The Internal Problems of Vietnam as Cause of the War - Essay Example

The Internal Problems of Vietnam as Cause of the War The internal problems of Vietnam as cause and consequence of the war’s course and outcome have affected the economic development of Vietnam. Just how much of a detrimental affect the Vietnam War had on the country’s development will be discussed below. That economic development was also affected by political and military factors such as the war of independence from France, the country being split into two and the subsequent war between communist North Vietnam and capitalist South Vietnam. North Vietnam’s victory reunified the whole country under communist control and meant the removal of capitalism from the south of the country. The communists tried to limit international trade to only be with other communist states such as the members of COMECON and especially the Soviet Union. The collapse of the Soviet Union and China’s adoption of capitalist economic policies influenced Vietnam to broaden its international trade links and liberalise its internal economy (Evans & Newnham, 1998, p, 561). Vietnam is a country whose economy had always been largely agrarian in nature, although the communists had hoped to industrialise the economy. The internal problems of Vietnam as cause and consequence of the war's course and outcome was demonstrated by the damage that the conflict did to the country’s agricultural sector. By the time that North Vietnam had reunified the country its economy had been devastated by more than three decades of virtually continuous fighting. The task of rebuilding the economy was only achieved through the economic assistance of the Soviet Union. The internal problems of Vietnam as cause and consequence of the war's course and outcome were not helped by the fact that the economic policies of the Soviet Union, which the Vietnamese copied were flawed in their own right (Woodruff, 2005 p. 275). The Soviets wished to prop up a communist state that had already humiliated the United States, and that preferred friendship to the Soviet Union rather than a good relationship with China (Hobsbawm, 1994 p. 489). The Vietnamese economic recovery was interrupted by the short - lived Chinese invasion of 1979, which had the affect of increasing the number of refugees that fled the country. The conflict also reversed some of the economic recovery that had begun since the end of the Vietnam War in 1975 (Lenman, 2004 p. 869). Ironically it was the economic policies of China that provided the Vietnamese government with the inspiration to liberalise their economy and attempt to increase international trade with the rest of the world. Like China, Vietnam started economic liberalisation as a means to promote economic development and growth without instigating political changes that would threaten the communist control of the government. The reliance of Vietnam’s economic development upon international trade and investment was amply demonstrated when its largest trading partner the Soviet Union went into economic meltdown before finally collapsing. The demise of the Soviet Union meant that Vietnam had to increase international trade with the United States, China and other Asian states to prevent its economy from collapsing as well (Evans & Newnham, 1998, p.563). Vietnam joined the Association of South East Asian Nations (ASEAN) in 1995 to increase its trading links and stimulate the growth of exports (Evans & Newnham, 1998, p.35). In 2006 Vietnam became the latest member of the World Trade Organization (WTO) yet had to agree stringent cuts to its import quotas to gain that membership. For the Vietnamese government such concessions are regarded as being worthwhile as growth in international trade has strengthened economic development (Beattie, Kazmin, & Williams, 7 November 2006). Economic reforms had already started during the 1980s when the government began to realise that a centrally planned economy was not achieving economic development as quickly or as widespread as it wanted. The Vietnamese economy had recovered from the Vietnam War yet the failures of Communism meant its state - planned economy was a failure. International trade was the main way in which Vietnam was to pay for economic development and obtain the funds to implement the government’s industrialisation programmes (Whitaker’s 2007,p.1049). Of course the country’s drive to fund industrialisation through the export of its primary products became more urgent after the Soviet Union ceased its economic aid from 1989 (Evans & Newnham, 1998, p.563). Although the agrarian sector still employs over half of the workforce, the industrial sector has now become the most important part of the economy, representing 41% of Vietnamese gross domestic product. It is the industrial sector that has driven economic development forward and been reliant on international trade to promote its growth and economic development. Vietnam’s main export earnings are derived from fishing, coal mining, textiles and potentially the most profitable of all the export of all, crude oil. Exports are an important source of income to fund economic development and obtaining foreign currency to buy raw materials and industrial equipment. For example Vietnamese exports to the United Kingdom during 2005-totalled £714, 490,000 that are a sign of the earning power of exported goods (Whitaker’s 2007 p. 1049). Vietnam has also recently renewed a contract with the Russians to boost oil production and exports. That is a reminder of the relationship of when the Soviet Union had a strong influence upon the Vietnamese economy. Of course both Vietnam and Russia have embraced capitalist economic policies (Shchedrov, Monday 20 November 2006). Vietnam also needs imports to maintain economic development. Petroleum and related products, industrial machinery for new industries and raw cotton for textile production are amongst the most vital for economic growth. International trade has made a considerable contribution to Vietnam’s high economic growth rates, for instance estimated growth of gross domestic product for 2005 was an impressive 7.6% (Whitaker’s 2007, p.1049). Promoting international trade also allowed Vietnam to improve its balance of payments position. In capitalist economies the balance of payments is seen as an important indication of a country’s wealth and level of economic development. Import quotas and currency exchange rates can affect the balance of payment. Vietnam has reduced its import quotas embarking upon economic liberalisation whilst boosting its exports to a growing number of trading partners (Baxter, Bannock & Davis, 2003, pp. 16-18). Vietnam has benefited from improved international trade with Japan, the United States and China, which has started to increase national prosperity and led to a healthy balance of payments surplus that stood at $1,054 million in 2002. International trade can also help the economic development of Vietnam as it can help attract foreign investment and reduce the national debt (Whitaker’s, 2007, p.1049). Vietnam sees the benefits and the need for international trade for its economic development. In economic terms it is a communist state just in name. It intends to continue high rates of economic growth through increased levels of trade. Vietnam has not only joined ASEAN it has become a member of the Asia-Pacific Economic Co-operation (APEC) as well (Bannock, Baxter & Davis, 2003, p.9). Thus the Vietnam War certainly caused a great deal of damage to the Vietnamese economy, though arguably its planned communist economy was even more detrimental. International trade plays an important perhaps even a vital role in the economic development of Vietnam, and reversing the damage caused by the Vietnam War and Communism. The Vietnamese government started to liberalise economic policy once it realised that a centrally planned economy would not produce sustainable economic development over a long-term basis. Moves to increase international trade gained greater urgency after the collapse of the Soviet Union. Bibliography Bannock G, Baxter R E, & Davis E, (2003) The Penguin Dictionary of Economics, Penguin, London Beattie A, Kazmin A, & Williams F, Vietnam leaps hurdles to join trade body – Financial Times, 7 November 2006 Evans G & Newnham J, (1998) The Penguin Dictionary of International Relations, Penguin, London from www.ft_com Hobsbawm, E (1994) Age of Extremes, the Short Twentieth Century 1914-1991, Michael Joseph, London Lenman B P (2004) Chambers Dictionary of World History 2nd edition, Chambers, Edinburgh Shchedrov O, Putin promotes Russian trade in Vietnam – The Scotsman, Monday 20 November 2006 from www.Scotsman.com Whitaker’s, (2007) Whitaker’s Almanack 2007 – today’s world in one volume, A & C Black, London Read More