Capital: Hanoi
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Introduction Vietnam has been one of the most fought-over nations in modern history, however the country has enjoyed relative peace in the past two decades. The war between North and South Vietnam throughout the 1960s and early 1970s grabbed the world's attention, and left behind a legacy of destruction. Today Vietnam is one of the world's few remaining communist states. The government has been introducing economic reforms since 1986, but progress has been slow and state-owned enterprises still dominate the economy.
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History Vietnam has been one of the most fought-over nations in modern history, and it is only in recent decades that the country has experienced peace and stability. What is now Vietnam was first united under a single leader in 1802 but the French soon stepped in and by 1901, Vietnam, Cambodia and Laos had fallen under a central French administration, forming the Union Indochinoise (Indochina Union). Following World War II, a war ensued for nearly a decade between the French in the south and independence leader Ho Chi Minh's communist forces in the north. France was defeated at Dien Bien Phu in May 1954 and a ceasefire agreement was signed a month later in Geneva, providing for a single Vietnam divided at the 17th parallel. Elections were planned for 1956, after which the country was to be united, but they never took place and Vietnam remained divided, run by Soviet and Chinese-backed communists in the north and a US-backed administration in the south. In 1960, the southern-based armed groups united as the National Liberation Front, or Viet Cong, and began increasing their communist-led guerrilla warfare. Following a military coup in the south in 1963, the US began to increase its military presence in South Vietnam, concerned about the potential 'domino effect' of communism in the region. In 1964 the US claimed North Vietnamese forces attacked US vessels patrolling the Gulf of Tonkin. The US Congress responded, approving the use of US forces in South East Asia. In early 1965, the United States began bombing North Vietnam. For the next eight years, the US and a number of allies engaged in a jungle warfare with the Viet Cong and North Vietnamese soldiers. Widescale bombing destroyed much of the country. There were heavy casualties on both sides and atrocities were committed against civilians. In January 1973, the warring sides agreed to a ceasefire, known as the Paris Peace Agreement, and US forces withdrew. However, there was no ceasefire and heavy fighting continued throughout Indochina. In early 1975, North Vietnam launched a final campaign, entering Saigon on April 30, defeating the South Vietnamese. Saigon was renamed Ho Chi Minh City. It was a humiliating defeat for the US. The war displaced millions and sparked a major refugee exodus. Formal reunification took place on 2 July 1976 with the foundation of the Socialist Republic of Vietnam. Vietnam's recovery from the war was slow and protracted, punctuated at times by border skirmishes with Cambodia and China. In late 1978 Vietnamese forces invaded Cambodia, forced the Khmer Rouge regime to flee the capital, Phnom Penh and installed a pro-Hanoi government. China launched a retaliatory strike against Vietnam in early 1979, but withdrew within weeks. Vietnam withdrew the last of its troops from Cambodia in 1989. Sporadic clashes between Vietnam and China continued throughout the 1980s and tensions between the two countries over competing claims in the South China Sea continue. In 1994, the United States lifted its economic embargo against Vietnam and in 1995 the two countries established full diplomatic relations. The following year, Vietnam became the seventh member of the Association of South East Asian Nations (ASEAN). In July 2000, the US and Vietnam signed an agreement to normalise trading relations. In 2006, after 11 years of preparation and eight years of negotiation, Vietnam won approval to become the 150th member of the World Trade Organisation (WTO). Government Vietnam is one of the world's few remaining one-party communist states. Decision making in Vietnam is shared by national and provincial government and agencies. Political power lies with the Communist Party of Vietnam, which is led by the secretary-general. The party's peak organ, the 15-member Politburo, holds authority over social, economic, labour, defence, security and foreign policy. The Politburo is elected by the Party's Central Committee, which is made up of 150 members. Vietnam's president, who is the chief of state, is elected by the National Assembly from among its members for a five-year term. The prime minister, who is the head of the government, is appointed by the president from among the members of the National Assembly. In 1999, the Communist Party of Vietnam launched a campaign to rid the government of corruption. Several high ranking officials have been removed from office for corruption or mismanagement. Political reform is still continuing, but dissent is not broadly accepted. Economy Vietnam is a poor country with a large population. Its economy was virtually destroyed by the war in Vietnam, which ended in 1975. The communist state used to rely on financial support from the old Soviet bloc and China, but with the demise of the Soviet Union, it has had to fare mostly on its own. Vietnam has traditionally had an agrarian economy with agriculture employing the bulk of the workforce. Rice, coffee, tea and rubber are the major crops. The country has been in transition from a centrally-planned to a market-based economy since 1986. The program of reforms, known as doi moi (renovation), is aimed at shifting towards "market economy with socialist orientation". Progress has been slow and state-owned enterprises still dominate the economy. Foreign direct investment is worth about 15 per cent of Vietnam's GDP. However, the government is trying to improve the investment climate by allowing more foreign investment and privatising state owned enterprises (SOEs). In 2002, 150 of 5,600 remaining SOEs were reformed. The government plans to reduce the number of SOEs to about 2,000 by the year 2005. Trade and investment opportunities in Vietnam have also been hampered by complex taxation and foreign investment laws, a highly regulated import system and the poor state of the financial system. A bilateral trade agreement between Vietnam and the United States came into effect in late 2001. The pact is expected to significantly increase Vietnam's exports to the US. In 2006, after 11 years of preparation and eight years of negotiation, Vietnam won approval to become the 150th member of the World Trade Organisation (WTO), which is expected to create new opportunities for trade expansion. |
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