Doi Moi and the Achievement of the Vietnam Government.

INTRODUCTION Vietnam has been govern by the communist party since Vietnam Communist Party win the third Indochina war and officially the Vietnmam is known as Socialist Republic of Vietnam. Vietnam havw 89 million of population in the world and become the 13th most populous country in the world. By then end of Cold War, the communist system of government become unpopular compared to the capitalist and democratic type of government. This is because the socialist government seems failed to generate wealth and to help development of economy of their people. Vietnam is one of the examples where the people not even have enough food to consume and experienced unemployment and underemployment. More than two thousand state own enterprise failed to generates its economy. Therefore the leadership of the communist party realize that there is something that the government should do to change the degradation of citizens quality of life and its economy. The Doi Moi which means renovation had successfully reformed a huge part of the economy of its people and they are moving faster. This economic achievement is might be one of the strongest reasons why the Vietnam still can survive with its socialist masked capitalist economic system.

MAIN IDEA 1. What is Doi Moi? Vietnam has started with the socialist development economy with the state centered economic planned after the reunification of North and South Vietnam in 1975. The socialist economy planned managed state ownership as the means of production and even agriculture are organized into state farm and the government will decide what types of crops that peasant and farmers would grow. (Ronna and Sjoberg,1991 in T.Sarah and Phuang An Nguyen , 2005 p.1694). Vietnam was still poor in 1986 where food are rationed ,rice was imported to avoid famine, and inflation ran up 100 percent annually. Nearly all the six thousand of state own company (SOE) lost money. Also not to mention, the occupation of Cambodia also took place in the bad economic shape of Vietnam. (Lawrence.E. 2006.p.154). However the series of failure of socialist types economy get worst when it was combined with the American embargo (because of communistr bloc) , border conflict with China , the occupation of Cambodia from 1979 1989 , weaken the USSR economy and brings to very serious macroeconomic imbalance (Irvin ,1995 in T.Sarah and Phuang An Nguyen , 2005 p.1694), that led to instability of economy and society and definetly will effect the government that hold power in Vietnam particularly , Vietnamese Communist Party. Doi Moi Is an economy revolution that took place in 1985 after the failure of communist system of economy in Vietnam. After the renovation the farmer can choose which crops they wanted to grow and what business they wanted to make. It was the initiative from the government to change from the centrally planned system to a market oriented system with a multisectoral economic structure and a multiownership system. The revolution made gave a major positive impact on the enterprise with the Studies of Ying Zhu et all. By taking example of
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32 companies that shows improvement since the implementation of Doi Moi in Vietnam. (Ying Zhu et.all. 2008,p. 158) . Doi Moi is the comprehensive government program that remarkably manage to move Vietnam economy from stagnant to reasonable stable GDP around 8 percent in the mid 1990s. From the Doi Moi program the poverty has been reduced by one third in the first ten years of the implementation of Doi Moi. Beside that government of Vietnam also

successfully increase the public facilities, health program, clean water supply and school for the people in Vietnam. (UNDP 1996 cited by A.koko and F.Sjoholm 2000 p. 258). Amazingly because of Doi Moi ,Vietnam survived the South East Asia regional crysis in 1997-1998 and still in the club of healthy state. Vietnam is still running with the Doi Moi style of economic with the leaders adapt and learn how to survive not only changing in the domestic pressure but also in the aspect on international relation. (M.Beresford,2008.p. 226). Doi Moi has created a capitalist economy that change Hanoi from the agrarians city to cosmopolitans with the young entrepreneurs are making business that is different from what their fathers are doing a few years back.

2. How the Doi Moi was Formed? Doi Moi is the Reform within the limits. When the delegates to the 6th National Party Congress met in December 1986, the main objective is to rejuvenate or refresh the leaders in the party. This is because even thought Ho Chin Minh had passed in 1969,but the other friends of Old leader in the Politburo was still in power for a long time .For example ,Le Duan who has been elected as Secretary General, hold power in offices for another 26 years after the revolution. Even after they resigned the group of old leaders still plays their role as advisor and make hard

for the later generation to make a renovation of the economy. However after the death of the Le Duan died, change happen. It was not until the Pham Hung died, that premiership passed out of the hands of first generation to Vo Van Kiet ,then later to a co-member of the Politburo class of 1976,Do Muoi. (James W.Moreley,1921,p.15-17) .After the death of all the old leaders then the serious renovation of Vietnam began. According to Susan Daly, the Stalinist type of economy implemented by the government of Vietnam (which is Communist Regime) cannot feed their own people. In 1986 Vietnam has to Import 1.6 Million tons of rice to feed the people. Vietnamese are starving and suffer. Economic Plan has started to take place from planned economy to market economy with some rules of socialist. Before the countries lead themselves towards Industrialization nation, they must be able to supply agricultural product. According to Bruce Johnston and John Mellor (1965) a strong and dynamic agricultural sector would be a key factor in supporting industrial development and can trigger a rapid growth and prosper the economy. (B.Johnston & J.Mellor 1985). This might related with the human force that are needed to be as labor in the new factory when the economy liberalization occurs. Agriculture must move side by side with the industrial development. Just like what Lynellyn D. Long wrote in his paper mention that: In 1989, prices (for rice exports) were determined by the world prices on the international market and Vietnam effectively opened its doors to international trade. The official exchange rate was also depreciated. In one year, Vietnam shifted from being a rice importer to becoming a major rice exporter. (lynellly .D.Long, 2000, p.5)

