Vietnam

VIETNAM

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS VIETNAMESE
DEPENDENCIES
BIBLIOGRAPHY

Socialist Republic of Vietnam

Cong Hoa Chu Nghia Viet Nam

CAPITAL: Hanoi

FLAG: The flag is red with a five-pointed gold star in the center.

ANTHEM: Tien Quan Ça (Forward, Soldiers!).

MONETARY UNIT: The dong (d) is a paper currency of 10 hao and 100 xu. There are coins of 1, 2, and 5 xu, and notes of 5 xu, 1, 2, and 5 hao, and 1, 2, 5, and 10 dong. d1 = $0.00006 (or $1 = d15,855) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard, but some traditional measures are still used.

HOLIDAYS: Liberation of Saigon, 30 April; May Day, 1 May; Independence Day, 2 September. Movable holidays include the Vietnamese New Year (Tet).

TIME: 7 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Situated on the eastern coast of mainland Southeast Asia, the Socialist Republic of Vietnam (SRV) has an area of 329,560 sq km (127,244 sq mi), extending 1,650 km (1,025 mi) ns and 600 km (373 mi) ew. Comparatively, the area occupied by Vietnam is slightly larger than the state of New Mexico. At its narrowest, Vietnam is only 50 km (31 mi) across. The nation is bordered on the n by China, on the e by the Gulf of Tonkin, on the e and s by the South China Sea, on the sw by the Gulf of Thailand, and on the w by Cambodia and Laos, with a total land boundary of 4,639 km (2,883 mi) and a coastline of 3,444 km (2,140 mi). Before unification, which was proclaimed on 3 July 1976, Vietnam was divided in two by the 17th parallel. To the south was the Republic of Vietnam (RVN), also known as South Vietnam; to the north, the Democratic Republic of Vietnam (DRV), also known as North Vietnam.

Vietnam, China, the Philippines, Brunei, Taiwan, and Malaysia claim all or part of the Spratly Islands and Paracel Islands, located in the South China Sea roughly 600 km (350 mi) east of Ho Chi Minh City and 400 km (250 mi) east of Da Nang, respectively. The Paracel Islands are known in Vietnamese as the Hoang Sa archipelago, and the Spratlys as the Truong Sa. Both archipelagoes are reportedly surrounded by rich undersea oil reserves, and are productive fishing grounds. China has occupied the Paracel Islands since 1974, when Chinese troops drove a South Vietnamese garrison from the western islands. Vietnam occupies six of the Spratlys, and has unsuccessfully engaged in negotiations with Malaysia and the Philippines over the remainder. Periodic clashes between Chinese and Vietnamese naval forces have taken place in the vicinity of both island groups.

Vietnam's capital city, Hanoi, is located in the northern part of the country.

TOPOGRAPHY

Vietnam has been described as a carrying pole with a rice basket hanging from each end. The description is a fitting one, for a single mountain chain, the Annam Cordillera (in Vietnamese, Truong Son), extends along Vietnam's western border from north to south, connecting two "rice baskets," which are formed by the densely populated Red River Delta of the Tonkin region in the north and the rich Mekong River Delta in the south. Over two-thirds of the entire population of the country lives in the two lowlying delta regions, both of which are composed of rich alluvial soils brought down from the mountainous regions of southern China and mainland Southeast Asia. The remainder of the population lives along the narrow central coast, in the hilly regions of the Central Highlands north of Ho Chi Minh City (formerly Saigon), or in the mountains north and west of the Red River Delta. The highest mountain peak is Fan Si Pan (3,143 m/10,312 ft), near the northern border.

CLIMATE

Vietnam is entirely located in the tropical belt lying between the equator and the Tropic of Cancer. While there are slight variations in temperature, depending on the season and the altitude, the primary seasonal changes are marked by variations in rainfall.

In the north, the rainy season extends from mid-April to mid-October; the city of Hanoi has a mean annual rainfall of 172 cm (68 in), and in the mountains, annual rainfall sometimes exceeds 406 cm (160 in). Daily temperatures fluctuate considerably in the Red River Delta region, particularly in the dry season, when the thermometer may drop as low as 5°c (41°f) in the region of Hanoi. During the rainy season, the average temperature in Hanoi is about 30°c (86 f).

The south is more tropical; temperatures in Ho Chi Minh City vary only from 1833°c (6491°f) throughout the year. Temperatures in the Central Highlands are somewhat cooler, ranging from a mean of about 17°c (63°f) in winter to 20°c (68°f) in summer. The rainy season extends from early May to November, with annual rainfall averaging about 200 cm (79 in) in lowland regions. The typhoon season lasts from July through November, with the most severe storms occurring along the central coast. Typhoons in this region frequently lead to serious crop damage and loss of life.

FLORA AND FAUNA

The mountainous regions of Tonkin, as well as the Annam Cordillera, are characterized by tropical rain forest broken by large areas of monsoon forest. In the higher altitudes of the far northwest there are pine forests. Shifting cultivation has resulted in many sections of secondary forest. Tropical grasses are widespread, and there are mangrove forests fringing parts of the Red River Delta and in the Ca Mau peninsula, which juts into the Gulf of Thailand. Tropical evergreen forests predominate in the south, with extensive savanna in the southwest.

Deer and wild oxen are found in the more mountainous areas. Two of the seven new species of mammals identified worldwide in the 20th century can be found in a nature reserve in the northwest corner of Vietnam. They are the giant muntjac (a barking deer) and the Vu Quang ox. As of 2002, there were at least 213 species of mammals, 262 species of birds, and over 10,500 species of plants throughout the country.

ENVIRONMENT

During the Vietnam war, massive bombing raids and defoliation campaigns caused severe destruction of the natural foliage, especially in the Central Highlands in the south. In addition, dioxin, a toxic residue of the herbicide known as Agent Orange, had leached into water supplies. Over 50% of the nation's forests have been eliminated. However, reforestation projects have begun in some areas of the country.

The nation has 367 cu km of renewable water resources with 87% of annual withdrawals used for farming activity and 10% used for industrial purposes. As of 2002, only 67% of the rural population had access to improved water sources.

Salinization and alkalinization are a threat to the quality of the soil, as are excessive use of pesticides and fertilizers. Environmental damage has also been caused by the slash-and-burn agriculture practiced by nomadic tribal peoples in the Central Highlands and in the mountainous regions in the north. The government is engaged in a program to introduce modern farming practices to these populations.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 41 types of mammals, 41 species of birds, 24 types of reptiles, 15 species of amphibians, 23 species of fish, and 145 species of plants. Endangered species include the tiger, elephant, Sumatran rhinoceros, Thailand brow-antlered deer, kouprey, river terrapin, Siamese crocodile (probably extinct), estuarine crocodile, Javan rhinoceros, and the pileated, crowned, and caped gibbons. The Vietnam warty pig has become extinct.

POPULATION

The population of Vietnam in 2005 was estimated by the United Nations (UN) at 83,305,000, which placed it at number 13 in population among the 193 nations of the world. In 2005, approximately 7% of the population was over 65 years of age, with another 29% of the population under 15 years of age. There were 100 males for every 100 females in the country. According to the UN, the annual population rate of change for 200510 was expected to be 1.3%. The government viewed this rate as too high, despite the significant success of family planning programs in reducing the fertility rate from 3.7 births per woman in 1990 to 2.9 in 2005. The projected population for the year 2025 was 103,187,000. The population density was 251 per sq km (650 per sq mi).

The UN estimated that 26% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 3.21%. The capital city, Hanoi, had a population of 3,977,000 in that year.

MIGRATION

The 1954 partition of Vietnam resulted in the exodus of over 820,000 refugees, the majority of them Catholics, from the northern part of the country. Most eventually settled with government assistance in the Central Highlands or on the outskirts of the capital city of Saigon (now Ho Chi Minh City). During the same period, about 80,000 Viet-Minh troops and their dependents moved from the south to the north.

The Vietnam war caused severe disruption of living patterns in both the north and the south. In the north, intensive US bombing of major industrial cities led to a dispersal of the population from urban areas, while a government-sponsored program resulted in the resettlement of nearly one million Vietnamese from crowded areas in the Delta to less densely populated regions in upland areas of the country. In the south, migration was primarily from the countryside to the cities, as millions of peasants fled their villages to escape the effects of the war or to seek employment in the affl uent cities of Saigon and Da Nang. At the end of the war in 1975, nearly one-half of the population lived in urban areas, many in refugee camps on the edges of the major cities.

After seizing control of the south in 1975, the Hanoi regime announced a new program that called for the resettlement of over 10 million Vietnamese into less crowded areas of the country by the end of the century. Many were to be moved from refugee camps in the south to new economic zones established in the Central Highlands or along the Cambodian border. Although the zones were unpopular because of poor living conditions, between the end of the war and 1981, nearly 1.5 million Vietnamese were resettled into new areas. The overall aim was to disperse the entire population into several hundred "agro-industrial districts" that would provide the basis for development of an advanced Socialist economy. Since 1981 another 2.1 million have been resettled.

In addition to this migration within the country, since the war there has been a substantial outflow of Vietnamese fleeing to other countries. About 150,000 were evacuated from the south in the final weeks of the war, many of them eventually settling in the United States. There were 593,213 people of Vietnamese ancestry in the United States in 1990. In 1978, a new exodus began after the government nationalized all private trade and manufacturing in the country. During 197887, an estimated one million Vietnamese fled by sea to other countries in Southeast Asia, or overland to China. Many later resettled in Australia, France, the United States, and other countries. From 197984, 59,730 persons emigrated legally through the US Orderly Departure Program; this program was suspended by the Vietnamese government in 1986 but later resumed, with 57,000 emigrating to the United States in 1993 alone. In 1984, the United States started a program that offered asylum to Vietnamese political prisoners and all Asian-American children. This program was restarted in September 1987. Between 1975 and 1984, about 554,000 persons, known as the "boat people," emigrated illegally. In 1992, Vietnam signed agreements with the United Kingdom providing for the forcible repatriation of almost all the 55,700 "boat people" remaining in Hong Kong. The major refugee community was in China, which was harboring 285,500 Vietnamese of Chinese ancestry at the end of 1992.

