Trade and Industry Reforms

The Shortcomings

 BY van Nguyen




Do Muoi's task not only focused on destroying "the capitalist bourgeoisie strongholds" but also establishing a centralized economic system, "stopping peculation and capitalist c, thus competition, propelling socialist production with goods and commodities surplus to satisfy the needs of the people. As regards agricultural products, State buying and selling stations would eventually operative and regulate trading to secure economic self-sufficiency. This collective economy proved to be fruitless from the start, nevertheless. No sooner had the campaigns for private trade and industry reforms completed, all sectors of the economy, including means of production, storage, exchange and distribution, loosened and became paralyzed due to voluntarism and strict observance of Marxist-Leninist dogmas on the part of the leaders and lack of experience and expertise in the management of public affairs on the part of the bureaucracy at all levels. Almost all private factories and business enterprises incorporated in State joint-ventures gradually went bankrupt. Industry machinery and equipment ruined in storehouses as a result of mismanagement. They were even divided as "booties" among the cadres in charge. Store departments were partitioned and allocated to State employees. Due to mismanagement the MSG VISO, for instance, was paralyzed then ceased to operate. Executive cadres from the North were completely ignorant of a chain line of production.  Technicians and engineers from the North working at the textile manufacturing factory Tat Thanh had not the least know-how to operate high-tech machines. Quite a few experts of the old regime, among them were the directors of the COGIDO Paper Factory, Ha Tien Cement Mill, Thu Duc Electric Plant, were unwillingly released from reeducation camps to help alleviate the '"Revolution" from difficulty.     

     The Economic Life of the Population

Several months after the “liberation of the South,” economic penury loomrd then and escalated., Scarcitiy of necessities shortage of foods became increasingly acute. Prices soared even the “revolutionary administration was in complete control of the national economy. It  declared that the confusion resulted from the crimes of comprador barons. Prior to June 1975, the price for 1 kg. of MSG was 5,000 dong; it was 30.000 dong only two months late that persisted in  causing troubles..  Salt was sold at 700 dong/kg in June; it was 3000 dong in August. A motorbike spark plug rose from 7000 d0ng to 17,000 a piece. Speculators  carried on business maliciouslly. Nguyen Van Linh Party –secretary of Ho Chi Minh City concurrently Chairman of the Council of Trade and Industry Reforms, after the meeting with the private trade and industry c circles in Saigon, declared that they all welcomed the policy of the State. They even condemned the crimes by the remnants of the comprador bourgeoisie for vile business practices to sabotage the achievements of the “Revolution.” During the X2 campaign, the administration arrested 92 comprador speculators, confiscated 918, 4 million piasters, 1,200 Frans, 134,578 U.S. dollars, 7691 taels of jewelry, 60,000 tons of manure, 80,000 tons of chemicals. 457 houses, 4 theaters, one runner plantation, and so on.   The then Party vice-secretary of Ho Chi Minh City had remarks that after the reforms State the trades systems had practically replaced private stores. Those private shops in the business center opposite of Cau Ong Lanh Market and Cau Muoi Market were to stop business giving place to State business enterprise. Frequent raids were launched to sweep of private business households.

Confusion in the market spread following the operations for private and industry reforms. The common population became penniless. They began to sell their remaining properties in exchange for foods. Open markets where all kinds of used merchandise could be found mushroomed almost everywhere in the onetime luxurious shopping centers, on Catinat Street, at Le Loi Boulevard, and along Dong Khanh Avenue. All kinds of used clothing’s, utensils, and furniture were displayed for sale in the streets of Saigon and almost all alleys in the suburban areas in  Khanh Hoi, Binh Dong, Tan Son Nhat, Tan Dinh, Ba Chieu, and so on. Peddlers sold at lowest prices used fountain pens, eye-glasses, watches, ventilators, books, packages of cigarettes, bikes, motorbikes, and other household articles, they roamed the side-walks, selling and buying in hiding for fear of police raids. Saigon was hurry in chaos.

