant to a Land Border Agreement signed in December 1999, and an Agreement on Borders in the Gulf of Tonkin signed in December 2000. Vietnam and Russia declared a strategic partnership in March 2001 during the first visit ever to Hanoi of a Russian head of state, largely as an attempt to counterbalance the People's Republic of China's (P.R.C.) growing profile in Southeast Asia.
Relations with the United States
After a 20-year hiatus of severed ties, President Clinton announced the formal normalization of diplomatic relations with Vietnam on July 11, 1995. Subsequent to President Clinton's normalization announcement, in August 1995, both nations upgraded their Liaison Offices opened during January 1995 to embassy status. As diplomatic ties between the nations grew, the United States opened a consulate general in Ho Chi Minh City, and Vietnam opened a consulate in San Francisco.
U.S. relations with Vietnam have become deeper and more diverse in the years since political normalization. The two countries have broadened their political exchanges through regular dialogues on human rights and regional security. They signed a Bilateral Trade Agreement in July 2000, which went into force in December 2001. In 2003, the two countries signed a Counternarcotics Letter of Agreement (amended in 2006), a Civil Aviation Agreement, and a textile agreement.
As of November 2, 2006, the U.S. Government listed 1,796 Americans unaccounted for in Southeast Asia, including 1,373 in Vietnam. Since 1973, 850 Americans have been accounted for, including 608 in Vietnam. Additionally, the Department of Defense has confirmed that of the 196 individuals who were "last known alive" (LKA), the U.S. Government has determined the fate of all but 31. The United States considers achieving the fullest possible accounting of Americans missing and unaccounted for in Indochina to be one of its highest priorities with Vietnam.
Since entry into force of the U.S.-Vietnam Bilateral Trade Agreement on December 10, 2001, increased trade between the U.S. and Vietnam, combined with large-scale U.S. investment in Vietnam, evidence the maturing U.S.-Vietnam economic relationship. In 2006, the United States exported $1.1 billion of goods to Vietnam and imported $8.6 billion of goods from Vietnam. Similarly, U.S. companies continue to invest directly in the Vietnamese economy. During 2006, the U.S. private sector committed $444 million to Vietnam in foreign direct investment. This number is expected to rise dramatically following Vietnam's accession into the WTO.
Another sign of the expanding bilateral relationship is the signing of a Bilateral Air Transport Agreement in December 2003. Several U.S. carriers already have third-party code sharing agreements with Vietnam Airlines. Direct flights between Ho Chi Minh City and San Francisco began in December 2004. Vietnam and the United States also signed a bilateral Maritime Agreement in March 2007 that opened the maritime transport and services industry of Vietnam to U.S. firms.
Cooperation in other areas, such as defense, nonproliferation, counterterrorism, and law enforcement, is also increasing at a measured pace.
Economic stagnation marked the period after reunification from 1975 to 1985. In 1986, the Sixth Party Congress approved a broad economic reform package called "Doi Moi" (renovation) that introduced market reforms and dramatically improved Vietnam's business climate. Vietnam became one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003. In 2004-2005, GDP grew over 8% annually. Vietnam's inflation rate, as measured by the consumer price index, which stood at an annual rate of over 300% in 1987, was below 4% from 1997 (except in 1998 when it rose to 9.2%) until 2003. However, in 2004 the consumer price index increased to 9.5%, dropping in 2006 to 7.5%. Average annual foreign investment commitment has risen sharply as a result of the U.S.-Vietnam Bilateral Trade Agreement and Vietnam's drive toward membership in the World Trade Organization (WTO). In 2007, investment commitment is expected again to reach $10 billion, matching the $10 billion level of 2006. The average Vietnamese savings rate is about 30%. From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world's second-largest exporter of rice.
- GDP (2006): $61 billion.
- Real growth rate (2006): 8.2%.
- Per capita income (2006): $726.
- Inflation rate (2006): 7.5%.
- External debt (2005): 32.5% of GDP, $17.2 billion.
- Natural resources: Coal, crude oil, zinc, copper, silver, gold, manganese, iron.