As of 1997, 3,000 Vietnamese remained in Hong Kong. By 1999, some 110,000 nonrefugee boat people had returned to Vietnam. In 2004, there were 2,630 refugees in Vietnam and 13 returned refugees. In that same year there were 299,280 Vietnam refugees in China, 21,776 in Germany, 12,382 in the United States and 9,132 in France. Additionally, in that same year over 4,500 Vietnamese sought asylum in 8 countries. In 2005, the net migration rate was estimated as -0.43 migrants per 1,000 population. The government views the emigration level as too low, but the immigration level as satisfactory.

ETHNIC GROUPS

About 8590% of the population of the SRV is composed of ethnic Vietnamese. The racial origins of the Vietnamese are obscure, although many scholars believe they represent a mixture of Australoid peoples who lived in mainland Southeast Asia during the Stone Age with Mongoloid peoples who migrated into the area from southern China.

In addition to the ethnic Vietnamese, there are 53 other ethnic groups living in the SRV. Many, like the Tay, the Thai, the Nung, the Rhadé, and the Jarai, are nomadic tribal peoples living in the mountainous areas of the Central Highlands and along the Sino-Vietnamese border. The overseas Chinese (Hoa) are descendants of peoples who migrated into the area in recent centuries. The Cham and the Khmer are remnants of past civilizations that controlled the southern parts of the country.

The largest ethnic minority in the country is the ethnic Chinese, numbering more than two million. The next largest minority group is the Montagnards (mountain people) of the central highlands. The Khmer Krom (Cambodians) number at about 600,000 people, primarily living along the Cambodian border and at the mouth of the Mekong River. Other sizable minority groups are the Muong, the Tay, Meo, Man, and Cham.

LANGUAGES

The official language of the SRV is Vietnamese (Quoc ngu). A tonal language, it bears similarities to Khmer, Thai, and Chinese, and at least one-third of the vocabulary is derived from Chinese. Formerly, Vietnamese was written in Chinese characters, but under French rule a Romanized alphabet originally developed by Roman Catholic missionaries in the 17th century was adopted as the standard written form of the language. Most of the minority groups have their own spoken languages, and some have their own writing systems, but all children in the SRV receive instruction in the national language. Other languages include Chinese, English, French, Khmer, and the tribal languages of Mon-Khmer and Malayo-Polynesian.

RELIGIONS

The dominant religious belief was Buddhism; however, many believers practice a mixture of Mahayana Buddhism, Taoism, and Confucianism, sometimes called Vietnam's "Triple Religion." Though 50% of the population is nominally Buddhist, the government Office of Religious Affairs estimates that only 11% of the population are practicing Buddhists. Like many Asian peoples, the Vietnamese also practice spirit worship, a form of religious belief that was particularly prevalent among the tribal peoples.

Christianity was first brought to Vietnam in the 17th century by Roman Catholic missionaries sponsored by the French, the Spanish, the Portuguese, or the papacy. Eventually, however, propagation of the Christian faith was forbidden by the imperial court and Catholicism could only be practiced in secret. French priests were especially active in provoking the French decision to conquer Vietnam in the 19th century. Under French rule, Christianity prospered, and when Vietnam restored its independence in 1954, there were more than two million Catholics in the country, a population that increased to between six and seven million in 1998. Estimates indicate that 810% of the population are Roman Catholics. There are anywhere between 421,000 to 1.6 million Protestants in the country. About 65,000 people are Muslim, primarily Sunni. About 54,000 people are Hindu, most of whom are ethnic Cham. The Baha'i Faith claims a membership of between 6,000 and 8,000 people.

Two millenarian religious sects, the Cao Dai and the Hoa Hao, have became popular among peasants and townspeople in the Mekong Delta. Both religions are based in part on Buddhism. The Cao Dai claim a membership of about four million. The Hoa Hao have a membership of about 1.3 million.

Since reunification in 1975, religious activities have been restricted, although freedom of religion is formally guaranteed in the 1980 constitution. All religious groups must register with the government, a process established by the government as a means of monitoring and controlling religious activities. The government offers official recognition to some Buddhist, Roman Catholic, Protestant, Hoa Hao, Cao Dai, and Muslim organizations, a designation which offers some freedom to operate openly throughout the country; however, these groups must still receive government approval for all operations, including the appointment of church leaders.

TRANSPORTATION

The war wreaked massive damage on Vietnam's transportation network, especially its railways, roads, and bridges. Further damage occurred during the Chinese invasion in 1979, after which direct rail and air connections with China were severed. The nation's truck fleet is ancient and seriously lacking in spare parts. Most goods move by small barges or sampans along the countless waterways. The length of inland navigable waterways totals about 17,702 km (11,000 mi), of which 29% is navigable year-round by vessels with less than a 1.8 m draft. Major ports such as Haiphong in the north and Da Nang in the south, are frequently clogged with goods because many of the stevedoresoften overseas Chinesehave fled abroad. In 2005, Vietnam had a merchant fleet of 194 ships of 1,000 GRT or more, totaling 1,170,621 GRT.

Recognizing its importance to economic growth, the government is making a major effort to improve the transportation network. The railroads are to be expanded. As of 2004, Vietnam's railway system totaled 2,600 km (1,615 mi) of standard, narrow and dual gauge track, of which 2,169 km (1,347 mi) was narrow gauge, 178 km (111 mi) was standard gauge, and 253 km (157 km) dual gauge.

There were an estimated 24 airports as of 2004, of which 23 (as of 2005), had permanent-surface runways. The nation's air fleet remains primitive, as the national airline (Hang Khong Vietnam) uses Soviet passenger liners built in the 1950s. In 2003, about 4.553 million passengers were carried on scheduled domestic and international flights. There were 93,300 km (57,977 mi) of roads in the country in 2001, but only 23,418 km (14,552 mi) were paved. There were an estimated 101,100 passenger cars, 144,600 commercial vehicles in 2003. The main route from Hanoi to Ho Chi Minh City badly needs improvement. In 1997, the government authorized the construction of a new north-south highway, the largest infrastructural project ever undertaken in Vietnam. The construction will take at least 15 years, utilizing 10 days of mandatory labor from almost every citizen between the ages of 18 and 45.

HISTORY

During the first millennium bc, the Lac peoples, the ancestors of the modern-day Vietnamese, formed a Bronze Age civilization in the vicinity of the Red River Delta in northern Vietnam. The Lac were primarily rice farmers, although those living in mountain valleys occasionally practiced the slash-and-burn agriculture now prevalent among nomadic tribes in the Central Highlands and the mountainous regions in the north. In the 3rd century bc, the Vietnamese kingdom of Van Lang was conquered by a Chinese military adventurer who incorporated the Red River Delta area into his own kingdom in southern China. A century later, Vietnam was integrated into the expanding Chinese empire. During 1,000 years of Chinese rule, Vietnamese society changed significantly as it was introduced to Chinese political and social institutions; Chinese architecture, art, and literature; and the Chinese written language. In ad 939, during a period of anarchy in China, Vietnamese rebels restored national independence.

During the next several hundred years, the Vietnamese Empire, then known as Dai Viet (Great Viet), gradually developed its own institutions and expanded steadily to the south. Under two great dynasties, the Ly (10091225) and the Tran (12251400), the Vietnamese fended off periodic attempts by China to resubjugate Vietnam, while gradually expanding southward at the expense of their southern neighbor, Champa. In the early 15th century, Chinese rule was briefly restored, but a national uprising led by Le Loi led to the expulsion of the Chinese and the formation of an independent Le Dynasty (14281788). Under the Le, expansion to the south continued, and the entire Mekong River Delta came under Vietnamese rule during the 17th century. But expansion brought problems, as a weakened Le court slipped into civil war between two princely families, the Trinh in the north and the Nguyen in the south.

The division of Vietnam into two separate political entities came at a time when European adventurers were beginning to expand their commercial and missionary activities into East and Southeast Asia. In 1771, a major peasant revolt led by the Tay Son brothers destroyed the Nguyen and the Trinh and briefly united the entire country under Emperor Nguyen Hue, ablest of the Tay Son. But a prince of the defeated Nguyen house enlisted the aid of a French Roman Catholic bishop and raised a military force that conquered the Tay Son and reunited the country under a new Nguyen Dynasty (18021945). When the founding emperor, Gia Long, died in 1820, his son Minh Mang refused to continue the commercial and missionary privileges granted by his predecessor to the French. In 1858, French forces attacked near Saigon and forced the defeated Vietnamese Empire to cede territory in the area to the French, which became the colony of Cochin China. In 1884, France completed its conquest of the country, establishing a protectorate over central and northern Vietnam (now renamed Annam and Tonkin). In 1895, the three sections of Vietnam were included with the protectorates of Laos and Cambodia into a French-ruled Indochinese Union.

The first Vietnamese attempts to resist French rule were ineffectual. Western-style nationalist movements began to form after World War I, and an Indochinese Communist Party, under the leadership of the veteran revolutionary Ho Chi Minh, was formed in 1930. After the collapse of France in World War II, Japan forced the French administration to accept a Japanese military occupation of Indochina. During the joint French-Japanese rule, Communist forces under the umbrella of the Viet-Minh Front began to organize for a national uprising at the end of the war. In March 1945, the Japanese, nearing defeat, disarmed the French and seized full administrative control over French Indochina. At the same time, the Japanese set up a puppet government, with Bao Dai, the figurehead emperor of Vietnam, as nominal ruler. Shortly after Japan surrendered to Allied forces in August 1945, Viet-Minh forces, led by the Indochinese Communist Party, launched the nationwide August Revolution to restore Vietnamese independence. On 2 September, President Ho Chi Minh declared the formation of an independent Democratic Republic of Vietnam (DRV) in Hanoi. Under the Potsdam agreements, Nationalist Chinese troops occupied all of Indochina north of the 16th parallel, while British troops occupied the remainder of the old Indochinese Union. Chinese commanders permitted the Viet-Minh to remain in political control of the north, but the British assisted the French to restore their authority in the south.

