From Plan to Market: The Economic Transition in Vietnam.

• Author: Abinales, Patricio

Adam Fforde and Stefan de Vylder (Boulder, Colorado: Westview Press Inc., 1996.), 358 pp.

Its authors describe this book as a "socio-economic history of [the] transition from plan to market and [an attempt] to throw light on how this fundamental shift occurred." Adam Fforde and Stefan Vylder trace the transformation of the Vietnamese economy from a Soviet-like "neo-Stalinist" model first set up in the north, to the underdeveloped "market economy" that encompasses a now unified Vietnam. The authors contend that because of a series of problems Vietnam faced after 1975 (the American economic blockade, the invasion of Cambodia, war with China, a series of bad harvests and finally inflation in the mid-1980s), an economy that was maintained by external aid during the war years unraveled. The distortions associated with the neo-Stalinist model--poor quality, inefficient production, dependence on state subsidies--also began to erode the economy. Ten years after the liberation of Saigon, Vietnamese authorities were compelled to introduce "market reforms," which after another decade had become the new economic foundation of the country.

After an introductory synthesis of the main argument, the next four chapters deal with how the so-called DRV model (the Vietnamese adaptation of the Stalinist economic model) was steadily eroded by "autonomous market transactions." The tension between plan and market eventually led to a crisis in mid-1985, paving the way for market reforms to be introduced in the Vietnamese Communist Party's Sixth Congress. The next three chapters focus on the nature of what the authors call the "transition model." They highlight the characteristics of the emerging market system in agriculture and industry, the social aspects of this "new development model," and the manner in which accumulation, savings and further market development evolved. The second to the last chapter examines the role of the state as the transition economy accelerated Vietnamese economic development. In the final chapter, the authors conclude that the Vietnamese transition was a success, but raise some issues that show "clouds on the horizon."

The authors point out that as the DRV model was breaking down, "autonomous market transactions" emerged from within the state sector itself. State enterprises, trying to cope with the distortions of central planning, took advantage of certain policy loopholes to engage in their own purchasing. Many eventually entered into informal barter agreements with other firms for materials that normally would not be made available to them under the central plan. Changes in the state enterprise sector were paralleled by modifications in agriculture. The DRV model introduced cooperatives and state farms as the focal points of socialist agriculture. By the 1980s, however, these farms were being supplanted by family-based...