Vietnam INDUSTRY
United States armored cars converted into bulldozers, 1977
Production of small tractors
The pattern of Vietnamese industrial growth after
reunification was initially the reverse of the record in
agriculture; it showed recovery from a depressed base in the
early postwar years. Recovery stopped in the late 1970s, however,
when the war in Cambodia and the threat from China caused the
government to redirect food, finance, and other resources to the
military, a move that worsened shortages and intensified old
bottlenecks. At the same time, the invasion of Cambodia cost
Vietnam badly needed foreign economic support. China's attack on
Vietnam in 1979 compounded industrial problems by badly damaging
important industrial facilities in the North, particularly a
major steel plant and an apatite mine
(see The Armed Forces
, ch.
5).
National leadership objectives during the immediate postwar
period included consolidating factories and workshops in the
North that had been scattered and hidden during the war to
improve their chances of survival and nationalizing banks and
major factories in the South to bring the financial and
industrial sectors under state control. The government's
continued use of wartime planning mechanisms that emphasized
output targets and paid little heed to production or long term
costs caused profits to erode, however, and increased the
government's financial burdens. Economic reforms undertaken in
1977 gave factory management some independence in formulating
production plans, arranging production resources, and containing
production expenses. Such additional pragmatic steps as the
adoption of incentive-structured wages and the realignment of
prices better to reflect costs were also considered.
This first experiment with reform was relatively short-lived,
partly because it ran counter to the overriding policy of
socializing the South and integrating it with the North by
reducing the centralized administrative control obviously needed
to do the job. Some reform measures stayed on the books, however,
and were revived in the 1980s.
Vietnamese statistics indicate that the gross value of
industrial output in 1980 was not much higher than in 1976 and
that the value of output per capita declined more than 8 percent.
For example, cement production was relatively stagnant; it
averaged 1.7 million tons annually during the Second Five-Year
Plan, but only 1.4 million tons in 1985.
In general, fuel production increased at more than 10 percent
annually. Coal output grew from 5.2 million tons in 1975 to 6
million tons in 1978 and fell to 5.3 million tons in 1980.
According to official figures, 1985 coal production remained at,
or somewhat below, the 1981 level of 6 million tons (see
table 8,
Appendix A). Coal accounted for about two-thirds of energy
consumption in the 1980s. Coal mining remained handicapped by
coordination and management problems at mining sites, incomplete
rail connections to mines, equipment and materials shortages, and
inadequate food and consumer goods for miners (see
table 8,
Appendix A).
Some light industry and handicrafts sectors mirrored the
difficulties experienced in agriculture because they used
agricultural raw materials. By 1980 the Vietnamese press was
reporting that many grain, food-product, and consumer-goods
processing enterprises had reduced production or ceased
operations entirely. Although detailed statistics on sector
performance were insufficient to show annual results, the total
value of light industry output peaked in 1978; by 1980 it was
nearly 3 percent lower than it had been in 1976. Increasingly
severe shortages of food (particularly grain and fish) and
industrial consumer goods lessened workers' incentives.
Total industrial production during the Third Five-Year Plan
reflected high levels of investment, averaging some 40 percent of
total annual investment during the plan period. In 1985 the
industrial sector accounted for some 32 percent of national
income, up from approximately 20 percent in 1980.
From 1981 through 1985, industrial growth was unevenly
distributed and in many instances simply restored production
levels to their 1976 levels. The highest production growth rates
were recorded in the manufacture of paper products (32 percent
per year), and food processing (42 percent per year). Both
sectors had declined in production during the Second Five-Year
Plan. Production of processed sugar increased from 271,000 tons
in 1981 to 434,000 tons in 1985, almost ten times the 1975
production level. The processing of ocean fish increased from
385,000 tons in 1980 to 550,000 tons in 1985, not quite reaching
1976 and 1977 levels, but clearly reversing the steady decline
this sector had experienced in the late 1970s. (The decline had
been generated in part by the use of fishing boats in the South
as escape craft to flee the communist regime.) Other light
industries grew at annual rates of 10 percent or more during the
early 1980s, which essentially restored production to 1975 or
1976 levels. Brick production increased steadily to 3.7 billion
bricks in 1985, after regular declines during the previous plan.
Production of glass reached 41,000 tons in 1985, exceeding 1975
levels for the first time. Paper production in 1985 again reached
the 1976 level of 75,000 tons, up from 42,000 tons at the
beginning of the plan in 1981; and the textile subsector
exhibited an 8-percent average annual growth rate during the plan
period as cloth production more than doubled to 380 million
square meters in 1985.
Among heavy industries, machine-building and chemical
industries (including rubber) registered annual average
production gains of approximately 25 percent. Chemical fertilizer
production continued to exceed the 1975 level and, in 1985,
reached 516,000 tons despite relatively underdeveloped mining and
enrichment processes for apatite and pyrite ore and
underutilization of the Lam Thao Superphosphate of Lime plant
(Vinh Phu Province). Pesticide production also maintained a
decade-long growth trend to reach 11.74 billion tons in 1985.
Fragmentary figures for iron and chromium ore production were
discouraging and suggested a continuation of the decline from
1975 levels. Ferrous and non-ferrous metallurgical production
actually declined overall, reflecting exhausted and obsolescent
plants, low investment rates, and probably dwindling supplies of
scrap left from the end of the Second Indochina War. Modest gains
were reported annually in steel production, which reached 57,000
tons in 1985.
Electric power production, although handicapped by
uncompleted projects and shortages of oil and spare parts, grew
at an average of 8 percent per year. Vietnamese statistics on the
annual output of primary products showed that production of
electricity increased by almost 60 percent to nearly 3.8 billion
kilowatt hours from 1976 through 1978, then declined to around
3.7 billion kilowatt hours in 1980. By 1985, however, production
of electricity had increased to 5.4 billion kilowatt hours.
Energy-producing industries generally remained stagnant, however,
which caused tremendous difficulties for the other sectors of the
economy. Power output grew very slowly, and power shortages
forced many factories to operate at only 45 to 50 percent of
capacity. The government planned that in the 1980s energy
production would be tripled by the completion of three big
Soviet-assisted projects: the 500-megawatt thermal plant at Pha
Lai, Hai Hung Province; the 300-megawatt hydroelectric plant at
Tri An, Dong Nai Province, and the giant, 1,900-megawatt
hydroelectric plant at Hoa Binh, Ha Son Binh Province, which has
been called the "Asian Aswan Dam."
Data as of December 1987
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