In March 1946, the French and the DRV signed a preliminary agreement (the Ho-Sainteny Agreement) recognizing Vietnam as a "free state" in the new French Union. The agreement also called for a plebiscite in Cochin China to permit the local population in that colony to determine their own future. During the summer of 1946, French and Vietnamese negotiators attempted without success to complete an agreement on the future of Vietnam. In September, Ho Chi Minh signed a modus vivendi calling for renewed talks early in 1947, but military clashes between Vietnamese and French troops in the DRV led to the outbreak of war in December 1946. The Franco-Viet-Minh war lasted nearly eight years, ending in July 1954 after a successful siege of the French garrison at Dien Bien Phu by Viet-Minh forces. According to the Geneva agreement signed on 21 July, Vietnam was temporarily partitioned along the 17th parallel, pending general elections to bring about national reunification. North of the parallel, the DRV began to build a Socialist society, while in the south, an anti-Communist government under the Roman Catholic politician Ngo Dinh Diem attempted with US aid to build a viable and independent state. In the summer of 1955, Prime Minister Diem refused to hold consultations with the DRV on elections called for by the Geneva accords. On 26 October, Diem proclaimed the Republic of Vietnam (RVN), with its capital at Saigon. In a referendum held three days earlier, Diem had defeated ex-Emperor Bao Dai, and in 1956, Diem became president of the RVN under a new constitution written with US support. With the Geneva accords thus abrogated, Vietnamese guerrillas, supported by the DRV, initiated low-level political and military activities to destabilize the Saigon regime. Their efforts were assisted by Diem's own shortcomings, as he brutally suppressed all political opposition and failed to take effective measures to bring to an end the unequal division of landholding in South Vietnam.

In December 1960, revolutionary forces in the south formed a National Liberation Front (NLF) to coordinate political activities against the Diem regime. Guerrilla activities by the People's Liberation Armed Forces (known in the United States as the Viet-Cong) were stepped up, and Hanoi began to infiltrate trained cadres from the north to provide leadership to the revolutionary movement. Despite increasing economic and military assistance from the United States, the Diem regime continued to decline, and in November 1963, Diem was overthrown by a military coup waged with the complicity of US president John F. Kennedy's administration, which had watched in dismay as Diem had alienated Buddhist elements by his open favoritism toward Roman Catholics. A Military Revolutionary Council, led by the popular southern general Duong Van (Big) Minh, was formed in Saigon. General Minh promised to continue efforts to defeat the insurgency movement in the south but was unable to reverse the growing political anarchy in Saigon. Early in 1964, he was replaced by another military junta. During the next 15 months, a number of governments succeeded each other, while the influence of the NLF, assisted by growing numbers of regular troops that were infiltrating from the north, steadily increased in the countryside. By early 1965, US intelligence was warning that without US intervention, South Vietnam could collapse within six months.

Beginning in February 1965, US president Lyndon Johnson took two major steps to reverse the situation in South Vietnam. American combat troops were introduced in growing numbers into the south, while a campaign of heavy bombing raids was launched on military and industrial targets in the north. In Saigon, the political situation stabilized with the seizure of power by a group of army officers led by Nguyen Van Thieu and Nguyen Cao Ky. Encouraged by the United States, the new military regime drafted a constitution, and in elections held in September 1967, Gen. Thieu was elected president of the country. By 1967, US troop strength in South Vietnam had reached over 500,000, while US air strikes over DRV territory were averaging about 100 sorties a day. The Hanoi regime attempted to match the US escalation by increasing infiltration of North Vietnamese military units into the south, but under the sheer weight of US firepower, the revolution began to lose momentum, and morale was ebbing.

On 30 January 1968, in an effort to reverse the military decline on the battlefield and encourage the growing popular discontent with the war in the United States, Hanoi launched the Tet Offensive, a massive effort to seize towns and villages throughout the south. The attempt to seize Saigon or force the collapse of the Saigon regime failed to achieve its objective, but the secondary aim of undermining support for the war in the United States succeeded. President Johnson canceled plans to increase the US military commitment and agreed to pursue a political settlement. To bring about negotiations with Hanoi, a complete bombing halt was ordered on 1 November, just before the US presidential election that brought Richard M. Nixon to office as the new Republican president. President Nixon announced a policy of "Vietnamization," according to which US forces would be gradually withdrawn and the bulk of the fighting in the south would be taken over by RVN forces. On 30 April 1970, in order to destroy enemy sanctuaries beyond the South Vietnamese border, US and South Vietnamese forces invaded neutral Cambodia. The invasion backfired, however, stimulating the rise of revolutionary activities by the Hanoisupported Cambodian Communist movement and arousing protests in the United States that the war was being expanded. The withdrawal of US military forces continued, and in March 1972, the DRV attempted to test the capability of the South Vietnamese forces by launching a direct offensive across the 17th parallel. The "Easter Offensive" succeeded in capturing the provincial capital of Quang Tri, but further gains were prevented by the resumption of US bombing raids.

By this time, both sides were willing to compromise to bring the war to an end; on 26 October 1972, the DRV announced that secret talks between US secretary of state Henry Kissinger and its representative, Le Duc Tho, had produced a tentative agreement. Hanoi agreed to recognize the political authority of President Nguyen Van Thieu in Saigon, while the United States agreed to complete the withdrawal of US forces without demanding the removal of existing North Vietnamese troops in the south. The negotiations briefly ran aground in late autumn, leading President Nixon to order an intensive bombing assault on the DRV, but the talks resumed in early January, and the Paris Agreement was formally signed on 27 January 1973.

The Paris Agreement and the withdrawal of US forces by no means signaled the end of the conflict. Clashes between revolutionary forces and South Vietnamese units continued in the south, while provisions for a political settlement quickly collapsed. In January 1975, North Vietnamese forces in the south launched a major military offensive in the Central Highlands. When South Vietnamese resistance in the area disintegrated, further attacks were launched farther to the north, and by late March the entire northern half of the country was in North Vietnamese hands. President Thieu resigned on 21 April, but his successor, General Duong Van Minh, was unable to achieve a negotiated settlement. The capital of the RVN, Saigon, was occupied by North Vietnamese troops on 30 April. Thus ended a war in which some 2,000,000 Vietnamese and more than 56,000 Americans were killed and an estimated 4,000,000 people were injured. In the DRV, US bombing was estimated to have destroyed 70% of the industrial plants; in the RVN, more than four million were homeless. During the 195074 period, total US economic and military aid to Vietnam was $23.9 billion (including $16.1 billion in direct military aid), representing the largest bilateral assistance program in modern history. Chinese aid to the DRV (according to intelligence estimates) probably averaged over $200 million a year. No complete figures are available on the extent of Soviet assistance to the DRV, but some scholars estimate it at about $1 billion annually.

During the next 15 months, the DRV moved to complete national reunification of north and south. Nationwide elections for a new National Assembly were held on 25 April 1976. On 24 June, the first Assembly of the unified country met and proclaimed the establishment on 2 July of the Socialist Republic of Vietnam (SRV), with its capital remaining at Hanoi. In December, the Communist Party, known as the Vietnamese Workers' Party since 1951, was renamed the Vietnamese Communist Party. The NLF was dissolved into a nationwide Fatherland Front for the entire country. The nation's Communist leadership, with Le Duan the general secretary of the Communist Party and Pham Van Dong the prime minister, remained unchanged, while loyal members of the revolutionary movement in the south were given positions of prominence at the national level. Ton Duc Thang, figurehead president of the DRV after the death of Ho Chi Minh in 1969, remained in that position until his death in 1980.

Economic reconstruction and the building of a fully Socialist society proved more difficult than reunification. Nationalization of industry and collectivization of agriculture had been achieved in the north in the late 1950s, but the south proved more resistant to official efforts to end private enterprise after 1975. When the regime attempted to destroy the remnants of capitalism and private farming in the south in 1978, thousands fled, and the economy entered a period of severe crisis. Its problems were magnified by the outbreak of war with China. In December 1978, Vietnamese forces had invaded neighboring Kampuchea (known as Cambodia until 1976 and again from 1989) to overthrow the anti-Vietnamese government of the revolutionary Pol Pot. A pro-Vietnamese government was installed in early January 1979. China, which had been supporting Pol Pot to retain its own influence in Southeast Asia, mounted a punitive invasion of North Vietnam in February 1979. After a short but bitter battle that caused severe casualties on both sides, the Chinese forces withdrew across the border. China, however, continued to support guerrilla operations led by Pol Pot against the government in Kampuchea.

During the 1980s, the SRV attempted to recover from its economic crisis. Party leaders worked out a compromise permitting the survival of a small private sector while maintaining a program of gradual Socialist transformation. With the death of Le Duan in June 1986, a new leadership emerged under General Secretary Nguyen Van Linh at the Sixth National Party Congress. This leadership promised a new "openness" in political affairs and a policy of economic renovation (doi moi) to improve the livelihood of the population. A strong conservative coalition of party leaders seriously reduced Linh's effectiveness as they stressed the dangers of political liberalization and slowed the pace of economic reform. In March 1988 Prime Minister Pham Hung died, and Linh's choice of a conservative replacement, Do Muoi, was a clear concession to these groups.

Economic recovery continued to be difficult due to a serious lack of investment capital, resources, and technical skills. The SRV's internal problems were compounded by the continuing dispute with China. To protect itself from Chinese intimidation, Hanoi had formed a military alliance with the USSR and was deeply dependent upon Soviet economic assistance. The continuing civil war in Kampuchea also represented a steady drain on the SRV's slender resources and prevented foreign economic assistance, particularly from the United States. In December 1988 the constitution was amended to remove derogatory references to the United States, China, France and Japan, as an attempt to improve international relations. In August 1991 Do Muoi resigned as prime minister. His successor Vo Van Kiet favored free-market reforms. A new constitution was adopted by the National Assembly in April 1992. A general election took place in July 1992 and, for the first time, independent candidates were allowed to present themselves, but neither of the two deemed qualified were elected. On 23 September 1992, the National Assembly elected Lu Duc Anh as president and reelected Vo Van Kiet as prime minister.

In January 1989 the first direct talks between Vietnam and China since 1979 resulted in Vietnam's agreement to withdraw its troops from Cambodia by the end of September 1989 and China's agreement to end aid to the Khmer Rouge guerrillas once the Vietnamese withdrawal was achieved. Later, Vietnam insisted that the withdrawal was contingent on the end of all foreign military aid to factions opposing Cambodian Prime Minister Hun Sen. Hanoi hoped to use the September 1989 withdrawal of its troops from Cambodia as leverage for improved relations with the Association of Southeast Asian Nations (ASEAN), Japan, and the West. On 23 October 1991 a Cambodian peace agreement was signed, paving the way for Vietnam's eventual entry into ASEAN, which occurred in 1995.