- Agriculture and forestry (20.4% of GDP, 2006): Principal products--rice, maize, sweet potato, peanut, soya bean, cotton, coffee, cashews. Cultivated land--12.2 million hectares. Land use--21% arable; 28% forest and woodland; 51% other.
- Industry and construction (41.5% of GDP, 2006): Principal types--mining and quarrying, manufacturing, electricity, gas, water supply, cement, phosphate, and steel.
- Services (38.1% of GDP, 2006): Principal types--wholesale and retail, repair of vehicles and personal goods, hotel and restaurant, transport storage, telecommunications, tourism.
- Trade (2006): Exports--$39.6 billion. Principal exports--garments/textiles, crude oil, footwear, rice (second-largest exporter in world), sea products, coffee, rubber, handicrafts. Major export partners--U.S., EU, Japan, China, Singapore, Australia, Taiwan, and Germany. Imports--$44.4 billion. Principal imports--machinery, oil and gas, garment materials, iron and steel, transport-related equipment. Major import partners--China, Japan, Singapore, Taiwan, South Korea, Hong Kong, and Thailand. Exports to U.S. (2006)--$8.6 billion. Imports from U.S. (2006) $1.1 billion.
Foreign trade and foreign direct investment have improved significantly. The shift away from a centrally planned economy to a more market-oriented economic model improved the quality of life for many Vietnamese. Per capita income, $220 in 1994, rose to $726 in 2006 with a related reduction in the share of the population living in acute poverty. However, regional differences in average income are wide: $726 for the whole country on average but about $1,800 in Ho Chi Minh City and much lower than average in poorer provinces of the central and northern highlands.
The East Asian financial crisis in the late 1990s slowed the pace of economic growth that marked the earlier part of the decade. While a return to pre-crisis levels of growth and development has been slow, the pace has picked up in recent years, primarily as the result of ongoing economic and trade liberalization. Vietnam's economic stance following the East Asian financial crisis first emphasized macroeconomic stability, then shifted its focus toward growth. While the country has moved toward a more market-oriented economy, the Vietnamese Government still holds a tight rein over major sectors of the economy through large state-owned enterprises and the banking system. The launch of the State Capital Investment Corporation at the end of 2005 is intended to make state-owned enterprises operate more competitively. The government has plans to reform key sectors and privatize state-owned enterprises, but implementation has been gradual. Greater emphasis on private sector development is critical for job creation. Urban unemployment has been rising in recent years, and rural unemployment, estimated to be between 25% and 35% during non-harvest periods, is already at critical levels.
The December 10, 2001, entry-into-force of the Bilateral Trade Agreement (BTA) between the U.S. and Vietnam was a significant milestone for Vietnam's economy and for normalization of U.S.-Vietnam relations. Implementation of this agreement, which includes provisions on trade in goods, trade in services, enforcement of intellectual property rights, protection for investments, and transparency, fundamentally changed Vietnam’s trade regime and helped liberalize its economy. By virtue of the BTA, normal trade relations (NTR) status was accorded to Vietnam on a conditional basis. Bilateral trade between the two countries expanded dramatically, rising more than five-fold from 2001 to $9.6 billion in 2006.
By requiring a range of reforms to Vietnam's trade and investment regime, the BTA also helped Vietnam prepare for the next major step in its integration into the world economy: membership in the WTO. Following the conclusion of bilateral negotiations with interested WTO members and completion of multilateral negotiations in 2006, the WTO General Council approved the terms for Vietnam's membership on November 7, 2006. Vietnam formally acceded to the WTO as its 150th member on January 11, 2007. Vietnam was granted unconditional normal trade relations (NTR) status by the United States through a Presidential Proclamation signed by President Bush on December 29, 2006. On January 11, 2007 the United States removed the application of quotas on textile and apparel imports from Vietnam consistent with the terms of our WTO bilateral market access agreement and treatment provided other WTO members. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations. As a result, foreign investors and those seeking to sell goods and services to the increasingly affluent Vietnamese population will benefit from the improved legislative framework and lower trade barriers. Local firms that have heretofore enjoyed a range of protections, meanwhile, will experience increased competition. As 2006 drew to a close, the Government of Vietnam reasserted its goal of becoming a middle-income country by 2010. That would entail raising the average per capita income to at least $1,000 from the 2006 average of $726. Economic analysts, including those at the World Bank, believe that this goal is attainable.
