Few Production Goals Met in 1986 : Economic Woes Plague Communist Vietnam

Times Staff Writer

"Revolutionaries make lousy managers." It's an old line--a capitalist dig at Communist governments born on the battlefield--but it's ringing true in Vietnam.

In December, during a dramatic congress in Hanoi, the Vietnamese Communist Party removed three aging revolutionary leaders from the Politburo. All three had stood with the late Ho Chi Minh through decades of war but were unable to build a productive postwar economy in the 11 years since victory.

One, Truong Chinh, who stepped down as party leader, blamed errors by the party and the government for the sad state of the Vietnamese economy.

Reports issued since the congress have told the statistical story: Vietnam is losing ground.

--Vo Van Kiet, chairman of the State Planning Commission, disclosed to the National Assembly a week after the party congress that nearly every economic sector failed to meet 1986 goals. Agricultural output, at 18.5 million tons of food, was 1.5 million tons below target. Coal production met the target, he said, but electricity fell short. In 1987, Kiet said, power generation, mainly coal-fired, would meet only 90% of the country's minimum needs.

Kiet said the government's budget deficit "largely exceeded forecasts" but he gave no figures.

--An internal report of the U.N. Food and Agriculture Organization, leaked to the Bangkok press in mid-January, declared that Vietnam's "present agricultural system has simply exhausted its possibilities and cannot produce large-scale increases in yields for the future."

The report estimated 1986 growth in farm production to be less than 2%--the target had been 5%--while the population growth rate was 2.1%. Such figures bespeak a losing situation socially, economically and, potentially, politically.

Addressing the party congress that resulted in the Politburo overhaul, Kiet, known as a leading proponent of agricultural reforms, told his party colleagues:

"Over the past several years, our agriculture has undergone some new changes and obtained some important successes, especially in food grain production. . . . Nevertheless, the increase in food grain output remains unstable and unsteady."

Kiet is identified with reforms carried out at the provincial level in the late 1970s to introduce incentives in agricultural production. The result has been a so-called contract system under which a farm family, helping meet its cooperative's state quota, shares in any excess and is permitted to farm a small plot on its own, selling the product either to the state or on the free market.

Through 1984, the government target of a 5% annual increase in food production was met, but output has fallen short for the past two years. Disastrous typhoons have been a major factor but were not entirely to blame. For instance, the country's continuing shortage of consumer and small industrial goods has upset the incentive approach on the farms, according to portions of the leaked FAO report published here, which a U.N. official said were accurate.

"Apparently, the farmers' cooperatives have no longer any incentive to work for a higher production," the report concluded. "With their present income, they cannot buy the essential goods necessary for their daily needs, as they are not available."

The FAO report and Kiet both mentioned a shortage of fertilizer and pesticides, which Kiet blamed partly on bureaucratic inefficiency.

In his address to the party congress, he said the government would seek to produce an average yearly output of 20 million to 20.5 million tons of food grain during the next five years, reaching a level of 22 million to 23 million tons by 1990. But a week later, at the National Assembly meeting, he admitted that the 1986 harvest was just 18.5 million tons.

Food production was just part of the gloomy picture he outlined to the assembly.

--Gross national product grew by 4.6% in 1986, more than the 3.5% increase in 1985, but far short of the 7% to 8% increases recorded from 1982 to 1984.

--The industrial sector expanded by just 5.6%, versus 9% in 1985 and the annual average 12% to 15% growth since 1980. Growth in small industry was only 4.9%, which Kiet blamed on "shortcomings in the state policy on purchase prices and supplies of raw materials."

Perhaps worse, Kiet noted, "the quality of products continues to deteriorate." Items for sale in state stores often are made of fragile lightweight plastic. A shampoo brought out in 1985 was the color of dirty dishwater.

Furthermore, Kiet said, "the activities of private traders and speculators could not be reduced" in 1986. The best-quality goods--clothing, foods and electronic goods brought in from other countries--appear in the black markets of Hanoi and Ho Chi Minh City, as Saigon is now known.

The planning commission chairman said the government's share of retail trade fell by 15% during 1986 and that the state controlled only 16% of the foreign exchange entering the country.

In his talks at the party congress and before the assembly, Kiet did not discuss the potentially dangerous social consequences of the limping economy.

Foreign analysts here and in Hanoi have estimated that the inflation rate ran to at least 700% last year. The FAO report called it a major problem for most Vietnamese, who live on fixed government salaries. While prices are frozen in state stores, necessities are not always available and government salaries are also fixed. As a result, state workers often both work and buy on the nominally illegal black market, generating inflation.

In November, the government devalued the currency for the second time in two years. The official value of the dong, the Vietnamese monetary unit, was reduced from 15 to $1 to 80 to $1. Speculators on the black market were recently giving more than four times the official rate, according to visitors to Hanoi.

But the greatest long-term pressure on the economy remains the high population growth. Kiet put the 1986 growth at 2.2%, down from 2.3% in 1985. He posted a target of less than 2% for 1987, and 1.7% by 1990, an unrealistically optimistic goal, according to population experts here in Bangkok. Population control has been given low priority in postwar Vietnam.

The new party leadership, led by General Secretary Nguyen Van Linh, is expected to make the economy its first order of business. But the 60 million Vietnamese seem far more resistant to Communist economic mobilization than to wartime sacrifices.

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