Socialism plus markets: Vietnam’s chosen path

Three decades ago, Vietnam embarked on what it calls a “renewal” process that brought rapid development after years of war, famine, and poverty. The ideological and economic approach of combining their socialist goals with a market system has seen many gains, but also brought new dangers. During a recent visit to Vietnam, People’s World sat down with Bui The Giang, the Director General for Western Europe and North America Affairs for the Communist Party of Vietnam’s Commission of External Relations. In the course of this in-depth talk, Giang discussed Vietnam’s journey towards economic prosperity, its commitment to sticking to a socialist trajectory, and efforts to preserve the legacy of revolutionary leader Ho Chi Minh.

Giang: I’m the Director General for the Western Europe and North America Affairs Department for the Commission of External Relations of the Central Committee of the Communist Party of Vietnam. And of course, I’m a communist. Nice to see you. 

Robinson: Thank you. OK, I’m going to jump right into it. One of the main questions we have is about the socialist-oriented market economy. It’s been mentioned before [in relation to Vietnam]. Can you give us a little overview? Because when people hear “market economy,” they think “capitalism” and “exploitation.” But now there’s a word in front of it – socialist. Does that change it? How does Vietnam conceive of the “socialist-oriented market economy”? What’s the path? 

Giang: Let me start with 30 years ago. At that point in time, we launched what is called “Comprehensive Renewal,” with a focus on economic renewal. What does it mean to us? Before the launch of renewal in 1986, the country was in really bad shape. Why? Because the country just came out of a succession of wars. There was the French War, which lasted from 1858 to 1954; 94 years under French domination, ending with the Battle of Dien Bien Phu. Then, what you call the Vietnam War, we call the American War in Vietnam, which ended in 1975. Following that, the Khmer Rouge in Cambodia started to launch an aggressive border war against us. They claimed that six provinces in Vietnam used to belong to Cambodia, and they launched the war to recover them. This Southwestern Border War started before the end of the American War in Vietnam, and it lasted until late 1978/early 1979. Then the patriotic forces of Cambodia, led by the current prime minister Hun Sen, joined with us in fighting and overthrowing the Khmer Rouge. And you might also recall that in February 1979 the Chinese started their border war with us after Deng Xiaoping announced during a visit to the U.S. that China would “teach Vietnam a lesson.”

So, all in all, four successive wars in the last 100 years. The country was totally devastated. In total ruin. Not just economically, but also socially. The whole social infrastructure. There was almost no hamlet or city in Vietnam without a bomb, without a mine. The country was in extremely bad shape. And because of so many years of war, the international relations of the country then were very limited – with the Chinese fighting us, the Khmer Rouge fighting us, and ASEAN (Association of Southeast Asian Nations) forces were all pro-American. And the Western world, led by the U.S., had imposed an embargo on Vietnam since 1964 that was only lifted in 1994. So internationally speaking, Vietnam was very much isolated. The Soviet Union and the Eastern Bloc were also at the start of their crisis. Remember, 1986 was only five years before the collapse of the Soviet Union.

That was the year when we launched renewal. Internationally, we were isolated. Domestically, we were destroyed. The country was in bad shape. A hungry belly has no ears. So policies by the party were not listened to by the population. By international standards in 1986, the poverty rate of Vietnam was at 73 percent. Our population then was only 40 million, but six million of them were suffering from famine already.  The inflation rate was 774 percent. So all in all, the country was in comprehensive crisis and collapse.

At that time, our leadership – the party leadership of the Sixth National Congress – decided to launch a renewal of the whole country. But first of all, economic renewal. When we launched renewal economically, we meant to allow gradually for the private sector – first domestic, and increasingly afterwards the foreign private sector – to get involved in the economic restoration and development of the country. 

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Before renewal we were so wishful in our thinking, and our policy making, that we considered Vietnam then was already a socialist country. No private sector was allowed in whatever form or activity in the economy. And that caused a lot of problems. Just imagine, the country in such bad shape. The country was so poor and the need to recover the country from the war consequences was imperative. The country’s resources were very meager. So if we continued to do that [not allowing the private sector], the country would collapse again. So granting permission for the private sector to take part in the economic development of the country was a very important decision.