Therefore we can see that how important and significant the Doi Moi renovation in Vietnam and become the paradigm shift in a very short time. The economy situation of Vietnam is getting better in late 1980s. Therefore to overcome the socioeconomic crisis, the Sixth National

Congress made a comprehensive renovation of the countrys economic system. Some of the important resolution was Party Politburo Resolution 10 in April 1988 on Renovation of Management of Agricultural economy. After that, there was a Politburo Resolution 22 on November 1989 and Government Decision 72 in March 1990 on Socioeconomic development in mountain regions, Strategy Of Socioeconomic development 1991-2000, The Land Law (1993) the Labour Law (1994) and many legal action have been announced by the government to do the Doi Moi Reform. All of the effort have goal to compete with other countries across ASEAN. Starting the 1990s the mission of Vietnam not just to become the country without starvation, but also to join the economic development in globalization world. Some of the effect of the amendment of the laws and policy are : 1) Recognizes the objectives co-existence of various economic sector as equal before the law; 2) Return the decision on the use of land , and the right to long term use of land , to peasant households, recognized as autonomous economics unit; 3) Manage the cooperatives or production groups that still function well by streamlining their management apparatus, and focusing on specific services ,such as irrigation and pest control ,that individual households cannot undertake effectively. 4) Shift agriculture and rural economy from autarky to commodity production ,depending on the characteristic and comparative advantages of each region.
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5) Free peasant from selling produce to the state at stipulated prices so that produce becomes regulated by a free market and mutually consented prices 6) Increase state investment in major irrigation works, create credits banks to assist needy people with funds and promote agricultural extension work; and 7) Give guidance and assist in expanding education, health services, communications lines, and power networks in the countryside on the basis of Join effort between the state and the people (Peter Boothroyd and Phan Xuan Nam, 2000 p.17)

3. Effect of Doi Moi In Vietnam Economy. The factors of making the Vietnam as the interesting place to Invest for the investors is because its low cost and hard-working labor force,its fast-growing potential market of 71 million people, plenty of natural resources, such as oil,gas,and coal, and also its favorable geographical location and its stable political and civil order. Taiwan has become the top list of investors in Vietnam since 1990.Some of the factor is because the language and cultural are dominantly the same. Because of the Renovation , Vietnam has recovered from the tragedy of the Second Indochina War and damages made by the Hanoi totalitarian rgime after the communist victory in April 1975. However according to Lawrence, the progressive of economy in Vietnam does not follow up with the progress in political development. While the economy of Vietnam is growing, the army also larger and continue dominate the politics and become army centric. In others

words the liberalization process only took place in term of economy but not in the development of politics are worsened. (Lawrence,2006,p.151-152). 4. Effect of Doi Moi In Vietnam Social. The other effects of Doi Moi is in term of Social is related to the gender appreciation is declining. Before the economy move to market orientation, the women are appreciated and they have the same right as man. This is because the ideology of socialist enhances the important of gender equality. Everyone have the same right. After the change took place, women become less important role in helping the Renovation in Vietnam. Women are being underestimated in the process of developing because they are assumed as less powerful, less educated and status in the social structure of Vietnam. For Instant, according to research made by World Bank: In 1994, women workers comprised 53 percent of the total labor force (Anh and Hung 1997). Of productive age women (1355 years), 71 percent participate in economic activities (Anh and Hung 1997:85). In agriculture, women comprise 76 percent of labor while they are barely represented in heavy industry and construction (Anh and Hung 1977). In 1992, women accounted for 50 percent of the total labor force in the state owned sector. (Lynellyn D. Long.et.all.2000.p.8) Therefore, because of many women use in industry, some may called it as an exploitation of women in the industrialization renovation.