Agriculture and Industry
Land reform, de-collectivization, and the opening of the agricultural sector to market forces converted Vietnam from a country facing chronic food shortages in the early 1980s to the second-largest rice exporter in the world. Besides rice, key exports are coffee, tea, rubber, and fisheries products. Agriculture's share of economic output has declined, falling as a share of GDP from 42% in 1989 to 20.4% in 2006, as production in other sectors of the economy has risen.
Paralleling its efforts to increase agricultural output, Vietnam’s industrial production has grown. Industry contributed 41.5% of GDP in 2006, up from 27.3% in 1985. State-owned enterprises are marked by low productivity and inefficiency, the result of a command-style economic system applied in an underdeveloped country. Foreign direct investment (FDI) is a dynamic feature of Vietnam's industrializing economy. As of the end of 2005, cumulative implemented foreign direct investment totaled over $34 billion, helping to transform the industrial landscape of Vietnam.
Vietnam has successfully increased exports of manufactured goods, especially labor-intensive manufactures, such as textiles and apparel and footwear. Subsidies have been cut to some inefficient state enterprises. The Government is also in the process of "equitizing" (e.g., transforming state enterprises into share holding companies and distributing a portion of the shares to management, workers and private foreign and domestic investors) a significant number of state enterprises. However, to date the government continues to maintain control of the largest and most important companies. Despite reforms, the state share of GDP has remained relatively constant since 2000, at 38-39%.
Trade and Balance of Payments
From the late 1970s until the 1990s, Vietnam was heavily dependent on the Soviet Union and its allies for trade and economic assistance. To compensate for drastic cuts in Soviet-bloc support after 1989, Vietnam liberalized trade, devalued its exchange rate to increase exports, and embarked on a policy of regional and international economic re-integration. Vietnam has demonstrated its commitment to trade liberalization in recent years, and integration with the world economy has become one of the cornerstones of its reform program. Vietnam has locked in its intention to create a more competitive and open economy by committing to several comprehensive international trade agreements, including the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) and the U.S.-Vietnam Bilateral Trade Agreement (BTA). Vietnam's accession to the World Trade Organization will further integrate Vietnam into the global economy.
As a result of these reforms, exports expanded significantly, growing by as much as 20%-30% in some years. In 2005, exports accounted for 63% of GDP. Imports have also grown rapidly, and Vietnam has a significant trade deficit (forecast to be $4.8 billion in 2006). Vietnam’s total external debt, accounting for 32.5% of GDP in 2005, was estimated at around $17.2 billion.
Vietnam's identity has been shaped by long-running conflicts, both internally and with foreign forces. In 111 BC, China's Han dynasty conquered northern Vietnam's Red River Delta and the ancestors of today's Vietnamese. Chinese dynasties ruled Vietnam for the next 1,000 years, inculcating it with Confucian ideas and political culture. In 939 AD, Vietnam achieved independence under a native dynasty. After 1471, when Vietnam conquered the Champa Kingdom in what is now central Vietnam, the Vietnamese moved gradually southward, finally reaching the rich Mekong Delta, encountering there earlier settled Cham and Cambodians. While Vietnam's emperors reigned ineffectually, powerful northern and southern families fought civil wars in the 17th and 18th centuries.
French Rule and the Anti-Colonial Struggle
In 1858, the French began their conquest of Vietnam starting in the south. They annexed all of Vietnam in 1885, but allowed Vietnam's emperors to continue to reign, although not actually to rule. In the early 20th century, French-educated Vietnamese intellectuals organized nationalist and communist-nationalist anti-colonial movements.
Japan's occupation of Vietnam during World War II further stirred nationalism. Vietnamese communists under Ho Chi Minh organized a coalition of anti-colonial groups, the Viet Minh, though many anti-communists refused to join. After Japan stripped the French of much power in Indochina in March 1945, Ho Chi Minh announced the independence of the Democratic Republic of Vietnam on September 2, 1945.
