The Centrally Planned Subsidized Economy
Of Vietnam Before 1986
Nguyen Ky Vien – MA3N0214
CONTENTS
VIETNAM SITUATION AFTER WAR
THE CENTRALLY PLANNED SUBSIDIZED ECONOMY
THE FINANCIAL MARKET OF VIETNAM BEFORE 1986
THE INNOVATION CAMPAIGN 1986
VIETNAM SITUATION AFTER WAR
• 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
THE CENTRALLY PLANNED SUBSIDIZED ECONOMY
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 FINANCIAL MARKET OF VIETNAM BEFORE 1986
• 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 INNOVATION CAMPAIGN 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
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