Việt Nam’s [vîət nāːm] governmental structure is a one party system. Since the fall of Sài Gòn [sàj ɣɔ̀n] and Democratic south to the Communist North in 1975, the country has been officially unified under a unitary Marxist-Leninist socialist regime. The current ceremonial leader of Việt Nam is President Nguyễn Xuân Phúc [ŋwiəŋ˨˩˦ swəŋ˧˧ fuk˧˥]. He was recently elected earlier this month to take over from the last president, Nguyễn Phú Trọng [ŋwiəŋ˨˩˦ fu˧˥ tʂawŋ˨˩˨], in recognition of his efficient policies regarding COVID-19 handling. However, as the position of parliament president is a largely ceremonial one, the real power of the state will remain in the hands of the general-secretary of the Communist Party which has been held by former president Nguyễn Phú Trọng since 2011.
After the war in 1975, Việt Nam suffered tremendous loss in infrastructure and manpower. The economy struggled with inefficient production, imbalanced trade, high inflation, rising debts, and poorly managed supply and goods distributions. In 1986, a decade after the seizure of Sài Gòn and unification of the North and South, Việt Nam implemented an economic reform known as Đổi Mới [ɗo᷉i mə̌ːi] which translates to Renovation or Innovation to transform the former pure command economy to a socialist-oriented market economy. Unlike a strict command economy in which the government has complete central control over production, investment, prices, and incomes, the new socialist-oriented market would allow for some private ownership and market exchange between private and state-owned enterprises.
The Đổi Mới policies prioritized the production and distribution of necessities such as rice and sugar. It also restructured the country’s bureaucracy system in effort to move away from the inefficient centralized economic system and imposed policies that allowed more leeway for independent economic decision-making on a regional and local level. The biggest change brought by the reform was the gradual expansion of economic freedom for merchants and capitalists that allowed the country to make a concerted effort to increase production.
The result of this economic reform is telling. Việt Nam experienced a miraculous economics transformation in the 1990s with average annual GDP growth of 4.4 percent. For comparison, the United State’s average annual GDP growth rate at the time was around 2%. A practice that was unique to Việt Nam during this growth period was the government’s effort to allocate tax revenue towards developing infrastructure and increasing investment in welfare for areas with high levels of poverty. As a result there was a sharp decrease in poverty level across the country and quality of life greatly improved.
Since then, however, due to the government’s lack of experience in running a mixed market economy, there are a number of structural challenges that prevent Việt Nam from achieving higher growth. As a result, structural problems such as income inequality, environmental pollution, and negative social effects are serious consequences of such a poorly managed institution. Additionally, despite the government’s effort to reduce the national poverty rate, the rising income inequality as well as lack of support for rural development means that absolute poverty is rampant in mountainous and central coast provinces.
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