Vietnam to Try Western-Style Reform of Its Ailing Economy

Vietnam has announced plans for major reforms involving Western-style profit motives and private business in an effort to pull the state-run economy out of its stubborn nose dive.

The latest push to liberalize the country’s stagnant economy came during an April 1-9 meeting of the ruling Communist Party’s Central Committee in Hanoi. A long communique on the meeting was read Thursday night over Radio Hanoi, and the text became available here Friday.

The committee admitted that earlier attempts at economic reform had failed, and it spelled out a series of new initiatives.

The supply of scarce goods to the impoverished country’s markets “has worsened with each passing day since late 1985,” according to the radio broadcast monitored in Bangkok. The Central Committee decided to launch sweeping price reforms, ensure healthy profits for peasants and help individuals “feel at ease when investing capital.”

Shortages of Food, Goods

The reforms, announced a day after Ho Chi Minh City gave more freedom to its factory managers, were the first step the new party leadership has taken to unravel bureaucratic knots tying down the country’s economy.

Twelve years after the defeat of the U.S.-backed Saigon government and reunification of the country, Vietnam still suffers food and consumer goods shortages, inflation up to 700%, widespread corruption and failure to meet production targets.

Vietnamese vote Sunday for a National Assembly that should usher out old guard figures such as President Truong Chinh who have dominated the party since its founding in 1930.

Nguyen Van Linh, a reformist named to succeed Chinh as party leader last December, delivered the opening and closing speeches at the meeting. The December change in leaders came after a wave of public criticism forced the Politburo to admit that its postwar policies had failed.

Thursday’s communique, reflecting the reformist policies Linh has been advocating, said the changes must be linked to a purge of corrupt party officials announced earlier this year. They must also help reduce the country’s growing budget deficit, estimated at around $150 million at the official rate.

Economic Management Shift

The communique repeatedly stressed what Hanoi calls “socialist business”--rational management free of the heavy bureaucracy that slows down orthodox communist economies.

In agriculture, taxes and state purchasing prices will be reviewed so peasants, now often discouraged by low prices, can earn up to 40% profit for their rice and other goods, it said.

Real prices will be used for economic decisions rather than the current distorted indicators that often leave managers unsure whether they are producing at a profit or a loss.

The private sector will be free from “all narrow-minded prejudices and irrational stipulations characteristic of discriminatory treatment,” the communique said.

Legalizing the moonlighting rampant in Hanoi and other cities, it stated, “Workers and civil servants are allowed to work privately during their off-duty hours.”