Economy of the Republic of Vietnam
The
Structure
Agriculture and fishing
Agriculture made up around 30% of economic output in South Vietnam, a share that did not vary significantly over the years.
Industry
South Vietnam had a small industrial sector and fell far behind other countries in the region in this respect.
When the republic was established, there were a few industrial facilities left over from the French colonial period, including some tobacco factories, beverages and alcohol, two sugar processing factories (Hiệp Hòa and Khánh Hội), a few machinery factories, and Michelin rubber processing plants.[5] There were some industrial businesses run by local Chinese, including textiles, food processing, while local Vietnamese people had only workshop-size industrial activities.[6] South Vietnam's industry benefited from the immigration of industrialists from North Vietnam who brought with them capital and technology[6] starting with Operation Passage to Freedom in 1954.
Food processing and textiles became the largest industries by 1967, both having increased their capital ten-fold and employing over 17000 workers each. Other important industries included paper, rubber, basic chemicals, and cement.[7] After 1965 industry suffered from escalating warfare and increasing inflows of American consumer goods.[7] Some industries were able to continue growing rapidly, including food processing, wood processing, construction materials, and metals.[8]
South Vietnam's industry suffered from the departure of foreign troops in the early 1970s, which resulted in significantly less demand. Industrial output shrank by 5% in 1972 and by over 20% in 1973 and 1974.[9] By 1973 food processing was by far the largest industry in terms of output (almost half of the total industrial output of 448 billion dong), followed by textiles (around 1/5 of total output, but the largest employer with 32,489 out of 111,964 workers) and chemicals (1/10) (in terms of capital, electricity was the largest industry).[10]
Services
Over the 20 years of South Vietnam's existence, the share of services in the economy grew from around 45% to 50-60%.[1]
Growth stages
Year | 1956 | 1958 | 1960 | 1963 | 1965 | 1967 | 1968 | 1970 | 1972 | 1973 | 1974 |
---|---|---|---|---|---|---|---|---|---|---|---|
South Vietnam | 11.283 | 12.714 | 15.274 | 16.422 | 13.515 | - | - | 10.917 | 9.140 | 10.030 | 10.285 |
North Vietnam | 2.587 | - | 4.113 | 4.702 | 6.000 | 6.406 | 6.983 | 10.689 | 11.313 | 11.145 | 11.026 |
Year | 1956 | 1958 | 1960 | 1962 | 1964 | 1966 | 1968 | 1970 | 1972 | 1974 |
---|---|---|---|---|---|---|---|---|---|---|
South Vietnam | 62 | 88 | 105 | 100 | 118 | 100 | 85 | 81 | 90 | 65 |
North Vietnam | 40 | 50 | 51 | 68 | 59 | 60 | 55 | 60 | 60 | 65 |
Before 1965
Pre-1965 period saw a rather rapid GDP growth rate of the South Vietnam's economy, accompanied by a reasonable
The government of Ngô Đình Điệm carried out a policy of
Economy of the Republic of Vietnam in this period proved to be progressive, however, political conflicts and unrests (armed conflicts between factions, continuous coup d'état, emergence of the Viet Cong) confined the efficiency of those policies.
1965–1969 stage
In this period, the underground economy was booming, the
Graphs are unavailable due to technical issues. There is more info on Phabricator and on MediaWiki.org. |
In 1965, South Vietnam went from being a rice exporter to an importer. Rice imports continued until the dissolution of the state in 1975. This was caused by declines in crop harvests from 1965 to 1968. The production levels began to rise from 1968 onwards due to the expansion of ricelands and increased productivity. This was caused by the increasing use of chemical fertilizers, mechanization and new high-yield crop varieties. The right reason for rice import until 1975 was that the rice demand in
From 1965, export-oriented industrialization policy had to suspense, this led to difficulties to many newly established sectors like textile, cane sugar while some other sectors gained the favorable to development. Industry continued to grow, except in 1968 and 1972 when industry came to a standstill in the context of the soaring war (Tet Offensive and
A notable event incurred in this period, known by its code name as Campaign of Bong Lan (Chiến dịch Bông Lan). This was a currency reform conducted by Nguyễn Văn Thiệu's administration from June 18, 1966 in which new bank notes were issued and commonly known as "bank notes of the second Republic.
1969–1975 period
On 26 August 1970 US ambassador Ellsworth Bunker informed President Richard Nixon that South Vietnam seemed to rely on the United States not only for military support but also for the basic economic commodities that sustained its life. Overwhelmingly dependent on imports, most of which were financed through US aid or American military purchases of piasters at a subsidized rate of exchange, it thus continued to procure more than $750 million in goods and services per year abroad while exporting at best $15 million in locally produced merchandise.[18]
The economy of South Vietnam faced difficulties caused by sudden decrease of demand as the US and its allies steadily reduced their armed forces from South Vietnam over the 1970-72 period. Budget deficit soared regardless of the fact that domestic budget revenues and the US aids increased while the government had to take responsibility for military actions on its own. Hyperinflation incurred in this period. In 1970, the inflation rate (based on CPI in ordinary people Saigonese people) reached up to 36.8%, and in 1973 this rate rose to 44.5%. In last years of the Republic of Vietnam's existence, the government went on to introduce import limitations, export incentives, and encouraged domestic consumption. This led to the rise of exports, and a simultaneous rise in imports.