ANALYSIS How did Vietnam maintain to become communist countries after most of the Communist country has collapse? 1. Reformation of the leaders that allow Doi Moi to occurs One of the reason why Vietnam are still able to maintain their communist ideology is because of the old ruling troika of Do Moi , Le Duc Anh , and Vo Van Kiet officially retired as a group in late 1990s. They gave a way for the younger generation to took over the party with the leader like General Le Kha Phie which is the chief of the party. They also allow Phan Van Khai as prime minister and Tran Duc Luong as president. Even thought they are stepping down, the older generation still attend the meeting and criticize the new leadership. The climates of the conflict from the new generation with the ruling troika was in 2001 where Le Kha Phieu lost party control and being criticizes for weak leadership and being pro-China. Le Kha Phie were replace by the Nong Duc Manh who is a reformer and a charismatic speaker. Manhs afterward make a policy of economic development,fixing the party problem,privatizing the SOEs and taking care of the ethnic minority resentment. (Lawrence.E.G.2006.p.154). 2. Economic Globalization of Vietnam In Doi Moi Doi moi has a large potential of market for the Foreign Investment which currently consist of eighty three million people (with the more than half are under twenty five), the GDP estimated at about $45 billion with income about $500 per year. The middle class emerged in Vietnam of the cities are six to ten time of the rural village. Vietnam also made a good relationship with the core democratic county like United States by making themselves as a members of the WTO in 2006 . When United States allow the communist country like Vietnam
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to join the WTO, it is a signal that Vietnam is no longer an enemy of the democracy bloc and become friends to all neighbors. With the latest update from the World Bank the countries are grows rapidly after the global crisis and the economy are expanded 6.8 percent in 2010 which is according to the report, it was the fastest pace in 3 years. The export are growing at 25.5 percent , non oil sectors also growth in 31.5 percent growth in 2010. The deficit f Vietnam are reduced from 8 percent in 2009 to 4 percent in 2010. In the strong of FDI flows, Vietnam are having surplus in the capital account for about 12 percent GDG in 2010. Therefore we can see that, even though the communist economic system are unpopular, however the rapid economic growth that are successfully sustain by the government contributed to the stable and peace of political condition in Vietnam.. By making Vietnam have an official relation with the United States and also European Union, the process of legitimizing Vietnam and strengthen cooperation with others states also. In addition,Vietnam membership in ASEAN , the Asia-Pacific Economic Cooperation (APEC) forum, the Greater Mekong Sub-region (GMS), the Asia-Europe Summit Meeting (ASEM), and along with the status of in the World Trade Organization (WTO) ,prove the cooperation. (Jorn Dosch,2006.p.236).

3. Military ruled that control the people freedom Vietnam is still stable despite of the corruption happened that caused five percent of their GDP is because of the military administration that control and limit the freedom of the people. The politic is control by the single party which is Vietnam Communist party and all senior government position civilian and military were filled by party members. It is hard for

Vietnamese to change their government when they are controlled and monitored by the Ministry

of Public Security. The government have a communist way in controlling people by having a block wardens to monitor population beside freedom of press, speech, assembly and association. To makes things worst government also prohibits any political, labor and social organization. The party also controls the court. In other words the VCP control any aspect of Vietnamese life in the branch of executive, legislative and judiciary living people no space express their opinion or move to criticize the government. They have special act to detain person for five years call administrative detention. The Ministry of Public Security (MCP) hold the most important roles on determining what types of freedom that Vietnamese would have. The party also control the televisions and news broadcast. However the foreign cable can be accessed through the satellite disk. That is something that government forgets to set rules or is the beginning of exercising the freedom of obtaining information. Conclusion The process of development in Vietnam in a tremendous achievement today because of Doi Moi. Vietnam is one of the led on the developing countries compare to Indonesia, Cambodia ,Laos and Thailand in term of infrastructure and GDP. Vietnam is emerging as economic power in south east Asia, as what mention as Dato Mukhriz Mahathir the Deputy Minister of MITI, he said that Vietnam now is competing with Malaysia with their motto, whatever Malaysia Is Doing,Vietnam Want To Do It Better.

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Gallery

Le Duan, Secretary General VCP

Pham Hung ,members of First Generation

Overthrown in 2001 where Le Kha Phieu lost party control and being criticizes for weak leadership and being pro-China

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References Lawrence.E.G (2006) . Vietnams Thrust into Globalization : Doi Mois Road. Heldref Publication. Ari Kokko & Fredrik Sjholm (2000). Some Alternative Scenarios for the Role of the State in Vietnam. The Pacific Review, Vol.13 No.2: 257-277.Routledge Taylor & Francis Groups. Jorn Dosch (2006). Vietnams ASEAN Membership Revisited: Golden Opportunity or Golden Cage. Melanie Beresford.2008.Doi Moi in Review: The Challenge of Building Market Socialism in Vietnam. Journal of Contemporary Asia. Vol.38,No.2, May 2008.pp.221-243. Routledge Taylor & Francis Group.Australia. Ying Zhu et.al 2008. New Forms of Ownership and Human Resources Practices in Vietnam.Human Resources Management,Vol.47,No.1,pp.157-175.Wiley Periodical Inc.Australia. Sarah Turner & Phuong An Nguyen. 2005. Young Entrepreneurs, Social Capital, and Doi Moi, Vietnam.Urban Studies,Vol.42,No.10,1693- 1710.Routledge Taylor & Francis Group.McGill University.Canada. Peter Boothroyd and Phan Xuan Nam, 2000. Socioeconomic Renovation In Viet Nam The Origin, Evolution, and Impact of Doi Moi,Institute of Southeast Asian Studies.Pasir Panjang,Singapore. James W.Moreley, 1997.Politics in Transition. Vietnam Join The World. M.E.Sharpe.New York Publication.New York. Johnston, B. and J. Mellor, 1961. The role of agriculture in economic development, American Economic Review 51,566-593. Lynelyn D.Long 2000.Changing Gender Relations in Vietnams Post Doi Moi Era.Policy Research Report On Gender and Development. Working Paper Series No.14. Retrived on 15 March 2011 at http: //www.worldbank.org/gender/prr.

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