In mid 1980s, an important political and economic event took place in Vietnam. The eight conference of the 5^th Party Central Committee in June 1985 identified the goal of socialist-oriented market economy for Vietnam. At the time, Vietnam had marked 10 years of Southern Liberation and National Reunification, but faced numerous difficulties. Chronic famine and the heavy consequences of the past two wars against French and American imperialists had created problems for the war-torn country. Several years later, the socialist regime in the former Soviet Union and other East European countries collapsed. Vietnam had to select between two options: renewal or death. 

In fact, the Renewal process formerly began in the agricultural sector with the “allocation” mechanism under the Party Resolution 10 (formerly known as Khoan 10), and the Party leadership at all levels, from production units to district and provincial Party Committees, became the vanguard in the campaign. But the country actually ushered in the Renewal process after the 6^th National Party Congress in December 1986.

Ten years later, Vietnam fulfilled or even surpassed all socio-economic development targets set for the 1991-1995 period. The country really escaped the economic crisis. In the past 10 years, Vietnam’s economy has developed steadily with an annual GDP growth rate of 7.5 percent. Notably, the country’s GDP growth rate in 2005 reached 8.4 percent, with a GDP per capita of US$640, an increase of 2.2 times against 1995.

To develop the national economy, Vietnam has played to the full strength of its internal sources, while making full use of external sources. Since 1988, the country has attracted more than US$50 billion worth of foreign investment capital for economic development. Total foreign investment capital in Vietnam has increased year on year, fetching US$5.2 billion in 2005. Every year, Vietnam allocates between 35-37 percent of its total GDP for development investment – a rather high figure compared to other regional countries.

Over the past 20 years, Vietnam’s economic structure has shifted positively toward national industrialisation and modernisation, focusing on developing the export-driven economy and combining the production and market development and imports and exports. Proper adjustments to the proportion of key sectors in the national economy have paid off. The proportion of the agricultural sector in GDP fell to 21 percent in 2005 from 46.3 percent in 1988. Meanwhile, the proportion of industrial and construction sectors increased from 21.6 percent to 41 percent, and of the service sector from 33 percent to 38 percent.      

Twenty years after implementing the Renewal process, Vietnam has a new face. The national economy has a steady position in global economic standings. From a country which imported between 500,000 to 1,000,000 tonnes of food a year, Vietnam is now the second largest rice exporter in the world with between four to five million tonnes shipped abroad a year. It also ranks first in the world in exporting pepper, second in coffee and cashew nuts, and fourth in rubber. Vietnam really has become a powerful exporter of farm produce in the world.

Currently, Vietnam is among the top 50 countries in the world in terms of import-export value. In 2005, the country’s total import-export value grossed nearly US$69 billion, an increase of 11.2 times against 1990. Exports alone rose by 13.5 times. The monthly export value also increased from US$1.2 billion in 2000 to US$2.7 billion in 2005. Notably, the export value surpassed the US$3 billion mark in October and December 2005, and January and March in 2006. In addition, for the first time in the past 15 years, Vietnam secured an export surplus in the first quarter of 2006.

In addition to economic development, Vietnam has gradually built and upgraded its infrastructure facilities, including the power and urban transport systems, and economic and industrial parks.

Visiting Vietnam today, foreign tourists can recognise a politically stable country, in which local people are friendly, open-hearted and optimistic with improved living conditions, and the commodity market is bustling and less affected by global price hikes.

2006 marked the first year of the five-year plan (2006-2010) with socio-economic targets much higher than in the previous five years. A new stage of development has opened for Vietnam. The recent 10^th National Party Congress once again affirmed the Party’s vanguard role in leading the Vietnamese people in all revolutionary periods.