'Doi Moi' - Vietnam's Economic Revolution

There is no direct translation of ‘doi moi’: the meaning combines the sense of ‘renewal’, ‘a fresh start’, ‘renovation’, and ‘reform’. In practice, it was a policy U-turn at the Sixth Vietnam Communist Party Congress in 1986.

The bitter harvest of four decades of hard-line Soviet-style collectivism was isolation from the rest of the world, a shattered economy, and mass starvation. With Vietnam on the brink of collapse, the Party abandoned a ‘command’ economy under central control and embraced the world market.Over the next few years, subsidies were reduced, wages were increased, the planning system was reformed and the currency was devalued to slow rampant inflation. Despite these measures, progress was slow. Paradoxically, it was the collapse of the USSR that provided the lifeline. Faced with the abrupt disintegration of its largest trading partner, and the return of nearly a quarter of a million Vietnamese from its satellite states, Vietnam slapped on import controls, banned the import of luxury goods altogether to conserve foreign exchange, and set about raising domestic output and searching for new markets.The results were striking. From being a net importer of rice, Vietnam climbed to become the world’s second largest exporter. From a standing start, a coffee industry was established, and Vietnam is now nipping at the heels of Brazil to become the world’s largest producer.

Industry flourished. Vietnam is now one of the biggest exporters of garments and footwear to the EU, and is making inroads into the American market.

Progress continues, but too slowly for western observers who criticise Vietnam for failing to cauterise its large, inefficient and heavily over-manned state sector. However, our government is mindful of the social effects that would result from an increase in an already high level of employment. At present, social unrest is minimal – Vietnam does not want to follow the path that has taken a number of developing countries into destabilisation!