Penury of necessities and shortages of goods aggravated the situation. Speculations of commodities and hoarding of merchandise resurged.  The official press shifted the blame on the remnants of comprador bourgeoisie. Open markets were the rendezvous of hooligans, thieves and gangsters met exchanged contrabands. Police raids were again activated to disband all gatherings of the same sort. The economy was really at the deadlock. Months of reforms passed by, shortcomings deepened, and efforts for rectification of errors accelerated, but negative results prevailed. Food shortages became increasingly serious. The peasantry in the Mekong Delta resisted to arbitrary measures of agrarian reforms. Silent opposition to the authorities speeded up in the rural areas. Dissent was pervasive in the cities, the intellectuals who had ever had sympathy with the “Revolution” since the Vietnam showed reluctance. In a meeting with the intellectuals of Saigon, Vo Van Kiet calmed down for a solution, asking them to stay in the country. He said emphatically promised that “if the situation still lags sluggishly within three years to come, if they still want to leave the country, he will willingly accompany them to the airport.”

Nguyen Van Tran, a veteran Communist from the South, expressed bitter remarks as regards the economic situation of the South at the time.  By the takeover of power in the South by force and in violation of the Paris Peace Treaty of 1973, Hanoi applied the so-called “socialist economic transformation,” coercing the people of the South into accepting an economic system that upset their ways of living. The Vietnamese in the South, deep in ‘their hearts, had been for a long time impregnated with patriotism and compassion for freedom and democracy couldn’t help from reacting negatively against “socialist transformation” was something bizarre to them. A communist might think the Communist seizure of power in the South was a means to an end to the unification of the country. That was only the flip side to the coin. The population in the South, in reality, largely felt indignant of the political discrimination incorporated in the policies the new regime coercively imposed on them. 

The Vietnamese Workers’ Party Secretary-general Truong Chinh, who earnestly insulted the French colonialists for having divided Vietnam and disabled her economy, quickly affected a political unification regardless of the absence of a popular mandate, and thus, breaching the ultimate goal of the Paris Peace Treaty of 1973 by which the Communist government pledged to abide. It was, in practice, a premature plan of unification that would only result in chaos. Updated law-orders and arêtes promulgated in 1955 in the North were re-applied in haste in the South. Besides, the transformation of the economy the South following the model previously applied in the North was intensively corrupted by inconsistent policies and poor methods of management by hard-headed executioners.  It was real damage to the economy of the South, creating mess in national economy. To the detriment of the Party leadership’s prestige, the agrarian policy and measures of control of the economy in the South by Hanoi, in particular, only made the development of agriculture in the South more difficult. The most serious mistake was that the concept of parity of economic development conceived by Hanoi was both unrealistic and voluntarism. In the building of national economy, in the narrow-minded leadership of the Communist Party, the economy in the South should not outgrow and surpass the economy of the North. Accordingly, ’all medical equipment’s at Cho Ray Hospital of Saigon, for example, should be disassembled and brought to Hanoi (Nguyen Van Tran, Viet cho Me va Quoc Hoi,1995) .   

    Corrupt Practices

Reports to the Central Party Committee said that the local authorities had confiscated 400 kgs of metal or of gold color. Metal of gold color, as the words imply, may be real gold or metal plated with gold, which file and rank cadres substituted for real gold. The people of the South knew the wealth of the South.as easily as counting it from their pockets inside out. The Chinese merchants who accumulated their wealth during the war were a case in point. The Vietnamese were mostly concerned about politics. The Chinese, in contrast, were only concerned about conducting business, making profits, speculating stocks, and hoarding merchandise to bring in lucrative interests. Many of them became powerful tycoons, amassed wealth cunningly and without risk. To everyone’s surprise, only two or three unlucky wealthiest Chinese merchants got entrapped during goods-in store inspection.  The State could confiscate only some hundred kilograms of gold. The immensely hidden wealth of Chinese capitalist compradors was right there, in their ware houses and homes, within the walls and underneath in the basement.  It was well beyond reality when throughout the South, from the Binh Dinh, Quang Tri, and Thua Thien provinces in the North to the My Tho, Long Xuyen and An Xuyen provinces in the South, the cadres could only find some four hundred kilograms of gold.  It was a real fable!  Scenes of cupid Chinese merchants committed in various forms of suicide due to State private property expropriation during this time occurred daily and everywhere. Evidences of thefts of public wealth were numerous and varied according to situations, between and among the cadres and authorities in charge.

