Doi Moi

How does a socialist society begin to establish a market-system? Friday morning we discussed that question as we attended a lecture at the University of Hanoi’s School of Science and Technology that was presented by Do Treiu Anh (Josie), a young Hanoi banking executive.

Apparently the Vietnamese, as of now, have no intention of moving to an economy that is completely market-based. The goal is a socialist-oriented market economy, or what the Vietnamese call Doi-Moi. Vietnam’s journey from a pure socialist system began in 1986, and given the complexity of this type of change it should not be surprising that the journey has seen both success and failure.

We will begin with a success. Since Vietnam’s economy was – to an extreme degree – based on agriculture in 1986, the institutions of private property, prices, markets and profits were first established in the food sector. The change to free enterprise in food has had a quick and dramatic impact: within three years Vietnam moved from a society susceptible to famine to the world’s third largest rice exporter. At ground-level, as we explore the Hanoi streets, we clearly see food in both abundance and in amazing variety (I’ve already tried crocodile and ostrich thus far.).

There is quite a bit of competition among the food sellers. At one end of the food-seller continuum you see vendors carrying, up and down the street, their home-made products in baskets, small family shops specializing in one type of food (chicken, fish, fruit, etc.) and tiny restaurants whose customers haggle over price, and sit on tiny stools out on the sidewalk. At the other end of the food-seller continuum you see the type of enterprises we recognize from our US experience. We see family-run convenience stores, a few full-service grocery stores that post fixed prices, and first-class restaurants that could easily survive in acutely competitive environments like New York City.

On the other hand, we learned that large government-run enterprises still control many economic sectors in Vietnam. Though we see private property, prices, and profit in these sectors, competition is not yet allowed. As a result, these important sectors remain wasteful and thereby limit Vietnam’s economic growth.

Josie told us that Doi-Moi  is changing the attitude and hopes of many young Vietnamese. They are quickly learning free enterprise, and they are becoming much less tolerant of corruption. From what we hear and see, Vietnam is on a positive path.

Group with banking executive Do Thien Anh, after a lecture and discussion on Doi Moi.

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