The Soviet economic assistance on which Vietnam had depended, withered away with the collapse of the USSR, although technical help from Russia remains important. With the loss of major Soviet aid, Vietnam's relations with the West began to warm considerably. In June 1992, Vietnam announced that all South Vietnamese officials had been released from reeducation camps, a US-mandated prerequisite for lifting its embargo against Vietnam. As a result, on 3 February 1994 President Bill Clinton lifted the US trade embargo against Vietnam. At the time Clinton lifted the embargo, there were still 2,238 US servicemen listed as missing. Vietnam agreed to cooperate with their recovery to the "fullest possible extent." Vietnam and the United States established full diplomatic relations in 1995.

In October 1991 Vietnam agreed to accept the forced repatriation of Vietnamese refugeesknown as boat peoplewho were designated economic migrants, not seekers of political asylum. The boat people were in camps around Asia from 197594. The "comprehensive plan of action" adopted by the UN High Commission for Refugees in 1989 reduced the number of boat people fleeing Vietnam. In 1994, the Commission decided that all those still living in camps were to be repatriated.

During the 1990s, Vietnam stepped up its efforts to attract foreign capital from the West and regularize relations with the world financial system. At the same time, the country struggled with its intention not to descend too deeply into Western style consumerism, as demonstrated in 1996, when the government, while continuing to court foreign investment, banned consumer-goods advertising in foreign languages. That move angered Western investors and free-market Vietnamese, but marked the beginning of a countrywide attempt to purge society of overt Western decadence. Analysts attributed the drive to the aging hard-line leadership who looked at the doi moi reforms with intense skepticism.

After joining ASEAN in 1995, Vietnam began reframing its trade laws and began instituting legal reforms aimed at codifying its sometimes capricious statutory system. During 1995, a significant year in Vietnam's opening up to the world, the Communist Party held two meetings to discuss the establishment of a law-based civil society to replace the decades-old system of rule by fiat. In this spirit, the National Assembly passed a series of laws aligning the country with international standards on copyright protectionneeded for World Trade Organization (WTO) membershipand other areas. An extensive document, called the Civil Code, was passed containing 834 articles ostensibly granting the Vietnamese people greater civil liberties. Other measures were decidedly investor-unfriendly, such as Prime Minister Kiet's decree that no more land would be turned over from rice production to industrial use. Subsequently, Vietnam's foreign investment rate slid from a peak of $8.6 billion in 1996, to just $1.4 billion in 1999.

In June 1996, the Communist Party held its eighth congress, its first full congress since 1991. Much was expected from the congress in light of the country's ambiguous and, at times, conflicting moves toward openness and reform over the 12 years of doi moi. The congress returned to power the aging leadership, granting additional five-year terms to General Secretary Do Muoi, President Le Duc Anh, and Prime Minister Vo Van Kiet. The Party issued decrees in favor of continued economic reform and international investment, but balked at the kind of market liberalization most internationalist investors perceive as necessary to the creation of a viable economy.

After the long war between the Communists and the United States, 30 April 2000 marked Vietnam's reunification. Celebrations of the occasion, with military parades and a carnival atmosphere, were followed by the 6 May funeral of former prime minister Pham Van Dong. One of the original troika leading Vietnam during the struggle against France and the United States, Dong (born in 1906) had been an influential, unswerving Communist conservative. It remains to be seen whether the inevitable winnowing of Vietnam's "gerontocracy" will result in significant liberalization.

Severe, violent unrest in the countryside during 1997 led to punishment of rural officials for corruption, and increased awareness of agricultural concerns. As much as 80% of Vietnam's population lives in farming communities. Expressions of rural discontent continued to emerge, even in the form of peasant anticorruption protests in the streets of Ho Chi Minh City.

As aftereffects of the 1997 Asian economic crisis stunted the growth of Vietnam's economy, the country remained poor at the beginning of the 21st century. In spite of strides in rice production, literacy and education, unemployment outpaces economic growth. Rural infrastructure languishes, and the urban gap between a rich elite and struggling masses is enormous. Socialist rhetoric and retrenchment failed to heal the divide, which also exists between North and South. Some effort has been made to recognize Party officials from the South, such as early 2000s appointment of Truong Tan Sang, who had been Ho Chi Minh City's Party head, to lead the Party's economic commission. The reformists within the Party have never been completely marginalized, only outmaneuvered by the old-time Marxists. Retired General Tran Do's open criticism of corruption and other failures of the system resulted in his expulsion from the Party in January 1999. General Tran Do endured other forms of harassment, but it was not as severe as that meted out to other dissidents, due to his revered war veteran, communist faithful, status. He died on 9 August 2002.

Issues of importance relevant to Vietnam's reintegration into the international system have included the status of Vietnamese refugees; border and troop withdrawal disputes with Cambodia, Thailand, and the People's Republic of China; conflicts over the Spratly and Paracel island groups in the South China Sea; conflicts with the United States over the recovery of the remains of US soldiers missing-in-action (MIA); and Vietnamese cooperation in a diplomatic settlement in Cambodia.

Trade between the United States and Vietnam was normalized in December 2001. Vietnam initially did not want to be perceived by China as overly friendly with the United States, and the Party elite was reluctant to embark on the economic overhaul that the United States demands. Nevertheless, trade relations between the United States and Vietnam grew steadily in the first decade of the early 21st century. United Airlines began servicing Vietnam in 2004. By April 2005, around the time of the 30th anniversary of the fall of Saigon, the United States had become Vietnam's largest export market. Trade between the two countries totaled $6.4 billion by 2004, compared with $451 million in 1995. Stronger trade ties helped Vietnam's economy grow considerably. The World Bank, for instance, had rated 58% of Vietnam's population as poor in 1993; by 2002, that figure stood at 29%. Through the mid-1990s into the early 21st century, the country's economy grew at an annual 7.4% rate.

A May 2000 report, "Vietnam: Silencing of Dissent" by Human Rights Watch, detailed ways in which those expressing views counter to the Party line are subjected to "harassment and intimidation," although it noted that Vietnam has fewer actual political prisoners than in the past. The US government (particularly members of Congress) remains critical of Vietnam's human rights policies, including arbitrary arrest and detention of citizens. In contradiction to assertions of commitment to the cause of human rights, authorities continued to severely limit freedom of speech, press, assembly and association, workers' rights, and rights of citizens to change their government.

Print and broadcast media remain firmly state-dominated. In January 2002, the Communist Party ordered the seizure and destruction of unauthorized books written by leading dissidents. The arrival of Internet access in Vietnam began to provide a means for free expression, although so far Internet content is government monitored. In August 2001, the government passed a decree that imposed stricter regulations on Internet cafes and imposed fines for illegal Internet usage, while opening up provision of Internet services to privately owned businesses, including foreign companies. The government controlled the operation of the sole Internet access provider. In August 2002, the government proposed severe penalties for Internet cafe owners who allow customers to visit antigovernment or pornographic websites. There were approximately 4,000 Internet cafes in 2002.

The controversy between the People's Republic of China and Vietnam over the control of the Spratly and Paracel archipelagoes in the South China Sea dates to the early part of the 20th century. After the Vietnam War, when oil supplies became an issue, the dispute intensified, leading to numerous armed clashes between China and Vietnam. Vietnam, China, the Philippines, Brunei, Taiwan, and Malaysia claim all or part of the Spratly and Paracel archipelagoes. These competing claims have broad geopolitical implications regarding oil reserves, fishing rights, rights of passage for ships, prevention of nuclear dumping, and security in the region. In 1995, China occupied Mischief Reef, on an island in the area claimed by the Philippines and later that year China signed an agreement with a US oil exploration firm to drill for oil in waters claimed by Vietnam. As a member of ASEAN, Vietnam took its complaint to that body. In March 1997, a meeting of the ASEAN ambassadors was convened in Hanoi and the regional bloc emerged united in opposition to China's move against what they officially recognized as Vietnam's legal territory, marking the first time the ASEAN nations stood up in defiance of Beijing. Vietnam staked its own claim to the islands when it fired on a Philippines jet in 2002. Although the disputes over the islands remained unresolved as of early 2003, all of the claimants except for Taiwan agreed to resolve the dispute eventually through peaceful means.

At the ninth Party congress held in April 2001, reform-minded National Assembly chairman Nong Duc Manh was chosen as General Secretary to replace the unpopular Le Kha Phieu, who was increasingly seen as an obstacle to Vietnam's modernization. In 2002, the Party revised its rules to allow members to engage in private business. At the meeting of the National Assembly in July 2002, Prime Minister Phan Van Khai and General Secretary Nong Duc Manh, among others, identified corruption as one of the government's main challenges. By September, more than 100 government officials had been arrested, more than 50 police officers had been suspended from duty, and two members of the Central Committee were expelled from the Party for dealings with Nam Cam, a crime figure involved in drug, prostitution, and protection rackets.

In National Assembly elections held on 19 May 2002, approximately 700 candidates competed for 498 seats, some of whom were independents. However, a government body, the Fatherland Front, was responsible for screening candidates. No opposition parties contested the vote. In July 2002, President Tran Duc Luong was reappointed for a second term by the National Assembly, which also reappointed Prime Minister Phan Van Khai for a second five-year term. The next presidential election was to be held in 2007.

GOVERNMENT

The Communist Party-controlled government of Vietnam has ruled under four state constitutions. The first was promulgated in 1946, the second in 1960, the third in 1980, and the fourth in 1992.

