Vietnam economy

Vietnam is one of the poorest countries in Asia with an estimated per capita income of less than US$300 per year, and hard currency debts of US$1.4 billion (owed mainly to Russia, the IMF and Japan). Unable to repay these loans, Vietnam has been unofficially bankrupt since the 1980s.

An agreement reached in 1996 reduced Vietnam's debt by 50%, with the remainder to be paid off gradually. The country's improving economy increases the possibility that it will meet its obligations to lenders, and that Vietnam will eventually be issuing new bonds overseas.

Despite its hard-working, educated workforce, the country's economy is beset by low wages, poor infrastructure, a trade deficit, unemployment, under-employment and, until recently, erratic runaway inflation (700% in 1986, 30% in 1989, 50% in 1991, 3% in 1996 and 8% in 1998).

The economy was hurt by wartime infrastructure damage (not a single bridge in the North survived American air raids, while in the South many bridges were blown up by the VC), but by the government's own admission the present economic fiasco is the result of the ideologically driven policies that were followed after reunification, plus corruption and the burden of heavy military spending.

Just how the average Vietnamese manages to survive is a mystery. Salaries in Ho Chi Minh City are in the range of US$50 to US$90 per month, but elsewhere they're about half that. You simply can't survive on such wages unless you can grow your own food and build your own house (possible in the countryside, but not in Saigon or Hanoi). So people scrounge on the side, finding some odd job they can do. Many women are forced to resort to part-time prostitution, while government officials and police often turn to corruption.

Although Vietnam and Russia are still officially as close as lips and teeth, Vietnamese from all parts of the country seem to harbour an unreserved hostility towards the few remaining Russian experts in their country. This bitterness is an outgrowth or the widespread belief that Soviet economic policies are to blame for Vietnam's economy going straight down the toilet after reunification.

The once ubiquitous posters of those two white guys, Marx and Lenin, served to underline the foreign origin of much of the Vietnamese Party's unpopular ideology, including collectivization and centralized planning. Perhaps not that surprisingly, the posters disappeared almost overnight with the Soviet Union's demise in 1991.

GDP: purchasing power parity - $143.1 billion (1999 est.)

GDP - real growth rate: 4.8% (1999 est.)

GDP - per capita: purchasing power parity - $1,850 (1999 est.)

GDP - composition by sector:
agriculture: 26%
industry: 33%
services: 41% (1998 est.)

Population below poverty line: 37% (1998 est.)

Household income or consumption by percentage share:
lowest 10%: 3.5%
highest 10%: 29% (1993)

Inflation rate (consumer prices): 4% (1999 est.)

Labor force: 38.2 million (1998 est.)

Labor force - by occupation: agriculture 67%, industry and services 33% (1997 est.)

Unemployment rate: 25% (1995 est.)

Budget:
revenues: $5.6 billion
expenditures: $6 billion, including capital expenditures of $1.7 billion (1996 est.)

Industries: food processing, garments, shoes, machine building, mining, cement, chemical fertilizer, glass, tires, oil, coal, steel, paper

Industrial production growth rate: 10.3% (1999 est.)

Electricity - production: 20.62 billion kWh (1998)

Electricity - production by source:
fossil fuel: 12.95%
hydro: 87.05%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 19.177 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: paddy rice, corn, potatoes, rubber, soybeans, coffee, tea, bananas; poultry, pigs; fish

Exports: $11.5 billion (f.o.b., 1999 est.)

Exports - commodities: crude oil, marine products, rice, coffee, rubber, tea, garments, shoes

Exports - partners: Japan, Germany, Singapore, Taiwan, Hong Kong, France, South Korea, US, China

Imports: $11.6 billion (f.o.b., 1999 est.)

Imports - commodities: machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement, motorcycles

Imports - partners: Singapore, South Korea, Japan, France, Hong Kong, Taiwan, Thailand, Sweden

Debt - external: $7.3 billion Western countries; $4.5 billion CEMA debts primarily to Russia; $9 billion to $18 billion nonconvertible debt (former CEMA, Iraq, Iran)

Economic aid - recipient: $2 billion in credits and grants pledged by international donors for 1999 and again for 2000

Currency: 1 new dong (D) = 100 xu

Exchange rates: new dong (D) per US$1 - 14,020 (January 2000), 13,900 (December 1998), 11,100 (December 1996), 11,193 (1995 average), 11,000 (October 1994), 10,800 (November 1993)

Fiscal year: calendar year