Transition and economic reforms in Vietnam in the 1980s. Causes, course of process and effects

Abstract

The process of transition of the socialist countries, initiated over three decades ago, was unprecedented and complex. The description and analysis of the ways behind the transition from a centrally planned economy to a market economy or hybrid models may not only be the basis for scientific reflection, but also the formulation of recommendations for other developing countries in the reform process. One of the more interesting examples is Vietnam, which has experienced one of the highest rates of economic growth and poverty reduction in the world, combined with achieving an overall macroeconomic stability. In the light of these events, it is reasonable to inquire about the transformation process in Vietnam and how it affected its economy. To answer these questions, a historical analysis is used, based on domestic and foreign literature and the analysis of existing data.
The analysis shows that a key feature of the reform process in Vietnam was that the efforts were concentrated where production could react quickly, i.e. where the elasticity of supply was high, so as to ensure that growth was sustained and accelerated during the transition, favoring high rates of investment and savings. The relatively harmonious combination of spontaneous reforms at the grassroots level and decisive actions by the top political leadership could be seen as one of the unique features of the Vietnamese reforms and the reason why the Vietnamese reforms fundamentally changed the foundations of the old socio-economic model without causing a deep recession.