Socialist republic of Vietnam claimed
Following the communist victory, Vietnam remained theoretically divided (although reunified in Theory) until July 2, 1976, when the Socialist Republic of Vietnam was officially proclaimed, with its capital at Hanoi. Vietnam at peace faced formidable problems. In the south alone, millions of people had been made homeless by the war, and more than one-seventh of the population had been killed or wounded; the costs in North Vietnam were probably the same or higher. Plans to reconstruct the country called for the expansion of industry in the North and of agriculture in the South. Within two years of the communist victory, however, it became clear that Vietnam would face major difficulties in realizing its goals.
Hanoi had been at war for more than a generation, Ho Chi Minh had died in 1969—and the bureaucracy was poorly trained to deal with the problems of peacetime economic recovery. The government encountered considerable resistance to its policies, particularly in the huge metropolis of Saigon (renamed Ho Chi Minh City in 1976), where members of the commercial sector—many of whom were ethnic Chinese—sought to avoid cooperating in the new socialist economic measures and resisted assignment to “new economic zones” in the countryside. During the late 1970s the country also suffered major floods and drought that severely reduced food production. When the regime suddenly announced a program calling for the socialization of industry and agriculture in the south in early 1978, hundreds of thousands of people (mainly ethnic Chinese) fled the country on foot or by boat.
Under such severe external pressure, Vietnam suffered continuing economic difficulties. The cost of stationing troops in Cambodia and of maintaining a strong defensive position along the Chinese border was especially heavy. To make matters worse, the regime encountered continuing problems in integrating the southern provinces into a socialist economy. In the early 1980s the government announced a number of reforms to spur the economy. Then, following the death of veteran party chief Le Duan in 1986 (Le Duan had succeeded Ho Chi Minh as party chief in 1960) and his succession by the pro-reform Nguyen Van Linh, the party launched a program of sweeping economic and institutional renovation (doi moi). Actual implementation, however, did not begin until 1988, when a deepening economic crisis and declining support from the Soviet Union compelled the government to slash spending, court foreign investment, and liberalize trade. Other policies essentially legalized free market activities that the government had previously tried to limit or suppress.
Hanoi had been at war for more than a generation, Ho Chi Minh had died in 1969—and the bureaucracy was poorly trained to deal with the problems of peacetime economic recovery. The government encountered considerable resistance to its policies, particularly in the huge metropolis of Saigon (renamed Ho Chi Minh City in 1976), where members of the commercial sector—many of whom were ethnic Chinese—sought to avoid cooperating in the new socialist economic measures and resisted assignment to “new economic zones” in the countryside. During the late 1970s the country also suffered major floods and drought that severely reduced food production. When the regime suddenly announced a program calling for the socialization of industry and agriculture in the south in early 1978, hundreds of thousands of people (mainly ethnic Chinese) fled the country on foot or by boat.
Under such severe external pressure, Vietnam suffered continuing economic difficulties. The cost of stationing troops in Cambodia and of maintaining a strong defensive position along the Chinese border was especially heavy. To make matters worse, the regime encountered continuing problems in integrating the southern provinces into a socialist economy. In the early 1980s the government announced a number of reforms to spur the economy. Then, following the death of veteran party chief Le Duan in 1986 (Le Duan had succeeded Ho Chi Minh as party chief in 1960) and his succession by the pro-reform Nguyen Van Linh, the party launched a program of sweeping economic and institutional renovation (doi moi). Actual implementation, however, did not begin until 1988, when a deepening economic crisis and declining support from the Soviet Union compelled the government to slash spending, court foreign investment, and liberalize trade. Other policies essentially legalized free market activities that the government had previously tried to limit or suppress.