 

The division of the “booties of war” continued to take place to a large extent. It unfolded in broad daylight at the golf course near the Tan Son Nhat Airport which was originally under the administration of the People’s Army Headquarters where the Commando Command was first stationed, and, later, was transferred to the construction company of the Tan Binh District People's Council. The theft was phenomenal.  The Command, out of demand, called for capital to build a shopping mall there. The department stores in the mall had to be sold to the public in exchange for gold for the new construction of buildings,  For the sake of convenience, these  “people's properties” were then sold back to “the people,” and the gold collected from the people was punctually divided among “the servants of the people!” Such illegal division and transfer of national properties took place in different forms, within the walls of the barracks in the Go Vap District Office and the Ministry of Public Works office buildings on Le Loi Street, First District, and Saigon. Distant or near relatives of rank and file cadres also had their shares. Well, in a way, it is simply fair play! If you just wait, you will never have a share! It is wiser to divide, now and right here. I divide, you divide, and he divides. We all share, and everyone is happy! (Van Duc, VHRW, 17 (1993)).

THE FIVE-YEAR ECONOMIC PLAN

                                                                                                                                                                                                          THE

Ideological Premise and and Practices

By Van Nguyen

 Perceiving problems and difficulties, the Fourth Congress of the Communist Party (1976), first and foremost, focused on economic platforms. It vowed to carry out the development of heavy industry, light industry, and industrialized agriculture. It promised to build the socialist economic centralism and to develop the regional economy within the framework of integration, weaving it into a national unified economic structure, to promote coordination of all forces of production, establishing and perfecting the systematic correlations between the new modes of production. The motto was: "To move fast, to move vigorously, to move sreadly toward socialism." To attain these professed objectives, the Communist Party would determinedly carry out the trade and industry reforms, the land reforms, and the change of currency. It would appropriate the entirety of wealth and properties of the bourgeoisie and transferred their ownership to the Party, abolish the private trade and industry enterprises and create in its place a state collective system of economy grounded on the workings of State industrial establishments, trade companies, and networks of distribution of goods and commodities in accordance with the Party's policy.

The national August 1976 general elections nominally reunified the portioned country. Vietnam became the Socialist Republic of Vietnam. In September 1976, Premier Pham Van Dong declared that his compatriots, in both the North and the South, were "translating their revolutionary heroic fervor they had displayed during the war into a fight for creative labor production in their actual acquisition of wealth and strength. On March 29, 1976, Vice-premier Nguyen Duy Trinh issued in a declaration the State policy of the Socialist Republic of Vietnam on private trade and industry in the South. The new policy was destined to edify an economy, grounded on the principles of progress of socialism for the whole country. thereby  organizing it into a unified system, and gradually effacing social inequality. bondage bound by ff0reign countries  while re-organizing labor forces and creating a new system of distribution of productions benefitting justice and guaranteeing the economic life of the people, especially the people’s working class and equally effacing the class of comprador capitalism and the remnants of the exploiting class of feudalism in the South. In August 1978, after successive campaigns for eliminating the comprador bourgeoisie and remnants of imperialism and appropriating their properties, Vietnamese Communist leaders determinedly carried out of its programs of reforms in the country’s economic system. The programs began with a process of commutations designed to end up the economic structures and practices of the old South.  

     The Trade and Industry Reforms

The trade and Industry practically began two years and a half after campaigns for appropriation of private trade and industry properties, dislodging the comprador bourgeoisie, The Communist administration then set to launch campaigns for trade and industry reforms, drastically dismantling the comprador bourgeoisie and eradicating the grass-roots petty bourgeoisie and remnants of imperialism. Do Muoi, the veteran chief architect for the campaigns for dislocating the comprador bourgeoisie after the takeover of the North in 1954 was sent to the South by the Vietnamese Workers’ Party Politburo to activate the campaign.

Do Muoi was assigned, first, Chief of the Trade and Industry Reforms Bureau. Upon his assignment, he immediately formed a Steering Committee and eleven task force groups to carry out his task.  Members of the task force were recruited from the cadres in the army and the security police. Six of the eleven task force groups were placed under the command of Tran Van Danh, the Vice-commander of Military Zone 7--Saigon and the surrounding areas. The other five groups were assigned to work under the direction of Cao Dang Chiem, the chief of Security Service in Saigon.  For two consecutive years, the operations for trade and industry reforms were developed throughout the cities and provinces in the South. The greatest amount of properties, which was valued at 6 billion dollars, was reportedly was sized and divided among the corrupt nomenclature (Bui Tin, Mat That, 1993: 79). 

