Vietnam’s Economic Development A presentation on Beeson and Pham’s 2012 paper: “Developmentalism with Vietnamese Characteristics: The Persistence of State-led Development in East Asia”

General Facts (from CIA World Factbook) Population = 95.3 million people 1% growth rate 2/3 of population is rural Two large cities Hanoi (North, 3.6 million) Ho Chi Minh City (South, 7.3 million) GDP = $595 billion (PPP) or $200 billion (exchange rate) 6 – 7% growth rate (!!!)

History (from Wikipedia) 2879 – 111 BC: Early Dynastic Epoch 111 BC – 939 AD: Dominated by China 939 – late 19th century AD: Late Dynastic Epoch French protectorate up to WWII 1946 – 1954: First Indochina War between France and Viet Minh, ends in Geneva Conference and division into North and South 1955 – 1975: Second Indochina War between South (backed by USA) and North (backed by USSR), ends in reunification as a socialist state.

Doi Moi (Renovation) Stagnant economy until 1986 and the CPV’s 6th National Congress Reforms to initiate a “socialist-oriented market economy” instead of a pure command economy State controls strategic sectors (such as oil and gas) but encourages private entities to engage in commodity production, etc. Causes: Decline of USSR Success of capitalist neighbors “internal contradictions” of command economy

Argument and Themes of the paper Use Vietnam as an example to demonstrate the surprising modern viability of state-led economic development in East Asia Central gov’t wants to maintain political stability, control Decentralization is carefully managed to retain CPV’s influence over political and economic activities

Mock Compliance International Financial Institutions (IFI’s) and foreign governments pressure Vietnam to make neo-liberal reforms Decentralization of tax system Privatization of state-owned enterprises (SOE’s) Vietnam appears to obey but subverts real decentralization

Tax System Central government decides how much tax revenue each subnational government gets to keep Redistribute tax revenue to underdeveloped or “strategically significant” provinces

Privatization of SOE’s 40% of GDP is still state-owned Strategically important sectors remain under state control Petrol Vietnam Most SOE’s that are privatized are small, local entities State-controlled commercial banks handle 75% of financial capital, allow central government to influence direction of economy by deciding which firms have access to loans

Foreign Aid Official Development Assistance is received and controlled by central government Generally unavailable to local governments for local projects