The 1946 constitution of the Democratic Republic of Vietnam (DRV), adopted shortly before the war with the French, was never fully implemented because of wartime conditions. On 1 January 1960, a new constitution was promulgated, instituting a largely presidential system to capitalize on Ho Chi Minh's considerable prestige. In the Republic of Vietnam (RVN), formerly South Vietnam, two constitutions were promulgated. The first, by the regime of Ngo Dinh Diem was introduced in 1956. The second was put forth when Nguyen Van Thieu was elected president in 1967. Like the DRV constitution, it created a modified presidential system, with a cabinet responsible to the legislative branch. Following the fall of the RVN in 1975, the north moved quickly toward national reunification. A nationwide National Assembly was elected in April 1976, and the Socialist Republic of Vietnam was proclaimed in early July. In December 1980, the SRV adopted a new constitution for the entire country. The new charter, more doctrinaire than its predecessors, described Vietnam as a "proletarian dictatorship" led by the Communist Party, and called for an early transition to full Socialist ownership. The highest state authority was the National Assembly. Members were elected for five-year terms by universal adult suffrage at age 18. The Assembly appointed the Council of Ministers (a cabinet of 33 ministers), the chairman of which ranked as premier. The Council of State (12 members in 1987) served as the collective presidency of Vietnam, elected by the National Assembly from among its own members and accountable to it.

In 1992 a new constitution was adopted by the National Assembly. Like the 1980 constitution it affirmed the central role of the Communist Party, stipulating that the party must be subject to the law. In support of a free-market economy, constitutional protection of foreign investment was guaranteed. However, land remained the property of the state, with individuals or enterprises entitled to the right to long-term leases that can be inherited or sold. The newly created position of president replaced the Council of State; the president has the right to appoint a prime minister subject to the approval of the National Assembly. The National Assembly, with a maximum of 400 members, retained legislative power. Members are elected to five-year terms by universal adult suffrage. As of 2002, there were 498 members of the National Assembly. The next election was to take place in 2007.

POLITICAL PARTIES

The government of the SRV is a de facto one-party state ruled by the Vietnamese Communist Party (VCP). The Vietnamese Communist Party is the political successor to the Indochinese Communist Party, created in 1930 and formally dissolved in 1945. From 1945 until 1951, the party operated in clandestine fashion, until it emerged once more as the Vietnamese Workers' Party at the Second National Congress in 1951. The party assumed its current name in 1976, shortly after the unification of the country into the Socialist Republic of Vietnam.

The Communist Party is administered through an assembly of national delegates. National party conventions elect a Central Committee to guide party affairs between sessions of the national convention. The Central Committee in turn elects the Politburo, the highest policy making body, and a secretariat to direct day-today party operations.

The Fatherland Front is the linear successor of the Viet-Minh Front, formed in 1941 to provide the Communist Party with a broad organization to unify all elements in Vietnam against the French colonial regime. The Fatherland Front was formed in North Vietnam in 1955 as a device to mobilize the population to support the regime's goals. A similar organization, the National Liberation Front (NLF), was established in South Vietnam in 1960 by Nguyen Huu Tho to provide a political force in favor of national reunification. After the fall of the RVN in 1975, the NLF was merged into the Fatherland Front.

Under the RVN government, development of a political party system in the Western sense never passed the rudimentary stage. President Thieu, who headed the People's Alliance for Social Revolution, tried to consolidate anti-Communist political organizations in the RVN through a multiparty National Social Democratic Front, but formal political organizations were weak and plagued with religious and regional sectarianism. Wartime conditions and the lack of a national tradition of political pluralism were additional factors preventing the rise of a multiparty system. All such parties were abolished after the fall of Saigon in 1975.

In the SRV, elections for national and local office are controlled by the Communist Party and the state. In the July 1992 general elections 601 candidates contested 395 National Assembly seats. For the first time independent candidatesnot Communist Party members or endorsed by organizations affiliated with the Partywere permitted to contest seats, although they did require Party approval in order to present themselves. Two candidates qualified, but neither was elected. In 1996, the Communist Party held its eighth congress, at which it was widely expected a new generation of leaders would be inaugurated; but, again the aging hard-line leaders were given another five-year term in office as the country struggled with the consequences of 12 years of economic reform and increased international openness. In 1998's national elections, the first three "self-nominated" candidates (not proposed by the Party or the Fatherland Front) managed to gain seats in the 450-member National Assembly. Women held 26% of seats in the National Assembly as of May 2000, but have not yet risen to the top echelons of the Party. At the ninth party congress held in April 2001, National Assembly chairman Nong Duc Manh was chosen as general secretary, which was seen as a step toward reform. In the 19 May 2002 elections for the 498-member National Assembly, some independents competed for seats, although the Fatherland Front was responsible for approving them. No opposition parties contested the vote. The Communist Party took 90% of the vote (447 seats): the other 10% (51 seats) was won by candidates who are not Party members but were approved by the Party.

LOCAL GOVERNMENT

Vietnam is divided into 59 provinces (tinh ), and five municipalities (thu do )Can Tho, Da Nang, Hanoi, Haiphong, and Ho Chi Minh Cityall administered by the national government. Districts, towns, and villages are governed by locally elected people's councils. Council candidates are screened by the party. Council members' responsibilities include upholding the constitution and laws and overseeing local armed forces units. The councils in turn elect and oversee executive organs, called people's committees, to provide day-to-day administration. The entire system functions in a unitary fashion, with local organs of authority directly accountable to those at higher levels.

JUDICIAL SYSTEM

The judicial system of the SRV parallels that of the former DRV. The highest court in Vietnam is the Supreme People's Court, whose members are appointed for five-year terms by the National Assembly on the recommendation of the president. In addition, there are local people's courts at each administrative level; military courts; and "special courts" established by the National Assembly in certain cases. Law enforcement is handled by the People's Organs of Control; the president, or procurator-general, of this body is appointed by the National Assembly.

Although the constitution provides for the independence of judges and jurors, there is close control of the entire governmental system by the Vietnamese Communist Party (VCP) and a judicial selection process which favors appointment of jurists supportive of the VCP. Prison sentences are frequently imposed through administrative procedures without the protections of procedural due process or judicial review.

Trials are generally open to the public. Defendants have the right to be present at the trial, to have an attorney, and to crossexamine witnesses. The legal system is based on communist legal theory and French civil law. Rising crime, including violent robbery and extortion, in the cities, plus endemic corruption and smuggling, provide challenges for under-funded law enforcement agencies and the criminal justice system.

ARMED FORCES

Since reunification in 1975, Vietnam has continued to maintain a strong military presence. As of 2005, the armed forces had 484,000 active personnel. Of that figure, the Army had about 412,000 personnel, the People's Air Force 30,000 members and the Navy an estimated 15,000 personnel, in addition to 27,000 naval infantry troops. Reserves numbered between three and four million. The Army's primary armament included 1,315 main battle tanks, 620 light tanks, 100 reconnaissance vehicles, 300 armored infantry fighting vehicles, 1,380 armored personnel carriers and over 3,040 artillery pieces. The Navy's major units included two tactical submarines, six frigates, five corvettes 37 patrol/coastal vessels and 15 mine warfare ships. The People's Air Force had 221 combat capable aircraft that included 204 fighters, in addition to four fixed wing antisubmarine aircraft, 26 attack and 13 antisubmarine warfare helicopters. Paramilitary forces include an estimated 40,000 member Border Defense Corps and local rural and urban militia units with more than five million members. The defense budget in 2005 totaled $3.47 billion.

INTERNATIONAL COOPERATION

Vietnam was admitted to the United Nations on 20 September 1977. The nation belongs to ESCAP and several nonregional specialized agencies, such as the World Bank, IAEA, the FAO, UNESCO, UNIDO, UNCTAD, and the WHO. Vietnam is also a member of the Asian Development Bank, APEC, ASEAN, the Colombo Plan, and G-77. The country has observer status in the WTO. Vietnam is part of the Nonaligned Movement.

In environmental cooperation, Vietnam is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, the Kyoto Protocol, the Montréal Protocol, MARPOL, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Wet-rice agriculture is the most important segment of the Vietnamese economy. Approximately 65% of the workforce is engaged in agriculture. While agriculture has continued growth, transforming Vietnam from a net importer 15 years ago into the second-largest exporter of rice, industry has grown even faster. Industry in 2005 accounted for 40.9% of GDP, services 38.1%, and agriculture 21%. The most diversified area in Southeast Asia in terms of mineral resources, Vietnam is well endowed with coal, tin, tungsten, gold, iron, manganese, chromium, and antimony. Foods, garments, shoes, machines, cement, chemical fertilizer, glass, tires, oil, coal, steel, and paper are the main industrial products. Most of the nation's mineral resources are located in the north, while the south is a major producer of rice and tropical agricultural products, such as rubber, coffee, and tea. The war took its heaviest economic toll on Vietnam's infrastructure, which even in the best of times was far from adequate to afford access to and mobilization of the country's agricultural and industrial resources. Further setbacks came in the late 1970s. In 1976, the regime announced a five-year plan, calling for rapid industrialization and Socialist transformation by the end of the decade. According to official sources, in 1978 floods destroyed 3 million tons of rice, submerged over 1 million hectares (2.5 million acres) of cultivated land, and killed 20% of all cattle in the affected areas along the central coast. The termination of all Chinese aid in the same year, followed by the Chinese attack on the north in FebruaryMarch 1979, dealt the economy further blows. Vietnam's economy had already been weakened by the military effort in Kampuchea (known as Cambodia until 1976 and again after 1989) and by the suspension of food aid from the EC (now EU), the United Kingdom, Australia, and New Zealand because of objections to Vietnam's refugee policies. Reportedly, the country came close to general famine in 1979.

In 1979, faced with serious shortages of food and consumer goods, Vietnamese leaders approved a new program granting incentives for increased productivity and delaying the construction of farm collectives in the southern provinces. During the 198185 five-year plan, emphasis was placed on agriculture and the production of consumer goods. Economic performance improved in the early 1980s, with the growth rate estimated at about 10% annually. Price inflation, however, became a major problem, averaging 700% in 198687.

Policy changes were introduced incrementally with economic liberalization preceding consideration of political liberalization. On 3 February 1994 US President Clinton lifted the trade embargo against Vietnam that had been in place for 33 years. The reforms helped Vietnam's economy to grow at a rate of 9% a year during most of the 1990s and by almost 10% in 1996. Growth in the industrial sector was especially strong at over 12% annually between 1988 and 1997. In Hanoi, the increased presence of a foreign community spurred the availability of western-style restaurants and bars, hotel and airport renovation and upgrading, accessible public telephones, and advertising of consumer goods. However, with the onset of the Asian financial crisis in 1997, growth, which was 8.2% for the year in 1997, dropped to 3.5% in 1998 and 4.5% in 1999. Growth increased to 6.8% in 2000, to 6.9% in 2001, 7% in 2002, 7.2% in 2003, and 8.4% in 2005. The pace of growth was projected to be impressive in 200607, aided by solid growth in industry, but was forecast to decline slightly from the seven-year high reached in 2005.

