Vietnam

D

Manufacturing

At the time of the French conquest in the late 19th century, Vietnam’s industry was at a relatively primitive stage. The French introduced some modern technology and production methods. After the division of Vietnam in 1954, both the North and South governments attempted to promote industrialization. However, efforts were stymied by the Vietnam War, and little was accomplished before 1975.

After reunification, the Communist government promoted the creation of an advanced industrial society characterized by state ownership, but the results were meager. The plans adopted as a part of the doi moi reforms call for a balanced approach to developing both industry and agriculture, with a mix of state, collective, and private ownership.

Most large firms remain under state ownership, but the role and number of private enterprises has steadily increased. Most enterprises produce consumer goods for the domestic market, although a growing number manufacture goods for export, notably textiles and processed foods. Steel production has increased dramatically since the end of the war, and the manufacture of cement, chemical fertilizer, and textile and paper goods is on the upswing. Foreign firms play a growing but still limited role in the industrial sector.

E

Mining

Most mining activities take place in the northern provinces of the country, where anthracite coal, phosphate rock, gypsum, tin, zinc, iron, antimony, and chromite are extracted. Coal and apatite are mined extensively. The total coal production in 2003 was 16 million metric tons.

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In recent years, large petroleum and natural gas deposits have been discovered along the continental shelf in the South China Sea. With assistance from the Soviet Union, Vietnam began extracting oil from its first oil field in the mid-1980s. Additional oil fields have since become productive. In the late 1990s petroleum accounted for nearly one-third of Vietnam’s export revenues. Further development may be hindered, however, by disputes with China and other neighboring nations over the ownership of offshore deposits in the area.

F

Energy

Per-capita consumption of electricity is relatively low in Vietnam because many people, especially in rural areas, burn wood to meet their household energy needs. Such traditional fuels accounted for nearly half the country’s total energy use in the mid-1990s, but commercial and urban growth is increasing the demand for electricity. In the mid-1990s electricity was supplied mainly by hydroelectric stations, although thermal installations burning petroleum and coal were also important.

G

Transportation and Communications

A primitive transportation system has long been one of the main obstacles to economic development in Vietnam. While the system of roads is one of the best in Southeast Asia, until recently the motor fleet was outmoded, consisting primarily of Soviet trucks built during the 1950s. Furthermore, rail facilities suffered damage during the war, and a lack of funds prevented adequate repair or expansion of the system. In the late 1990s, the government began an attempt to modernize the truck fleet and the rail system and to improve the major roadways. Most goods in the country, however, are still transported by barge along the numerous rivers and canals.

Major ports used for international shipping are Haiphong, Da Nang, and Ho Chi Minh City. All, however, lack modern facilities. The state-run Vietnam Airlines operates both internationally and domestically but has been seriously hindered by an aging fleet consisting of Soviet-built planes that have been in operation since the Vietnam War. To modernize the airline, the government is using scarce foreign exchange reserves to purchase new aircraft from Europe and the United States.

Poor communications facilities represent an additional obstacle to economic development. The nation’s telephone system is grossly inadequate, and Vietnam is just beginning to enter the computer age. Private ownership of telephones and computers is still severely limited. Access to information is somewhat better, as most Vietnamese own a radio or a television set, and there are a number of major national newspapers, including the official daily Nhân Dân (The People) and the military newspaper Quan Doi Nhân Dân (People’s Army). Many independent newspapers and periodicals are now being published, although those that transcend the official line run the risk of censorship or losing their licenses.

H

Foreign Trade

During the French colonial period, Vietnamese foreign trade was characterized almost exclusively by the export of primary raw materials—such as rice, rubber, and other tropical products—and the import of manufactured goods from abroad, mainly from France. During the Vietnam War, both the North and South had a chronic imbalance in their balance of payments, as their sponsors pumped in military and economic assistance with little regard to their client’s ability to pay.

After reunification, these adverse conditions continued. Vietnam consistently ran a significant deficit in its trade relations with foreign countries. At first, the bulk of Vietnamese trade was with the Soviet Union and other Communist countries, which exported manufactured goods, food, and oil to Vietnam in return for cheap textile goods, cash crops, and maritime products. Trade was tightly controlled under the management of several state-owned trading corporations, each specializing in a particular commodity line. The United States imposed a trade embargo on North Vietnam in 1964 and all of Vietnam in 1976; this embargo was lifted in 1994.

Foreign trade has developed rapidly since the implementation of the doi moi reforms and the end of the U.S. embargo. Most foreign trade now takes place with other countries of Asia or with developed countries in the West. Exports have increased significantly, notably in the area of cash crops, oil, and rice. But imports of foreign technology and consumer goods have increased as well, and the trade deficit continues to be one of the country’s most serious problems. In 2002 the value of imports was estimated at $19.7 billion, while exports were estimated at $16.7 billion.

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