Post 1975
After 1975, the economy of Vietnam was plagued by enormous difficulties in production, imbalances in supply and demand, inefficiencies in distribution and circulation, soaring inflation rates, and rising debt problems. Vietnam was one of the few countries in modern history to experience a sharp economic deterioration in a postwar reconstruction period. Its peacetime economy was one of the poorest in the world and showed negative to very slow growth in total national output as well as in agricultural and industrial production. Vietnam's gross domestic product (GDP) in 1984 was valued at US$18.1 billion with a per capita income estimated to be between US$200 and US$300 per year. Reasons for this mediocre economic performance included severe climatic conditions that afflicted agricultural crops, bureaucratic mismanagement, elimination of private ownership, extinction of entrepreneurial classes in the South, and military occupation of Cambodia (which resulted in a cutoff of much-needed international aid for reconstruction).[19] With the start of the Đổi Mới economic reforms in 1986 the Vietnamese economy began to improve.
Trade
South Vietnam's major import sources are the United States, France, and Japan. Kerosene, medicines, iron and steel, equipment, and fertilizers were major imports prior to 1965. This represents the Republic of Vietnam's progress toward industrialization. Rice, consumer products, petrol, and supplies were the most major imports after 1965. The difference in import structure before and after 1965 was mostly due to the impact of the war on local output and demand. South Vietnam's production was stagnant, therefore consumer goods imports increased. Likewise, as military supplies increased, so did imports of supplies and raw materials.
At one point there were minor commercial relations between the Republic of Vietnam and the Democratic Republic of Vietnam, these interactions ceased in 1959, when political ties between the two sides deteriorated. [20]
See also
- Commercial Import Program
- Economic history of Vietnam
- For more information see the Vietnamese language version of this article
References
- ^ a b c d Dang (2004): 283
- ^ a b Dang (2004): 227
- ^ Dang (2004): 299
- ^ Dang (2004): 298-302
- ^ Dang (2004): 284
- ^ a b Dang (2004): 285
- ^ a b Dang (2004): 287
- ^ Dang (2004): 288
- ^ Dang (2004): 289
- ^ Dang (2004): 295
- ^ Economic growth around the world from ancient times to the present day: Statistical Tables, Phần 1. A.G. Vinogradov. WP IPGEB. P. 88-89
- ^ Fledgling Financial Markets in Vietnam's Transition Economy, 1986-2003. Vuong Quan Hoang. P.5
- ^ Lâm Quang Huyên (1997), Cách mạng ruộng đất ở miền Nam Việt Nam (Land reforms in South Vietnam), Social Sciences Publishing House, Hanoi, page 39.
- Socialist Republic of Vietnamlater, though this country was not a market economy, was a succession of the Republic of Vietnam.
- ^ "Nhà Máy Giấy An Hảo", Thế Giới Tự Do, số 3 Tập X, trang 9.
- ^ Tsuji, Hiroshi (1977). "Rice Economy and Rice Policy in South Vietnam up to 1974". East Asian Studies, 15(3):264
- ^ According to Đặng Phong (2004), page 230, National Front for the Liberation of South Vietnam purchased rice from the South Vietnam-controlled zones.
- .
- ^ "Vietnam - the Economy".
- ^ Đặng, Phong (2004). Kinh tế miền Nam Việt Nam thời kì 1955-1975 (in Vietnamese). Nhà xuất bản Khoa học xã hội. pp. 357–359.
- Vuong, Quan Hoang (2010), Financial Markets in Vietnam's Transition Economy: Facts, Insights, Implications, ISBN 978-3-639-23383-4, VDM Verlag, 66123 Saarbrücken, Germany, February.
- Đặng Phong (2004), Kinh tế Miền Nam Việt nam thời kỳ 1955 - 1975, Nhà xuất bản Khoa học xã hội, Hà Nội, tháng 12.
- Douglas C. Dacy (1986), Foreign aid, war, and economic development: South Vietnam, 1955–1975, Cambridge University Press.
- Trần Văn Thọ chủ biên (2000), Kinh tế Việt Nam 1955 - 2000: Tính toán mới, phân tích mới, Nhà xuất bản Thống kê, Hà Nội, tháng 12.
- Ngân hàng Quốc gia Việt Nam (1974), Kinh tế niên báo, Sài Gòn.