Unemployment grew during the 1990s to an estimated 25% in 1995. Several factors contributed to Vietnam's growing unemployment: natural increases in the population; monetary and other adjustments for hyperinflation, which intensified the unemployment problem by limiting growth in some sectors of the economy; the return of demobilized troops from Cambodia; repatriation of refugees; workers laid off from state enterprises; and returning guest workers. However, with capital investment, this labor force could be turned into a resource for growth in labor-intensive manufacturing, considering the low wage base in Vietnam, the high skills levels, and high motivation. The unemployment rate was estimated at 6.1% in 2003, and at 2.4% in 2005. Inflation, which jumped from 3.1% in 1997 to 7.9% in 1998, moderated to 4.1% in 1999, and was at negligible levels in 2000 (-1.7%) and 2001 (0.8%). By 2005, the inflation rate stood at 8%, and had averaged 4.4% over the 200105 period. The Party leadership is concerned about persistent unemployment and underemployment, the widening gap between rich and poor, and increases in bankruptcy, prostitution, and corruption.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Vietnam's gross domestic product (GDP) was estimated at $251.8 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $3,000. The annual growth rate of GDP was estimated at 7.6%. The average inflation rate in 2005 was 8%. It was estimated that agriculture accounted for 21% of GDP, industry 40.9%, and services 38.1%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $2.700 billion or about $33 per capita and accounted for approximately 6.9% of GDP. Foreign aid receipts amounted to $1,769 million or about $22 per capita and accounted for approximately 4.5% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Vietnam totaled $25.36 billion or about $312 per capita based on a GDP of $39.2 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 5.2%. In 2001 it was estimated that approximately 49% of household consumption was spent on food, 15% on fuel, 4% on health care, and 18% on education. It was estimated that in 2002 about 28.9% of the population had incomes below the poverty line.

LABOR

Vietnam's labor force was estimated at 44.03 million in 2005. As of 2003, the nation's occupational breakdown was as follows: agriculture (including forestry and fishing) 59.7% of the labor force; industry 16.4%; and the services sector 23.9%. Unemployment in 2005 was estimated at 2.4%.

As of 2002, Vietnamese workers were not free to form or join independent unions. The government-controlled Trade Union Federation of Vietnam (VGCL) is the sole labor organization, and all workers automatically become members of the union of their workplace. In 2001, the VGCL had four million members throughout the country, including 95% of all public sector employees, 90% of workers in state-owned enterprises, and 70% of private sector workers. Strikes are prohibited at enterprises that serve the public or are important to the national economy or defense, and the Prime Minister decides what enterprises come under that definition. Most strikes occur against foreign enterprises.

The minimum age for full-time employment is 18, with special provisions for those between 15 and 18 years of age. However, many children work in violation of this law, especially in the informal economy. The Labor Law requires the government to set a minimum wage, which was $30 per month for foreign-investment joint ventures in 2002. Outside of these enterprises the minimum was set at $12 per month. Working hours are set by law at eight hours per day with a mandatory 24-hour rest period per week. Working conditions are slowly improving.

AGRICULTURE

Nearly 67% of the labor force of the SRV derives its livelihood from agriculture; arable land in 2003 was 8,980,000 hectares (22,190,000 acres). In 2004, there were 32,961 farms with sown crops and 22,759 with perennial crops.

Only about 15% of the land in the north is arable, and 14% of it is already under intensive cultivation. Agriculture in the north is concentrated in the lowland areas of the Red River Delta and along the central coast to the south. The Mekong Delta, among the great rice-producing regions of the world, is the dominant agricultural region of the south. Excess grain from the area is shipped to the northern parts of the country. Annual food-grain production averaged 20 million tons in the early 1990s, reaching 39.6 million tons in 2004.

Rice, the main staple of the Vietnamese diet, occupies 94% of arable land. In the north, two and in some cases three crops a year are made possible through an extensive system of irrigation, utilizing upward of 4,000 km (2,500 mi) of dikes. Single-cropping remains the rule in the south, where heavy rains fall for six months of the year and virtually no rain at all during the other six months. The southern region's extensive network of canals is used mainly for transport and drainage, although some irrigational use was attempted under the RVN government. Rice production between 1975 and 1980 was adversely affected by bad weather and the regime's attempt to promote collectivization, but it began to rebound during the early 1980s. In 1980, 11.7 million tons of paddy rice were produced; output rose to 16.2 million tons in 1985 and to 19.2 million tons in 1990. Production totaled 36.1 million tons in 2004.

Other crops include corn, sorghum, cassava, sweet potatoes, beans, fruits, and vegetables. In 2004, estimated production (in thousands of tons) was sugarcane, 15,880; corn, 3,453; groundnuts in shell, 451; and soybeans, 252. Rubber, formerly a major crop and a leading source of foreign exchange, was grown mostly on large plantations organized under the French colonial regime. As a result of the Vietnam war, practically all of the large plantations in the "redlands" area in the south were shut down, and damage to the trees was severe. In 1975, the SRV announced that rubber workers had resumed the extraction of latex from hundreds of thousands of rubber trees on plantations north and northwest of Ho Chi Minh City, most of which had lain fallow for years. Rubber production was given high priority by the Hanoi regime and increased from 40,000 tons in 1975 to an estimated 400,000 tons in 2004. Other industrial and export crops produced in Vietnam include coffee, tea, tobacco, pepper, and jute. In 2004, 834,600 tons of coffee (second in the world after Brazil), 108,000 tons of tea, 95,700 tons of pepper, 14,000 tons of jute, 27,000 tons of tobacco, and 825,700 tons of cashews (first in the world) were harvested.

Agriculture in the north has reached an advanced stage of collectivization. A land-reform program completed in 1956 distributed 810,000 hectares (2,002,000 acres) to 2,104,000 peasant families. The share of the Socialist sector in agricultural land increased from 1% in 1955 to 95% in 1975. By 1977, the north had 15,200 agricultural cooperatives and 105 state farms.

In the south, rapid collectivization began in 1978, when the regime announced a program to place the majority of southern farmers in low-level cooperative organizations by the end of the 197680 five-year plan. Popular resistance was extensive, however, and by 1981, less than 10% of the rural population was enrolled in full-scale collectives and a roughly equal number in lowlevel, semi-Socialist production solidarity teams and production collectives.

In an effort to make collectivization more palatable, the regime announced a "household contract" system, permitting members of cooperatives to lease collective land in return for an agreed proportion of total output. This system apparently encouraged many peasants to join cooperative organizations, and the regime announced in mid-1986 that collectivization at the low level had been "basically completed" in the south, with 86.4% of the rural population enrolled in some form of collective organization. In 2003, of the 7,694 agricultural cooperatives throughout Vietnam, only about 25% were in the south.

ANIMAL HUSBANDRY

The most important aspect of animal husbandry in the SRV remains the raising of draft animals, mainly water buffalo. Lack of feed, shelter, and technical guidance and an inability to control disease combine with the legacy of war damage to hinder the growth of this sector. Increasing the livestock is now a major priority of the Hanoi regime. The sizes of herds in 2005 (with 1975 figures in parentheses) was as follows: hogs, 27,000,000 (8,800,700); buffalo, 2,950,000 (2,193,000); and cattle 5,250,000 (1,485,000). Vietnam also had an estimated 1,200,000 goats, 111,000 horses, 195 million chickens, and 50 million ducks in 2005. Meat production totaled 2,740,000 tons in 2005, with pork accounting for 77%; poultry, 14%; buffalo and other meat, 9%.

FISHING

Fresh and dried fish and fish sauce (known as nuoc mam) are major ingredients of the Vietnamese diet, and fishing is an important occupation. Shrimp, lobster, and more than 50 commercial species of fish are found in Vietnamese waters. Ha Long Bay, the major fishing area of the north, is particularly rich in shrimp and crayfish. Fish also abound in Vietnam's rivers and canals. In 2004, Vietnam had 20,071 vessels engaged in offshore fishing.

The fishing industry was severely depleted after the Vietnam War, when many fishermen (often overseas Chinese) fled the country. The government has increased marine production into a major export industry. In 2003, ocean production was estimated at 1,896,277 tons, and inland production was estimated at 738,111 tons. Exports of fish products were valued at $2.2 billion in 2003. Vietnamese aquaculture primarily produces cyprinids and prawns. In 2004, there were 35,424 fish farms covering 904,900 hectares (2,236,000 acres), 70% in marine or brackish water, primarily for shrimp. That year, farmed shrimp production totaled 290,200 tons. The government estimates the value of aquaculture at d33 trillion, or 66% of the total output value of fishing in 2004.

FORESTRY

In 2004, forests covered 37% of the total land area of Vietnam, consisting of 9.9 million hectares (24.5 million acres) of natural forest and 2.27 million hectares (5.61 million acres) of planted forest. Important forestry products include bamboo, resins, lacquer, quinine, turpentine, and pitch. Depletion of forests, however, has been serious, not only through US defoliation campaigns in the south during the war, but also because of the slash-and-burn techniques used by nomadic tribal groups in mountainous areas. Planted forests are mainly found in the northeast, where they serve as watershed protection and supply materials for the mining and paper industries. In 1998, the government began a reforestation program which aims to increase the forest cover by 5 million hectares (12.3 million acres) by 2010.

The damaged areas are recovering faster than anticipated, although reforestation has been slow and some regions are faced with sterility and erosion. Official policy emphasizes the replacement of natural forests with export crops such as cinnamon, aniseed, rubber, coffee, and bamboo. Roundwood production was estimated at 30,597,000 cu m (1.08 billion million cu ft) in 2004, with 86% used as fuel wood. Vietnam has become a world-class producer of wooden furniture, with exports rising from $200 million in 2000 to nearly $1.5 billion in 2005.

