The Vietnamese Economy: 1977-1985

Early Movement Toward Reform

In 1979, the Central Committee took some steps away from harsh economic controls by backing away from collectivization of family farms, eliminating the rural control stations, accepting small-scale retail private enterprises, and decentralizing decisions in state-run enterprises

In 1981, additional actions were taken to liberalize agriculture; these consisted mainly of permitting peasants to keep some of what they produced and selling it on open markets; the collective system generally was retained where it was already established

By 1983, agricultural production had reached national subsistence levels and a small industry/handicrafts sector had emerged

The very success of initial reforms actions produced a backlash among the party ideologues, who feared a capitalist south Vietnam would undermine the control by the communist north

In the midst of an emerging debate within the Party hierarchy over the direction of Vietnam's political economy, Gorbachev came to power in the Soviet Union

The impact of reformist ideas from the Soviet Union was nearly as strong as the effects of the large and rapid declines in Soviet aid to Vietnam, even as Vietnam remained in Cambodia