Vietnam Country Profile

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Lotus
Lotus

Vietnam, a one-party Communist state, has one of south-east Asia’s fastest-growing economies and has set its sights on becoming a developed nation by 2020.

It became a unified country once more in 1975 when the armed forces of the Communist north seized the south.

This followed three decades of bitter wars, in which the Communists fought first against the colonial power France, then against South Vietnam and its US backers. In its latter stages, the conflict held the attention of the world.

The US joined the hostilities in order to stem the “domino effect” of successive countries falling to Communism.

The jungle war produced heavy casualties on both sides, atrocities against civilians, and the indiscriminate destruction and contamination of much of the landscape.

Ao dai
Ao dai

A visit to Vietnam by US President Bill Clinton in November 2000 was presented as the culmination of American efforts to normalise relations with the former enemy.

Politics: Vietnam is a one-party Communist state; it became unified in 1975 after three decades of war

Economy: It is becoming a major manufacturing center; it is the second biggest supplier of clothes to the US

International: Long running territorial dispute with China over parts of South China Sea, rich in oil and fish

Vietnam struggled to find its feet after unification and tried at first to organised the agricultural economy along strict collectivist lines.

But elements of market forces and private enterprise were introduced from the late 1980s and a stock exchange opened in 2000.

Foreign investment has grown and the US is Vietnam’s main trading partner. In the cities, the consumer market is fueled by the appetite of a young, middle class for electronic and luxury goods. After 12 years of negotiations the country joined the World Trade Organization in January 2007.

Coffee and Flowers in Hanoi
Coffee and Flowers in Hanoi

But the disparity in wealth between urban and rural Vietnam is wide and some Communist Party leaders worry that too much economic liberalisation will weaken their power base.

Vietnam has also struggled to restrain its trade and budget deficits, as well as the inflation rate, which was in double digits at the start of 2010.

Despite pursuing economic reform, the ruling Communist Party shows little willingness to give up its monopoly on political power.

Vietnam has been accused of suppressing political dissent and religious freedom. Rights groups have singled out Hanoi’s treatment of ethnic minority hill tribe people, collectively known as Montanans.