Managing the renewal process: The case of Vietnam
| DOI | http://doi.org/10.1002/pad.4230130410 |
| Date | 01 October 1993 |
| Author | Brian Van Arkadie |
| Published date | 01 October 1993 |
PUBLIC ADMINISTRATION AND DEVELOPMENT, VOL.
13,435451
(1993)
Managing the renewal process: the case
of
Vietnam
BRIAN
VAN
ARKADIE
Dar
es
Salaam University
SUMMARY
This article reviews the management of Vietnam’s renewal process from the viewpoint of
understanding the structure of the economy. It argues that, in terms of population, income
and welfare, Vietnam has been relatively more successful than other less-developed Asian
countries. At the same time, historically, its economy was only to a minor degree under
central government management-in contrast to the ex-USSR and Eastern Europe-and hence
it has been capable of a more flexible response. Its human capital stock is strong but perform-
ance has been constrained by war, embargo and mistakes of strategy. Against this background,
the article traces the reform process, from the brief interlude with central planning through
the inauguration of
‘doi
moi’
after cessation of western and Chinese aid. The initial stress
has been on macroeconomic stabilization. The problems of achieving this and the reasons
for success are advanced. The next stage of the reform encompasses additional areas where
international assistance may be relevant: the legal and institutional framework for the market
economy, reform of government administration and improving enterprise management.
Fol-
lowing the new constitution of 1992, public administration reform has come to the fore-both
structural as well as in relation to central-local government relations. This article describes
the machinery for reform implementation as well as its scope, which encompasses the size
and staffing of the civil service, salaries, human resource management, systems and procedures,
turn-round of state enterprises and management skills development. The article continues
with a review of two key multilateral assistance projects. The path-breaking
UNDP
Manage-
ment Development Programme has conducted training in economic management and sup-
ported the development
of
the legal system. The project has had an important impact on
policy-makers and on policy discussion. A successor project will provide support to public
administration reform in Vietnam. In the light of the current dramatic expansion in aid to
Vietnam from DAR sources, the article concludes that control and coordination of overseas
assistance by the government will be vital if aid is to be fully utilized and work in total
support of Vietnam’s existing development effort.
THE STRUCTURE
OF
THE VIETNAMESE ECONOMY
Population, income and welfare
Vietnam is a predominantly agricultural country of more than
67
million people.
A little more than one-tenth work in industry and just over one-fifth of the population
lives in urban areas. Efforts are being made to assess Vietnam’s
GDP
on an internatio-
nally comparable basis. Probably the best approach is still that of the
UN
Report,
i.e. that perhaps all that can be said is that
GDP
per capita lies between US$
100
and
US$200 (UNDP
and the Government of Vietnam,
1990,
pp.
31-32).
Whatever
revisions are likely to be made in the near future, it is certain that Vietnam’s GDP
is low enough to place it clearly in the least-developed country category. Agricultural
Dr. Van Arkadie is Professor of Economics, Dares Salaam University, Tanzania
027
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1993
by John Wiley
&
Sons, Ltd.
436
Brian Van Arkadie
productivity remains both central and precarious. The level of the staples harvest
(particularly paddy) determines whether a large proportion of the population are
in a secure economic situation or are faced with great economic difficulty and food
insecurity. The two most densely populated rural areas are the two deltas-the Red
River delta in the north and the Mekong in the south. Cropped land per capita
is low-0.10 hectares per person, compared with 0.21 in India and 0.37 in Thailand-
but not out of line with Sri Lanka with 0.11 hectares per capita and more than
Bangladesh with 0.08 hectares per capita.
In relation to a number of social indicators, available data suggest that Vietnam
has been more successful than other Asian economies at a similar apparent income
level. With life expectancy of 66 years, and infant mortality of 43 per 1000 live
births, Vietnam is closer to the Philippines (64 years and 43 per
1000)
than Bangladesh
(51
years and 116 per 1000). In terms of primary school enrolments Vietnam does
as well as any country in Asia, and is among the best in adult literacy.
The
structure
of
production
Following the reforms of the 1980s, agriculture is organized mainly with the family
farm as the basic production unit. Cooperatives control access to land and water:
the farmer barters a portion of his output with the cooperative for input and services
supplied. The household has control over production decisions and the surplus left
after meeting contract obligations (de Vylder and Fforde, 1988). The private sector
is also now involved in the marketing and transport of agricultural output. State
farms are restricted to about
4
per cent of Vietnam’s agricultural land and concentrate
on the production of industrial crops. Rice is the most important crop. Livestock
are important as
a
protein source, as are fish and other seafood products-they
are also a significant source of export earnings. Industrial crops include tobacco,
coffee, coconuts, tea, rubber, sericulture and cashew nuts.
After a number of years of food shortages Vietnam has become, since 1988, a
significant rice exporter. Vietnam has exported more than a million tons of rice
per year since 1989. However, that success should not be a source
of
complacency,
as agriculture remains vulnerable to climatic conditions, and output increase must
be maintained at 2 per cent per annum just to match population growth. In the
short term, a critical requirement is the continued supply of fertilizers and pesticides
in the face of Vietnam’s difficult foreign exchange situation, while in the longer
term sustained agricultural growth will require massive infrastructural investment,
and the strengthening of research, extension and other agricultural support services.
In addition to its agricultural land, Vietnam has some
7
million hectares
of
forests.
There are also diverse proven mineral deposits such as coal, iron ore, bauxite, copper,
chrome, apatite, gold, rare earths, semiprecious stones and, most important, petro-
leum and natural deposits.
The industrial sector, broadly defined, accounts for more than one-quarter
of
GDP.
The organization
of
the industrial sector is quite diversified. It was estimated
that, in 1990, three-fifths of industry was state owned (including joint ventures with
the private sector) and two fifths was non-state (including cooperatives). Within
the state sector, in turn, roughly two-thirds was under central management and
one-third under local control. In particular the larger scale, heavy industries are
under central management.
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