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Vietnam The Third Five Year Plan (1981-85)
By 1979 it was clear that the Second Five-Year Plan had
failed to reduce the serious problems facing the newly unified
economy. Vietnam's economy remained dominated by small-scale
production, low labor productivity, unemployment, material and
technological shortfalls, and insufficient food and consumer
goods.
To address these problems, at its Fifth National Party
Congress held in March 1982, the VCP approved resolutions on
"orientations, tasks and objectives of economic and social
development for 1981-85 and the 1980s." The resolutions
established economic goals and in effect constituted Vietnam's
Third Five-Year Plan (1981-85). Because of the failure of the
Second Five-Year Plan, however, the Vietnamese leadership
proceeded cautiously, presenting the plan one year at a time. The
plan as a whole was neither drawn up in final form nor presented
to the
National Assembly (see Glossary) for adoption.
The economic policies set forth in 1982 resulted from a
compromise between ideological and pragmatic elements within the
party leadership. The question of whether or not to preserve
private capitalist activities in the South was addressed, as was
the issue of the pace of the South's communist transformation.
The policies arrived at called for the temporary retention of
private capitalist activities in order to spur economic growth
and the completion, more or less, of a communist transformation
in the South by the mid-1980s.
The plan's highest priority, however, was to develop
agriculture by integrating the collective and individual sectors
into an overall system emphasizing intensive cultivation and crop
specialization and by employing science and technology. Economic
policy encouraged the development of the "family economy"; that
is, the peasants' personal use of economic resources, including
land, not being used by the cooperative. Through use of an
end-product contract system introduced by the plan, peasant
households were permitted to sign contracts with the collective
to farm land owned by the collective. The households then assumed
responsibility for production on the plots. If production fell
short of assigned quotas, the households were to be required to
make up the deficit the following year. If a surplus was
produced, the households were to be allowed to keep it, sell it
on the free market, or sell it to the state for a "negotiated
price." In 1983 the family economy reportedly supplied 50 to 60
percent of the peasants' total income and 30 to 50 percent of
their foodstuffs.
Free enterprise was sanctioned, thus bringing to an end the
nationalization of small enterprises and reversing former
policies that had sought the complete and immediate communization
of the South. The new policy especially benefited peasants
(including the overwhelming majority of peasants in the South)
who had refused to join cooperatives, small producers, small
traders, and family businesses.
The effort to reduce the capitalist sector in the South
nevertheless continued. Late in 1983, a number of import-export
firms that had been created in Ho Chi Minh City (formerly Saigon)
to spur the development of the export market were integrated into
a single enterprise regulated by the state. At the same time, the
pace of collectivization in the countryside was accelerated under
the plan. By the end of 1985, Hanoi reported that 72 percent of
the total number of peasant households in the South were enrolled
in some form of cooperative organization.
Despite the plan's emphasis on agricultural development, the
industrial sector received a larger share of state investment
during the first two years. In 1982, for example, the approximate
proportion was 53 percent for industry compared with 18 percent
for agriculture. Limiting state investment in agriculture,
however, did not appear to affect total food production, which
increased 19.5 percent from 1980 to 1984.
The plan also stressed the development of small-scale
industry to meet Vietnam's material needs, create goods for
export, and lay the foundation for the development of heavy
industry. In the South, this entailed transforming some private
enterprises into "state-private joint enterprises" and
reorganizing some small-scale industries into cooperatives. In
other cases, however, individual ownership was maintained.
Investment in light industry actually decreased by 48 percent
while investment in heavy industry increased by 17 percent during
the first two years of the plan. Nonetheless, the increase in
light-industry production outpaced that of heavy industry by 33
percent to 28 percent during the same two-year period.
The July 1984 Sixth Plenum (Fifth Congress) of the VCP
Central Committee recognized that private sector domination of
wholesale and retail trade in the South could not be eliminated
until the state was capable of assuming responsibility for trade.
Proposals therefore were made to decentralize planning procedures
and improve the managerial skills of government and party
officials.
These plans were subsequently advanced at the Central
Committee's Eighth Plenum (Fifth Congress) in June 1985. Acting
to disperse economic decision making, the plenum resolved to
grant production autonomy at the factory and individual farm
levels. The plenum also sought to reduce government expenditures
by ending state subsidies on food and certain consumer goods for
state employees. It further determined that all relevant costs to
the national government needed to be accounted for in determining
production costs and that the state should cease compensating for
losses incurred by state enterprises. To implement these
resolutions, monetary organizations were required to shift to
modern economic accounting. The government created a new dong (D-
-for the value of the
dong, see Glossary) in September 1985, and
set maximum quotas for the amount permitted to be exchanged in
bank notes. The dong also was officially devalued.
Data as of December 1987
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