That is what is part of what you call market economy – private sector participation in the economy. But the socialist orientation refers to the [Communist] Party’s leadership. [Up] until this point in time, the Communist Party of Vietnam remains the only political party in power in my country. 

Second, the state sector has remained the leading sector of the economy, [so as] to avoid any deviation economically, ideologically, [or] politically from the socialist orientation. That’s why we call it socialist orientation. But by socialist orientation, we also mean that we are not yet a socialist country. It’s only the future. It’s only the orientation of the economy. So that’s why we say socialist-oriented economy. 

Robinson: What achievements have been accomplished since making that decision about going that route when it comes to the economy? 

Giang: Well, the achievements are also comprehensive. Economically, as I said, starting at that point in time, when I mentioned the earlier inflation rate and the poverty rate [in 1986]… Now the inflation rate, last year in 2015, was only about four percent. The poverty rate was [in 1986] was 73 percent, now it is down to about six percent. This is extremely important when you take into account several facts. The size of the population has more than doubled since that time. As I said earlier, in the mid-80s, the country was about 40 million in population and now it is at more than 90 [million]… We gave a lot of land to accommodate the housing needs of that doubled population. We had to give land for infrastructure. Roads are many more and much larger today. Industrial parks, export processing zones, and so forth.

So the size of arable land was reduced quite considerably. The quality of the soil has also declined. In order to feed the population, we increased from one crop a year per piece of land to two and even three crops a year. [We used] a lot of chemical fertilizers. The turnover of the crops and the use of chemical fertilizers reduced the quality of soil. And yet we have moved from a net importer of food – of about one million tons a year – to now, for the last ten years, we have been among the world’s leading exporters of rice. [Vietnam is] the second largest exporter of rice and second or third largest exporter and producers of coffee. Cashew nuts, rubber, black pepper – all those agriculture-based products. Meaning what? Economic renewal and re-orientation of the economy has brought about considerable progress and development economically.

Politically, I believe Vietnam today is among the largest attractions for foreign investors. Why? First of all, we have remained very stable politically. While in other [developing] countries, coups d’état and political chaos can be found. If you take into account, for example, terrorism – we don’t suffer from that in my country and therefore, politically, it is good. We’ve been consistent in our policies: foreign policy, political policy, and economic policy. The environment is quite attractive, conducive, to foreign investors. I believe these are among our most important achievements.

Another [foreign policy] achievement… I mentioned earlier about Vietnam being isolated in the international community at the time we launched renewal. Today, we have diplomatic relations with 185 countries in the world. For the first time in our history, we are now having normal diplomatic relations with all five permanent members of the Security Council of the United Nations. To make it clearer, among the five permanent members of the Security Council, we have strategic partnerships with four, and a comprehensive partnership with one. That shows how we are becoming a friend, a reliable partner, of the international community. We also have to add another aspect, along with being a good partner of the international community, we have made contributions to the international community as well. For example, joining the peacekeeping forces of the United Nations. At the same time, experiences in our process of renewal have been shared with many developing countries in Africa, Latin America, and certain countries in South Asia. They have come to us for experience, and we are more than happy to share with them. 

Robinson: So we have the achievements. Have there been challenges that are still being dealt with? What are those challenges exactly? 

Giang: We don’t call them challenges. We call them, in a more serious manner, dangers. The first danger is lagging behind other countries. We understand that this is the age of information and high technology. In order to catch up with them against [the kind of background we had as a country] 30 years ago, we need to move faster. Otherwise, we’ll be further behind other countries. That’s the first danger.

The second danger is the danger of corruption. Just imagine [for example], today I’m very poor. Tomorrow, suddenly I become very powerful. I would not wish to see myself poor, right? And therefore, the temptation for corruption is there and visible.

Actually in our system, we have dealt with many public officials, including party members, who have committed what we call corruption crimes. We have laws on corruption…anti-corruption. Those who have committed those crimes have been brought to trial. That’s the second danger. 