North and South Partition
France's post-World War II unwillingness to leave Vietnam led to failed talks and an 8-year guerrilla war between the communist-led Viet Minh on one side and the French and their anti-communist nationalist allies on the other. Following a humiliating defeat at Dien Bien Phu in May 1954, France and other parties, including Britain, China, the Soviet Union, and the United States, convened in Geneva, Switzerland for peace talks. On July 29, 1954, an Agreement on the Cessation of Hostilities in Vietnam was signed between France and the Democratic Republic of Vietnam. The United States observed, but did not sign, the agreement. French colonial rule in Vietnam ended.
The 1954 Geneva agreement provided for a cease-fire between communist and anti-communist nationalist forces, the temporary division of Vietnam at approximately the 17th parallel, provisional northern (communist) and southern (noncommunist) zone governments, and the evacuation of anti-communist Vietnamese from northern to southern Vietnam. The agreement also called for an election to be held by July 1956 to bring the two provisional zones under a unified government. However, the South Vietnamese Government refused to accept this provision. On October 26, 1955, South Vietnam declared itself the Republic of Vietnam.
After 1954, North Vietnamese communist leaders consolidated their power and instituted a harsh agrarian reform and socialization program. In the late 1950s, they reactivated the network of communist guerrillas that had remained behind in the south. These forces--commonly known as the Viet Cong--aided covertly by the north, started an armed campaign against officials and villagers who refused to support the communist reunification cause.
American Assistance to the South
In December 1961, at the request of South Vietnamese President Ngo Dinh Diem, President Kennedy sent U.S. military advisers to South Vietnam to help the government there deal with the Viet Cong campaign. In the wake of escalating political turmoil in the south after a 1963 generals' coup against President Diem, the United States increased its military support for South Vietnam. In March 1965, President Johnson sent the first U.S. combat forces to Vietnam. The American military role peaked in 1969 with an in-country force of 534,000. However, the Viet Cong's surprise Tet Offensive in January 1968 deeply hurt both the Viet Cong infrastructure and American and South Vietnamese morale. In January 1969, the United States, governments of South and North Vietnam, and the Viet Cong met for the first plenary session of peace talks in Paris, France. These talks, which began with much hope, moved slowly. They finally concluded with the signing of a peace agreement, the Paris Accords, on January 27, 1973. As a result, the south was divided into a patchwork of zones controlled by the South Vietnamese Government and the Viet Cong. The United States withdrew its forces, although U.S. military advisers remained.
In early 1975, North Vietnamese regular military forces began a major offensive in the south, inflicting great damage to the south's forces. The communists took Saigon on April 30, 1975, and announced their intention of reunifying the country. The Democratic Republic of Vietnam (north) absorbed the former Republic of Vietnam (south) to form the Socialist Republic of Vietnam on July 2, 1976.
After reunification, the government confiscated privately owned land and forced citizens into collectivized agricultural practices. Hundreds of thousands of former South Vietnamese Government and military officials, as well as intellectuals previously opposed to the communist cause, were sent to re-education camps to study socialist doctrine.
While Vietnamese leaders thought that reunification of the country and its socialist ransformation would be condoned by the international community, this did not happen. Besides international concern over Vietnam's internal practices, the Vietnamese invasion of Cambodia in 1978 and its growing tight alliance with the Soviet Union appeared to confirm suspicions that Vietnam wanted to establish hegemony in Indochina.
Vietnam's invasion of Cambodia also heightened tensions that already existed between Vietnam and China. Beijing, which had long backed the Khmer Rouge regime in Cambodia, retaliated in early 1979 by initiating a border war with Vietnam.
Vietnam's tensions with its neighbors and its stagnant economy contributed to a massive exodus from Vietnam. Fearing persecution, many Chinese in particular fled Vietnam by boat to nearby countries. Later, hundreds of thousands of other Vietnamese nationals fled as well, seeking temporary refuge in camps throughout Southeast Asia.
The continuing grave condition of the economy and the alienation from the international community became focal points of party debate. In 1986, at the Sixth Party Congress, there was an important easing of communist agrarian and commercial policies.
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