Conjunctures and Continuities in Southeast Asian Politics

3. The Road to Doi Moi in 1986: Domestic Dimensions

3 THE ROAD TO DOI MOI IN 1986 Domestic Dimensions Ta Minh Tuan In modern Vietnam one could argue that there were a number of turning points that made history. The proclamation of the independence of Vietnam in September 1945 and the subsequent birth of the Democratic Republic of Vietnam certainly constituted a milestone, which put an end to more than eighty years of French colonial rule. The French returned with an intention to re-capture power leading to the outbreak of the First Indochina War. The Paris Conference in 1954 following Vietnam’s victory over the French in Dien Bien Phu marked the complete departure of the French from the North of Vietnam and the partition of the country at the 17th parallel. The United States replaced France to support the government of the Republic of South Vietnam and to scrap the Paris Accord on the holding of a general election to unify Vietnam in 1956. The Second Indochina War (better known as the Vietnam War) followed as a result and lasted for almost twenty years. The unification of Vietnam in 1975 led to American disengagement, ushering in a whole new period for a united Vietnam for the first time in more than one hundred years. However, these thirty years were the time when Vietnam had to fight for independence and national 54 Ta Minh Tuan liberation, which was conducive to the shared common feature of constant war and armed struggle both in the North and in the South. The reconstruction of a war-torn Vietnam only started after the political and institutional reunification of the country in 1976. Hanoi implemented a Soviet-type command economic policy with great hopes of success. Nevertheless, the expansion of the socialist economic sector had not brought about the expected outcomes. In the North of Vietnam, acceleration of implementing co-operatives and enlargement of their size were apparently successful. In substance, agricultural co-operatives had further deteriorated. The size of the co-operatives had gone well beyond the management capacity of the local management boards. Co-operative members were indifferent to their work since they did not enjoy the benefits of increased productivity. In the South of Vietnam, Hanoi’s hasty attempt to collectivize agriculture and abolish capitalist business and develop largescale co-operatives had encountered strong resistance from peasants. They left their land fallow. In the 1978–79 winter-spring crop there was nearly 200,000 hectares of paddy-growing land left uncultivated in the Mekong Delta alone. Many co-operatives were dissolved at the time they were initiated. The objective to basically accomplish agricultural collectivization by 1980 failed.1 Furthermore, agriculture was heavily hit by natural disasters in 1977 and 1978. As a result, Vietnam had to import a record amount of 1.5 million tons of food in 1979.2 In Ho Chi Minh City (formerly Saigon), the process of nationalizing private-owned business establishments forced thousands of merchants, big and small, out of their jobs. Industrial and commercial sectors became stagnant. Tens of thousands of people had to move away from the city to earn their living, many of whom were Hoa (ethnic Chinese). The implementation of all 15 major planned economic targets for the Second Five-Year Plan (1976–80) fell short. The government’s official statistics showed that only six targets had achieved 50–80 per cent of projected output while the other nine targets accounted for only 25–48 per cent. Average annual national income growth rate in 1976–80 was merely 0.4 per cent, meaning a sharp decline in per capita terms, while population growth rate stood at 2.24 per cent,3 contributing to increasing difficulties in people’s lives. This bad economic situation prevented Vietnam from demilitarizing its large standing army after the horrible war. But feeding millions of men in uniform, including the cost of Vietnam’s intervention in Cambodia in 1979, was also a burden on the economy. The Road to Doi Moi in 1986: Domestic Dimensions 55 To solve the economic problems on their own, co-operatives subcontracted tasks to the households, and factories became engaged in “fence-breaking” (phá rào), swapping or selling on the free market to raise cash to buy materials or pay bonuses to workers and making deals with other factories or with agricultural co-operatives to supply materials. “Fence-breaking” began in Ho Chi Minh City, strongly supported by Vo Van...