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Vietnam FOREIGN TRADE AND AID
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Figure 12. Soviet Cooperation Projects, 1985
In the 1980s, the Vietnamese government, acting under party
supervision, continued to regulate and control all foreign trade.
The Ministry of Foreign Trade managed trade and was responsible
for issuing of import and export licenses and approving any
departures from the formal economic plan on an ad hoc basis.
There was considerable division of responsibility, however, among
high level agencies, financial institutions, state trading
corporations, local export companies, and provincial and regional
government bodies.
The role of planning in foreign trade became increasingly
significant after June 1978, when the country formally joined the
Soviet-sponsored Council for Mutual Economic Assistance
(
Comecon--see Glossary) and began to
coordinate its five-year development
and trade plans more closely with those of the Soviet Union and
other Comecon members. Planning officials set trade goals on the
basis of the overall planning targets and quotas required by
bilateral trade agreements with various Comecon countries. The
1978 Treaty of Friendship and Cooperation between the Soviet
Union and Vietnam, the most important of numerous such agreements
with Comecon members, established the basis for the two
countries' "long-term coordination of their national economic
plans" and for long-term Soviet development assistance in
technology and other crucial sectors of the Vietnamese economy. A
1981 Soviet-Vietnamese protocol on coordination of state plans
during the Third Five-Year Plan set specific targets for
bilateral trade and for coordination of Soviet machinery and
equipment exports with plans for development of Vietnam's fuel
and energy sectors.
After approval by the Council of Ministers, major trade
programs were announced at national party congresses
(see Development of the Vietnamese Communist Party
, ch. 4). The trade
program announced in 1986 at the Sixth National Party Congress
called for export growth of 70 percent during the Fourth
Five-Year Plan (see
table 9, Appendix A).
Closer linkages between trade and general economic planning
in the 1980s had mixed effects. Fluctuating commodities prices at
home and market-oriented trade with, and investment from, Western
countries were too uncertain to plan. Consequently, the Second
Five-Year Plan was crippled when hoped-for Western investment
failed to materialize. The joint planning approach was designed
to enable Vietnam to minimize risk because it could count on
stable supplies of important resources and equipment at
concessionary prices, especially from the Soviet Union. Any
delays or bottlenecks in the plans or aid commitments of Comecon
countries, however, could delay or disrupt Vietnam's planning
effort. In the early 1980s, for example, announcement of the
Third Five-Year Plan was delayed until the Fifth National Party
Congress of March 1982 while Vietnam waited for the Soviet Union
to confirm its aid commitment. Similarly, Vietnam in the mid1980s endured first reduction, then elimination of Soviet price
subsidies for purchases of Soviet oil. The reductions were in
accordance with the then general Soviet practice of avoiding oil
price subsidies in order to keep Comecon oil prices close to
those of the world market. The volume of Vietnamese trade
suffered increasingly from some of the recurring problems that
troubled planners in other Comecon countries during this period,
including overly optimistic targets, problems of regionalism,
priorities often driven by ideology, and chronic shortages of
domestically produced raw materials and industrial commodities.
By 1987 observers had concluded that, despite Vietnam's financial
ties with Comecon, increased investment and trade from Western
countries and other non-Comecon sources would be required for a
general Vietnamese economic recovery (following Vietnam's
incursion into Cambodia in late 1978, numerous Western and
regional aid donors had withdrawn their support and imposed a
trade boycott).
Data as of December 1987
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