MINING

Vietnam had a wide variety of important mineral resources, but the mining sector was relatively small and undeveloped. The principal reserves, located mainly in the north, were bauxite, carbonate rocks, chrome, clays, anthracite coal, copper, natural gas, gemstones, gold, graphite, iron ore, lead, manganese, mica, nickel, crude petroleum, phosphate rock (apatite), pyrophyllite, rare earths, silica sand, tin, titanium, tungsten, zinc, and zirconium. Coal dominated the mining sector, and, along with carbonate rocks, crude petroleum, and phosphate rocks, was produced in large quantity. Iron reserves were estimated at 520 million tons, and apatite reserves, 1.7 billion tons. Bauxite mines in the Central Highlands Province (Lam Dong) were capable of producing 1.7 million tons per year of ore. Mining and quarrying contributed 6.1% to gross domestic product (GDP) in 2003. Also among leading industries were the production of cement, chemical fertilizer, oil, coal, and steel; crude oil was its top export commodity. Vietnam's movement toward a free market has resulted in increased international trade.

Estimated production outputs in 2004 included: chromium ore (gross weight), 150,000 metric tons, up from 120,000 metric tons in 2003; ilmenite (gross weight), 200,000 metric tons, unchanged from 2003; mined zinc, 40,000 metric tons, down from 45,000 metric tons in 2003; mined tin, 3,500 metric tons, up from 2,100 metric tons in 2003; gold, 2,000 kg, unchanged from 2003; lime, 1.5 million tons; and silica sand, 63 million tons, unchanged from 2003. Vietnam also produced barite, bauxite, bentonite, hydraulic cement, chromium, kaolin clay, refractory clay, construction aggregates, copper, fluorspar, gemstones, granite, graphite, ilmenite, iron ore, lead, lime, marble, nitrogen, phosphate rock, pyrite, pyrophyllite, rare earths, salt, silica sand, sulfur, building stone, and zirconium. Most chromite, ilmenite, and zirconium, and some granite, kaolin, salt, and silica sand, was exported. No tungsten was reported produced from 2000 through 2004. Asian Mineral Resources started two diamond drilling programs at nickel deposits. The mining industry comprised state-owned companies, several state-and-foreign mining and mineral-processing company joint ventures, many small-scale local government-owned mining companies, local governmentprivate mining company joint ventures, and local private miners.

ENERGY AND POWER

Vietnam has the potential to become a regional supplier of oil and natural gas.

As of 1 January 2005, Vietnam had proven oil reserves of 600 million barrels, according to the Oil and Gas Journal. However, that total is seen as increasing as exploration continues to move forward. In 2004, oil production was estimated at 403,000 barrels per day. With domestic consumption in 2004 estimated at 210,000 barrels per day, Vietnam that year became a net oil exporter. In 2004, net oil exports totaled an estimated 193,000 barrels per day.

Vietnam also has reserves of natural gas, estimated by the Oil and Gas Journal, as of 1 January 2005, at 6.8 trillion cu ft. However, it is expected that the country's actual reserves may total as much as 10 trillion cu ft. As of 2002, Vietnam consumed all the natural gas it produced. In that year, output of natural gas and domestic consumption each totaled an estimated 79.8 billion cu ft.

Vietnam also has coal reserves of 165 million short tons, most of which is anthracite coal. In 2002, coal production totaled an estimated 14.4 million short tons. In that year, demand for coal totaled an estimated 9.1 million short tons, making the country a net exporter of coal. Exports of coal that year totaled 5.3 million short tons.

Vietnam's electric power generating capacity in 2002 totaled 8.323 million kW, of which 4.195 million kW of capacity was came from conventional thermal plants. Hydroelectric plants accounted for the remaining 4.128 million kW. Electric power output in 2002 totaled 34.558 billion kWh, of which 16.542 billion kWh came from conventional thermal plants and 18.016 billion kWh, from hydroelectric plants. In the same year, consumption of electricity totaled 32.139 billion kWh.

Control over the Spratly Islands remains a contentious issue between Vietnam, China, Taiwan, the Philippines, Brunei, and Malaysia. The reefs, many of which are partially submerged, lie atop an oil field containing an estimated 17 billion barrels of oil.

INDUSTRY

Most heavy and medium industry is concentrated in the north, including the state-owned coal, tin, chrome, and other mining enterprises; an engineering works at Hanoi; power stations; and modern tobacco, tea, and canning factories. The industrial sector in the south is characterized by light industry and consumer goods industry, including pharmaceuticals, textiles, and food processing, although there are some large utilities and cement works. Much of the industrial sector in the north was badly damaged by US bombing raids during the war. In the south, the private sector was permitted to continue in operation after 1975, but all industry and commerce above the family level was nationalized in March 1978. The results were disastrous, and the regime now permits the existence of a small private sector, mainly in the area of consumer goods and other light industry. The results have been generally favorable; industrial production in the 1980s increased at an average annual rate of 9.5%. During the 1990s, industrial production grew by about 12% per year. Industry accounted for 40.9% of GDP in 2005, up from 28% in 1995. Industrial gross output increased by 15.2% in 2005. Leading industrial sectors are food processing, garments, shoes, machine building, mining, cement, chemical fertilizers, glass, tires, oil, coal, steel, and paper.

Food processing and packaging accounts for 40% of total export turnover. The average annual growth rage has been about 11%.

VINATEX (Vietnam National Textiles and Garment Corporation), the largest Vietnamese corporation in the textile sector, planned to invest $900 million in the period 2001 to 2005, made up of $700 million in the textiles sector and $200 million in material and accessories sectors, for equipment upgrades. In January 2005, the WTO abolished world textile quotas, and Chinese exports to the United States and EU soared: both the United States and EU during the course of 2005 reimposed certain quotas to protect their textile industries, thus putting a slight curb on the flow of Chinese goods. Although this policy bode well for developing Southeast Asian textile exporters, as competition with China was eased, Vietnam in 2005 was not yet a member of the WTO and thus still faced quotas on its exports to the United States, which it was trying to fill. But because its wages are lower than China's, Vietnam in the long term must pursue strategies to save its clothing industry once it enters a quota-free world.

Vietnam exports about $3 billion worth of footwear a year, its third-largest export earner after crude oil and textiles. In 2004, Vietnam was Asia's third-largest oil producer, with crude oil production averaging 403,300 barrels per day.

Vietnam's rubber sector has been growing at about 15% a year with an output of 300,000 tons of dried latex. Plans are to invest about $100 million in the period 2001 to 2010 in building/expanding 11 latex plants. Construction has been one of the driving forces of economy, growing at 15% a year. The construction sector consists of about 3,500 companies, including 270 foreign invested enterprises.

Vietnam has a large-scale wood processing industry with a nation-wide network of some 760 state-managed wood processing units. There are also over 200 local enterprises, more than 50 joint ventures and close to 1,200 small scale production units. In the early 2000s, the market for metal-working machinery and equipment was some $45 million of which 90% was imported.

The state-dominated industrial sector, which accounts for about 45% of the country's GDP, is still marked by inefficiency and low productivity and has retarded the growth of the private sector. This is due the low level of development, characterized by obsolete plants and machinery, shortages of capital, raw materials, energy and transport, and a command-style economic system. Vietnam's assets include low wages, good skill levels, and a motivated work force.

The government owns an estimated 6,000 state-owned enterprises (SOEs): the majority of nonagricultural enterprises. Most of these SOEs reflect the inefficiencies of parastatals, including debt, obsolete equipment and practices, and poor labor. In 1997, the government organized 2,000 SOEs into 88 conglomerates, accounting for 80% of the state sector and further monopolizing the industrial sector. Foreign investment, while welcome, is hard pressed to find opportunities outside of the Vietnam government's reach. In 2003, the first auction of a state-owned enterprise (SOE) took place, which resulted in the sale of the Hai Phong Agricultural Mechanical Engineering Company for $300,000 to a private Vietnamese company. The auction was financed by the Australian government.

SCIENCE AND TECHNOLOGY

Science and technology have been one of the key weak spots in the Vietnamese economy and were targeted for significant growth during the second five-year plan (197680). Vietnam's leading learned societies are the Union of Scientific and Technical Associations (founded in 1983) and the General Association of Medicine (founded in 1955), both in Hanoi. The State Commission for Science and Technology supervises research at the universities and institutes attached to the Ministry of Higher Education; the Institute of Science organizes research at other institutions. All research institutes are attached to government ministries.

Courses in basic and applied sciences are offered at Cantho University (founded in 1966), the Hanoi University of Technology (founded in 1956), the University of Hanoi (re-founded 1956), the University of Ho Chi Minh City (founded in 1977), Ho Chi Minh City Pedagogical University of Technology (founded in 1962), and various colleges. In 1996, the Hue College of Sciences (formerly the University of Hue) had 10 departments and a large library.

In 1985, total expenditures on research and development amounted to 498 million dong. In the period 19902001, there were 274 researchers engaged in research and development per million people.

DOMESTIC TRADE

Since 1979, the government has permitted the existence of a private commercial sector, mainly in southern cities as Ho Chi Minh City and Da Nang. Most private businesses are small shops and restaurants. In 1991, private enterprise and company laws were adopted by the National Assembly. It is estimated that private businesses account for 70% of domestic trade. Consumer items, durable, and nondurable goods, are available in greater abundance.

Wholesalers in Vietnam consist of state-owned trading companies and private local wholesalers. The retail sector in Vietnam is undergoing rapid transformation, as new sales outlets and merchandising techniques have emerged. In the major urban areas, several Western-style mini-markets and privately-owned convenience stores have opened. Showrooms and service centers for electronics, appliances, and industrial goods offer wholesale and retail sales. In 1996, the Saigon Superbowl opened in Ho Chi Minh City as Vietnam's first entertainment and retail center. Outside of the largest cities, retail outlets consist of family-operated market stalls or small street-front shops. There is still a strong "gray market" of smuggled goods. A value-added tax applies to most goods and services. Advertising appears in many forms. The government has restricted the use of foreign imagery in outdoor advertising by placing limitations on foreign language, landscapes, and models.

Business hours are usually Monday through Friday between 8 am and 5 pm, with a midday break between noon and 1:00 pm. Those hours pertain to government offices as well. Commercial offices are also open on Saturdays from 8 to 11:30 am. Banks are open until 3 or 4 pm weekdays and until 11:30 am on Saturdays. Shops and restaurants are open into the evenings and on Sundays.