The third danger is… confronting what we call ‘peaceful evolution‘ by hostile forces. Today there are five countries that are supposedly socialist countries: China, Cuba, Laos, the People’s Democratic Republic of Korea (DPRK), and Vietnam. The socialist system, as a world political system, is no longer [in existence] after the collapse of the Soviet Union and the Eastern Bloc. I believe anticommunists are not happy to see socialist countries moving forward. Therefore, there have been, every now and then, attempts to overthrow the socialist leadership of my country. Time and again, there have been attempts to spoil politically – through economic means – the leaders, cadre, and public officials of our political system. This has become so serious that our party has named this danger a national enemy, a national problem. Therefore, one of those key issues and key tasks for the party to deal with for the time to come is to deal with this ‘peaceful evolution.’ To prevent it from happening. These are the three dangers. 

Robinson: You were talking about the socialist-oriented market and needing it to develop further. So does that mean that it’s not the end result, and that the true goal is to eventually get to socialism?

Giang: When we say socialist-oriented market economy, we really mean that it’s just for the transition period to socialism. Socialism/communism has always been the end goal of our revolution. But in order to achieve that goal, we need a roadmap. We need a transition period. As I said, we are not yet a communist society. We have to live together, accept the co-existence of non-socialist sectors in the economy and the society. The point is we have to maintain the leadership of the Communist Party to ensure the direction to socialism and communism. 

Robinson: What’s the involvement of the people in moving towards this future? Also, is there a special role of the Communist Party of Vietnam in this?  

Giang: Let me start with the first half of your question about the people’s involvement. I remember once hosting a group of White House fellows from your country. The first question came from a lady, and she was quite blunt asking me: “Mr. Director General, when do you expect that the Communist Party will be no longer in power?” My answer was: “It’s up to our population. It is up to our people.” The existence of the only party in our country is up to the choice of the population, of the people. If they want to change it, they can do it. Believe me, Vietnamese people are very strong. In our history, it is the system they have chosen. In order for this system to be maintained and continue to develop, people’s participation is the only solution. Let me give you one example of the most recent national congress of our party, the 12th National Congress. Before the national congress was convened, the draft documents – particularly the political report and the socio-economic strategy – were published for the people to make comments on. 2.6 million comments were made by the population. We had to set up what we called a drafting council in order to collect and try to digest, and then incorporate those best comments into those documents to be considered and approved by the National Congress of our party. Once those documents are adopted by the party congress they will be the national documents, not just the party documents. That is the typical example of the involvement of the population in the policymaking progress in this country.  The same thing applies in other sectors as well.

Now, about the role of the Communist Party… In our country, in our political system, we often mention three components: Party leadership, states’ governance, and peoples’ ownership. So I believe, as the advanced section of the population, the Communist Party is considered as the leader. We provide the orientation for the country’s development. But, mind you, those decisions are made with the people’s participation. The National Congress’ political document [mentioned before] could be seen as a good example.

Second, in order for the whole system to operate well, we have to have good governance by the state. How the body exercises its leadership, how the state can exercise its governance functions, and how to ensure the ownership by the people in the whole process remains a question, because we have never had any precedent.

We need to grow and invent our own models of development…our own choices for development. And over time, we have to look back to review and learn from experiences – both good and bad – so that we continue our development as oriented by the Party Congress and in line with the choice we have made – that is, socialism and communism. 

Readers interested in further discussion of the “socialist-oriented market economy” concept can check out the following articles from People’s World and Political Affairs:

Vietnam’s Socialist-Oriented Market Economy, by Erwin Marquit

Socialism and the Path to Socialism: Vietnam’s Perspective, by Nguyen Phu Trong

Unfinished Business: Socialist Market Economy, by Al Sargis

The Leninist Heritage of the Socialist Market Economy, by C.J. Atkins

Tasks of Working Class Governments Under the Socialist-Oriented Market Economy, by David S. Pena

Photo: PW