HARD TIMES

HARD TIMES

By Van Nguyen

 Having been vested the plenipotentiary powers in preserving the supremacy of the Communist Party, the Party’s leadership committed to commit serious errors and mistakes in recurrent phases of economic reforms. Failures were self-evident in the reversal of the reforms during 1983. The ill-conceived reforms programs lasted over eight years and gradually deepened in chaos. The regime then proceeded with greater caution for the next move. It delayed the collectivization of agricultural production; taking on a wait-and-see attitude and adopted a more relaxed foreign investment law. Beginning in the first months of 1983, Truong Chinh made frequent study visit tours at State agricultural farms and manufacturing enterprises in various provinces to complement his knowledge about the actual workings of the existing economic system. He came to realize that the economic realities in the South were radically different from the ideas and ideals he had conceived, ideologically and economically.

 Difficulties and Problems

In reality, right in the beginning, the economic reforms programs ran into serious difficulties and problems. Manual and technical labor resources were in want. Work conditions were harsh, especially for urban dwellers with no previous farming experience. Inferior production persisted, in spite of substantial State support, Worse still, living conditions were lamentable, and productivity was disappointing. Large numbers of farm-workers began to drift back to the cities--a move that entailed a considerable degree of economic insecurity. The economic programs were riddled with complications not only with increasingly serious difficulties in labor recruitment, but also in the management of the farm production programs itself. Difficulties and problems should then be solved at the roots:

In March 1983, the Vietnamese Communist Party convened its Fifth Party Congress to assess its achievements since 1976 and outline its major tasks for the second five-year economic plan 1980-1985. The congress was revealing with caution that it would fail if revolutionary optimism was no substitute for common sense. Thousands of large groups of youths, both male and female, were sent to collective farms laboring on irrigation works without wage. Thousands of collective manufacturing cooperatives where the workers worked in lamentable conditions and were underpaid by lowest wages or poor quantities of food rations were established in replacement of the old system of private factories to push forward the so-called socialist economy. Despite rigid socio-political controls and mass mobilization of labor force as such, the party still fell far short of its original expectations for socialist transition (Cima, 1989: 111)

     Although acknowledging difficulties and problems, the Congress still affirmed that the "Party's policies are absolutely correct; only the measures are at fault." The instantaneous economic difficulties, and problems, in the views of the Congress, were only the inevitable consequences of the thirty years of war and the destructive plots of the imperialists and their henchmen. In that regard, the Party “devises a number of undoing measures just like the ones committed in the Soviet NEP (New Economic Programs) under Lenin.” The Party changed attitude, calling on the capitalists to join in the joint business ventures to develop State capitalism. The zeal failed to take shape, nonetheless. The economy slid down, and it fell quickly in crisis.

     Controversy over the State policy between to top leaders cropped up during the VI Party Central Congress of July 3-10, 1984. Party Secretary-general Le Duan showed himself a consistent fighter for economic centralism. Main tasks were focused on developing heavy industry and pushing forward agriculture towards mass production. Plans should be made to create a central force for the economic management system. The primary objective was to foment an impetus force for goods production anal distribution, unifying State management and regulating merchandise, securities, and commodities. Most importantly, efforts should concentrate on fighting back the tendency to use the principles of market economy as criteria to evaluate the economic achievements of the State. Truong Chinh suggested, on his part, that the Party should look at the realities of the actual economic life of the country. State subsidies had for many years created a somber picture.  Bureaucracy and corruption spread alarmingly. Whether the Party liked it or not, it ought to acknowledge the existent realities of the market economy in which the whole society was living. A system of exceedingly low prices generated by subsidies only creates great damage to the interests of the nation and the worker.    

During the Party Central Congress VII of December19-17, 1984, Truong Chinh called for ban on the system of bureaucracy and State subsidies and prepared for a systemic instituted re-evaluation of “price-salary-money” to regularize the economy. Low salary, for instance, was compensated by reduction in the prices of provisions and commodities. Liberalism that ravaged the economic daily life of the nation and the worker was to be eliminated. Truong Chinh advocated a realistic approach: “It is necessary to confront the realities of the economic life and rectify errors and mistakes. Most catastrophic problems are the failed economic policies and practices, and especially, bureaucracy, the State subsidies system, and the economic liberalism that ravaged the daily life of the nation and the worker.