In a string of concerted efforts, Do Muoi and his staff applied all measures to activate successive operations to achieve the objectives set forth for the trade and industry reform, similarly to the ones like Do Muoi had done in the campaign for confiscation of private properties of the petty bourgeoisie following the partition of the country in 1954. The goal, in general, was to reform private trade and industry, restructuring and incorporating them into State establishments and corporations operating under State control while alienating the imperialist-styled competition and preventing economic crisis resulting from surplus and labor exploitation, thus assuring the needs of the people, and securing self-sufficiency in agreement with the principles of economic centralism.   

On February 16, 1978, Do Muoi replaced Nguyen Van Linh, who was then the Head of the Central Committee for Socialist Reforms in the South to head the campaign for Trade and Industry Reforms.  On March 23, 1978, the Saigon press published the executive order 341/QD-UB of the city People's Council.  According to the official daily the campaign had achieved the great objectives of the task in compliance with the policy of the State. City dwellers observed the laws obediently. All private trade transactions and industry establishment stopped operations. Economic centralism entered, and new economic practices were performed as directed by competent authorities.

In practice, practitioners of all private trades and industry practices were ordered to stop services and activities. Private business PR actioners were instructed to be ready for a general in-store products inspection. They ought to adapt themselves to the new modes of economy and activities. From early morning on the same day, small and large groups of vanguard guards circulated the streets, surrounded, and watched business buildings, houses, and offices of the comprador bourgeois suspected of economic sabotage. Twenty-eight thousand seven handed and eighty-seven (28,787) bourgeoisie households were placed under investigation and subject to management rectifications and administrative control. Upon completion of the general inspection, more than six thousand comprador bourgeoisie households and ten thousand small business households were targeted with inspection and properties dispossession.    

     Operations for Trade and Industry Reforms in Saigon

The operations expanded to residential quarters to “dig at the roots of the hidden wealth of the vile and cupid comprador bourgeoisie.”  Comprador bourgeois in residential quarters were targeted with frequent visits of the local cadres. They were heartily encouraged to offer their trade facilities and industry factories to the State.  Having offered their properties, many of them were promised to favors and even positions in the State enterprises. Many were invited to make a tour in the socialist North to see the grandiose achievements of the Party. Nevertheless, the reality proved the reverse to be true.  Ngo Quang Thu, the owner of Saigon Sloughing Tractors Company on Tran Hung Dao Boulevard sought by all means to evade the country after his tour trip in the socialist North. The multi-millionaire Hoang Kim Quy was sent to camp for reeducation and later died of hard labor. The best known wealthiest comprador Ung Thi besought favors beside the Saigon Military Administration Council to let him leave the country, having offered to the State all his estate properties and hidden wealth. 

“The processes of voluntary offering of property to the State of the comprador bourgeois in the South were, in general, similar to those applied under the direction of Do Muoi during the appropriation of private industry and business enterprises in the North during the years 1959-60. The proprietor had “the right” to offer to the State his properties, both real estate and hidden wealth. The authorities declared that this “act of will” was only done on a voluntary basis. No one was forced to do that. Property offer, in reality, was done at the time of inventory taking and in the presence of the presence of the local teams of inspection, the cadres, and guards! There were procedures to be applied. The proprietor had to apply for a due application, to follow the instructions as directed by the team of inspection of the board of the local ward. Having completed the application, the proprietor had to wait for the State's approval. He also had to apply for a job in a State joint-venture company created by the local authorities and wait to see whether or not if he would be hired. There was no official formula. The cadres would also instruct the applicant how to write the application. This application must be written in a frank and earnest manner, attesting by such statement as "his reeducation by the State has granted him and his family a great honor and happiness and also given him an opportunity for him to make himself to become a worker-- his ever-brooding desire to serve. His offer of possessions to the State --establishments and business enterprise-- was entirely voluntary." Still, the asked the authorities in charge to accept his offer and promised to willingly comply by all the State and Party's rules and regulations. The difference in the properties dispossessions between the campaigns of defeating the comprador capitalist in the South and those carried out  in the North during the years 1959-60 was that the wealth of the capitalists in the South was extremely bountiful and was ready at hand and amazingly easy to grasp.  Rows and rows of renting houses of the landowning capitalists, assembles of trucks, long lines of steering boats of the compradors in the transportation industry, large factories with hundreds of power looms, agricultural equipment and machines, radios and televisions assembling machines, manufacturing works for soap, cigarettes, light bulbs, filters, canned condensed milk, fish sauce, and so on, were right there to be offered to the Party and Government  (Bui Tin, Mat That, 1993: 83-84).