The Centrally Planned Subsidized EconomyOf Vietnam Before 1986

Nguyen Ky Vien – MA3N0214

VIETNAM SITUATION AFTER WAR

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

THE FINANCIAL MARKET OF VIETNAM BEFORE 1986

THE INNOVATION CAMPAIGN 1986

CONTENTS

• April 30, 1975 marked the end of the war and the complete liberation of Vietnam

• Still a poor, backward agricultural country

• Low production target per capita

VIETNAM SITUATION AFTER WAR

VIETNAM SITUATION AFTER WAR

The mechanism of economic management:

• Based on the system of public ownership of means of production;

• The State, instead of the market, decides the whole production process (What to produce? How to produce? And who to produce for?);

• Distribution based on work.

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

FIRSTLY, Major means of production were nationalized

• The revolution of production relationship (nationalize all private enterprises , bringing private economy into cooperatives )

• two forms of ownership: State economy and collective economy.

• The mechanism based on public property dominated the whole production of society.

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

SECONDLY, The management mechanism

• The State controlled the economy through legal norms and commands

• The State set production norms for production and business units

• The relationship between the State and economic units was of allocation-delivery

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

THIRDLY, The distribution of income was based on the principle of egalitarianism

• The rate of pay was mainly defined on: Qualification; The difficulty of the work; Function; Service seniority

• The coupon-based system of distribution of basic necessities

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

The coupon-based system of distribution

THE CENTRALLY PLANNED SUBSIDIZED ECONOMY

• No financial markets had existed before the 1986 innovation campaign startup

• The only three financial organisations: National Bank of Vietnam (NBV), Bank for investment and development of Vietnam (BIDV), and Bank for foreign trade of Vietnam (VCB)

• There was no commercial banks

THE FINANCIAL MARKET OF VIETNAM BEFORE 1986

• facilitate the transition from a centralized economy to a "socialist-oriented market economy

• combined government planning with free-market incentives

• removed price controls

• enabled to sell the goods in the marketplace

• encouraged the establishment of private businesses and foreign investment

THE INNOVATION CAMPAIGN 1986

THANK YOU FOR YOUR ATTENTION!