At the Party Central Congress of December 10-17, 1984, Truong Chinh advocated resolute ban on bureaucracy and the State subsidies.  As a result, in September 1985, Hanoi took a general census of private economic enterprises and changed currency, dispossessing the capital that was still in the hands of entrepreneurs and businessmen. The People's Council of Ho Chi Minh City selected Third Precinct as a pilot case for the census since there was a large number of small private manufacturing establishments and trade and business enterprises operating in it. However, the general census solved no problem that brought the economy to a standstill. To save the situation, Hanoi had to stop short its plans for socialist transformation and had to work headlong for a policy for economic renovation. This economic renovation, according to Hanoi's interpretation, was only a bypassing period. Its ultimate goal was to transform Vietnam into a Communist country. The general census of private property was postponed.

At the Dead End

 The projects that the Party leadership laid out for the Vietnamese economy met with insurmountable obstacles that tackled issues without solutions. These Maoist-style projects were grandiose but impractical and baseless. How could these projects be administered without financial resources and professional personnel?  Moreover, the cost for the projects would only add weight on the ever increasing inflation the country was facing. There should be a serious study at the highest level of the administration.  Experts close to Trumg Chinh, in particular, stressed the shortcomings of the policy and pointed out the urgent need of a breakthrough that could gradually ease economic production and stabilize the economic management.

    From April 1983 to November 1985, Truong Chinh made study tours around the country to test his “thoughts on reforms.” The counter-balance “price-salary-money” measure was considered the breakthrough for the stagnant national economy and poor management.  On September 3 1985, he signed into law the order providing the issuance and regulations for exchange of a new currency. A household was allowed to exchange the old currency at the maximum for 2,000 dong in the new currency; a single person or individual of a collective, 1,5000 dong each,  business household with  a license at high level, 5,000 dong each. Cash collected from peculation or by illegal business practices were confiscated and incorporated into national budget. The results were discouraging, nevertheless. A few days later, in a report to Truong Chinh, Vo Van Kirt acknowledged that the amount of money rested with the people was relatively minimal. Households with low income were large, giving us a somber picture of how hard the population was facing with the difficulties of economic life. Again, shortcomings persisted. Peculators had already had time to drain goods and commodities and dispersed their wealth abroad. Tragedy followed suit. Prices soared. Peculation reappeared, and galloping inflation started. 

     The disastrous currency and wage reforms of late 1985 remained the only aberration in this pattern of caution. Although there were rumors of possible sabotage, the cause was likely to be a severe lack of judgment by decision makers. Those questions included (a) the IMF and creditor nation anxious for reduction in inflammatory deficit financing to help control the burgeoning balance of trade deficit and ease the country’s debt problem; (b) the Soviet Union, anxious to create a more efficiency working economy in which the large quantities of Soviet development aid would be more effectively, and, last but not least; (c) those elements within the Party who were anxious about a revival of capitalist tendencies. These pressures were, to some extent, contradictory and the reforms (abolition of subsidies and currency reform) had different goals. But their combined effort was to create severe hardship for urban workers and shake popular confidence in the Party and government. The new Party leadership clearly hopes that a resumption of the more gradual reform process will restore that confidence (Huynh Kim Khanh, 152).    

    Cultivating Renovation

      The situation of the country became increasingly critical, socially, politically, and economically. The leadership of the Party was at the dead end: Renovation or Death. The Party Secretary-general Le Duan was at the loss. Premier hard-liners Pham Van Dong hung on to orthodox Marxism-Leninism. Chairman of the State Truong Chinh devoted himself to cultivating renovation. As before, he advocated renovation, making efforts to establish a theatrical base for thought reform, paving the way for renovation. He was elected to Party Secretary-general in replacement of Le Duan, who passed away on July 10, 1986. Favorable conditions were  on his side. On July 28, 1986, Mikhail Gorbachev, during a vast tour in the far east of USSSR, showed concern about Vietnam, saying he hoped to see the Vietnam-China frontiers to be a border of peace. In his statement at Vladivostok on July 31, 1986, he declared that the USSR Communist Party and the whole Soviet Union and Vietnam “completely understand that it is necessary to find solutions to the problems arising from life right inthe bosom of socialist systems.” 

For two consecutive visits to the Soviet Union, Party Secretary-general Truong Chinh met with Mikhail Gorbachev on August 12, and September 11, 1986. Thereupon, he made plans, preparing the guidelines for renovation. At the Patty Congress in Hanoi on October 19, 1986, he made his point, assuring with firmness that “with regard to other socialist countries, renovation is the solution for advancement forward to meet the demands of the time, to correspond to the just meds of the people and that are becoming increasingly a matter of urgency. Concerning the situation in our country, renovation is a vital demand and a matter of life and death. It equally arises from the demands of the situation in the country and reconciliation corresponding to the tendency of renovation of our time”