FOREIGN TRADE

Beginning in 1980, emphasis was placed on the development of potential export commodities such as cash crops, marine products, and handicrafts, while imports were severely limited. To promote trade expansion with Japan, Singapore, and Hong Kong, several export-import firms were set up in Ho Chi Minh City under loose official supervision. The results were favorable but the experiment aroused distrust among communist party leaders, and the freewheeling enterprises were integrated into a single firm strictly supervised by the government.

The economic reforms of the late-1980s, including currency devaluation, adoption of a flexible exchange rate system, and lifting restrictions on foreign trade, contributed to the rapid growth in exports in the early 1990s. The US lifting of economic sanctions in 1994 pushed the volume of foreign trade even further upwards. Investments in Vietnam are contributing to the development and expansion of tourism. Vietnam joined the ASEAN Free Trade Area (AFTA) in 1995, committing itself to tariff reductions among member nations. In 1999, the economy recorded its smallest trade deficit in recent memory as exports climbed 23% while imports increased only 2.1%. In 2001, a US-Vietnam Bilateral Trade Agreement (BTA) was concluded, which, by 2004, had resulted in a fourfold increase in bilateral trade between the two countries. Since 2001, the government has moved toward economic liberalization and international integration in order to modernize the economy and produce more competitive, exportdriven industries.

Import commodities include petroleum and steel products, motor vehicles and tractors, tires, foodstuffs, raw cotton, sugar, and grain. The most important export commodities for Vietnam are crude petroleum, footwear, and apparel. Other exports include rice, shellfish, and coffee.

In 2004, Vietnam's major exports, in percentage terms, were: crude oil (22.1% of total exports); textiles and garments (17.1%); and footwear (10.5%). Primary imports included: machinery and equipment (17.5% of total imports); refined petroleum (11.5%); and steel (8.3%). Vietnam's leading markets in 2004 were: the United States (20.3% of total exports); Japan (13.7%); China (8.5%); and Australia (7%). The leading suppliers were: China (14.1% of total imports); South Korea (11.9%); Japan (11.3%); and Singapore (11.2%).

Country Exports Imports Balance
World 16,706.1 19,745.5 -3,039.4
United States 2,453.2 458.6 1,994.6
Japan 2,437.0 2,504.6 -67.6
China 1,518.3 2,158.8 -640.5
Australia 1,328.4 286.3 1,042.1
Singapore 961.1 2,533.5 -1,572.4
Other Asia nes 817.7 2,525.3 -1,707.6
United Kingdom 571.6 166.5 405.1
Korea, Republic of 468.7 2,279.6 -1,810.9
Iraq 439.9 439.9
France-Monaco 439.4 299.2 140.2
() data not available or not significant.
Current Account -604.0
     Balance on goods -1,054.0
         Imports -17,760.0
         Exports 16,706.0
     Balance on services -750.0
     Balance on income -721.0
     Current transfers 1,921.0
Capital Account
Financial Account 2,090.0
     Direct investment abroad
     Direct investment in Vietnam 1,400.0
     Portfolio investment assets
     Portfolio investment liabilities
     Financial derivatives
     Other investment assets 624.0
     Other investment liabilities 66.0
Net Errors and Omissions -1,038.0
Reserves and Related Items -448.0
() data not available or not significant.

BALANCE OF PAYMENTS

A traditional merchandise trade deficit is partially offset by an inflow of foreign money. This inflow, however, has made the Vietnamese currency overvalued (some argue by as much as 2030%) and was seen to be hurting exports by driving up the cost of goods. The 1998 financial crisis reflected the culmination of this overvaluation, which was remedied by 1999 with low import levels, and smaller investment figures. Vietnam is the world's second-largest rice exporter after Thailand, exporting 5.2 million tons of rice in 2005. In recent years, Vietnam has received an increase in foreign loans, aid, and direct investment. Vietnam's foreign debt stood at $19.17 billion in 2005.

In 2004, the value of merchandise exports increased by some 27% to $25.6 billion. However, merchandise imports increased to $31.1 billion, up from $24.9 billion in 2003, resulting in a merchandise trade deficit of $5.5 billion in 2004, compared with $4.7 billion in 2003 and $2.5 billion in 2002. The current-account balance averaged -1.6% of GDP over the 200105 period.

BANKING AND SECURITIES

The State Bank of Vietnam, created in 1951, was the central bank of issue for the DRV, with numerous branches throughout the territory and an extensive agricultural and industrial loan service; in 1976, it became the central bank of the SRV. Foreign exchange is regulated by the Foreign Trade Bank. The Bank for Agricultural Development provides loans to the agricultural and fishing sectors.

Financial chaos became a constant threat during the final years of the RVN. The National Bank of Vietnam (NBV), established in 1954, was the sole authority for issuing notes, controlling credit, and supervising the formation of new banks and changes in banking establishments.

In early May 1975, shortly after the fall of Saigon, the new revolutionary regime announced the temporary closure of all banks in the south, although the RVN piaster continued to circulate as the only legal tender. Two months later, the National Bank of Vietnam was reopened under new management. Stringent regulations were announced to control inflation and limit currency accumulation. All private Vietnamese and foreign banks were closed in 1976. By then, the Hanoi regime had ordered a complete withdrawal from circulation of the RVN currency and its replacement by the dong, in use in the north.

Since the banking reorganization of July 1988, but particularly since 1992, Vietnam has moved to a diversified system in which state-owned joint-stock, joint-venture, and foreign banks provide services to a broader customer base. The first foreign representative bank office arrived in 1989. In 1992, foreign banks were granted permission to open full commercial branches. The government set up the Bank for the Poor in 1995, and gave it the task of lending to "the poor living in underprivileged areas." As of December 1998, in addition to four state-owned commercial banks, there were numerous joint-stock banks, foreign bank branches, joint-venture banks and foreign banks with representative offices. Foreign banks only recognize three of the joint-stock banks as viable partners, however.

The state banks still dominate the system, state enterprises are still the main borrowers, and their lending is still predominantly short-term because of the skewed interest rate structure. These banks are the Bank of Foreign Trade (Vietcombank), the Vietnam Industrial and Commercial Bank (Incombank), the Vietnam Bank for Agriculture and Rural Development (BARD), and the Vietnam Bank for Investment and Development (BIDV).

Two banking decrees, issued in October 1990 and governing respectively commercial banks, credit cooperatives and other financial institutions, and the State Bank, aimed to regulate the financial system more strictly. Credit cooperatives had to be licensed by the State Bank rather than by local People's Committees. The first decree also gave the state commercial banks greater autonomy, and permitted them to compete with each other and to seek capital from sources other than the state. The second decree introduced new instruments through which the State Bank could control the banking sector, including open-market operations and varying reserve requirements and discount rates.

Despite these changes, the banking system is in poor health. Public confidence in the system remains low. Only 4% of all potential holders of accounts have actually opened one. There were only 10,000 bank accounts in the entire country of 80 million people in 2002. As of 2002, the Vietnam banking system had gained little international confidence, although international audit standards are beginning to be implemented. Loan fraud investigations and low loan liquidity have brought bank finances under scrutiny. The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $7.6 billion. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $17.1 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 4.8%.

In July of 2000, the Vietnam Stock Exchange opened its doors for the first time.

INSURANCE

Before May 1975, life and property insurance coverage was available in the RVN from three small Vietnamese insurance companies and through local representatives of about 70 French, UK, and US insurance firms. By the end of 1975, all private insurance facilities had ceased to operate, and the Vietnam Insurance Co., established in the DRV in 1965, had become the nation's lone insurance firm. In 1981, the main types of insurance offered were motor vehicle, personal accident, hull and cargo, offshore exploration, aviation, and third-party risk. In Vietnam, third-party automobile insurance and employers' liability are compulsory.

In 1997, other insurance companies operating in Vietnam were Hochiminh Insurance Co., Nha Rong Joint-Stock Insurance Co., Petrolimex Joint-Stock Insurance Co., Petrovietnam Insurance Co. (PVIC), Vietnam National Reinsurance Co., and the Yasuda Fire and Marine Insurance Co. As of 2002, foreign insurers were allowed in Vietnam, thus opening up the market. In 2003, the value of all direct insurance premiums written totaled $550 million, of which life insurance premiums accounted for $331 million. In 2001, Bao Viet was the country's leading nonlife and life insurer, with gross written nonlife premiums of $75.5 million and gross written life insurance premiums of $102.4 million.

PUBLIC FINANCE

The main sources of monetary revenue are income taxes, the sale of SOE's, and customs taxes. Annual deficits are financed by foreign aid. Monetary policy reforms enacted since 1988 helped end the hyperinflationary spiral of the 1980s. Aid from the former Soviet Union, formerly Vietnam's most prominent donor, was greatly reduced after the dissolution of the USSR in 1991. Foreign investment peaked in 1995 after the United States declared an end to

Revenue and Grants 102,223 100.0%
     Tax revenue 81,363 79.6%
     Social contributions
     Grants 5,300 5.2%
     Other revenue 15,560 15.2%
Expenditures 117,180 100.0%
     General public services 76,515 65.3%
     Defense
     Public order and safety
     Economic affairs 8,210 7.0%
     Environmental protection
     Housing and community amenities
     Health 4,175 3.6%
     Recreational, culture, and religion
     Education 16,030 13.7%
     Social protection 12,250 10.5%
() data not available or not significant. f = forecasted or projected data.

economic sanctions, but quickly receded thereafter. Implementation of a VAT in 2000 was expected to increase revenue.

The US Central Intelligence Agency (CIA) estimated that in 2005 Vietnam's central government took in revenues of approximately $11.6 billion and had expenditures of $12.9 billion. Revenues minus expenditures totaled approximately -$1.3 billion. Public debt in 2005 amounted to 75.5% of GDP. Total external debt was $19.17 billion.

The International Monetary Fund (IMF) reported that in 2001, the most recent year for which it had data, budgetary central government revenues were d102,223 billion and expenditures were d117,180 billion. The value of revenues was us$7 million and expenditures us$8 million, based on a market exchange rate for 2001 of us$1 = d14,725 as reported by the IMF. Government outlays by function were as follows: general public services, 65.3%; economic affairs, 7.0%; health, 3.6%; education, 13.7%; and social protection, 10.5%.

TAXATION

Individual income is subject to a progressive tax ranging from 040%. Individuals realizing capital gains from the right to use land or the transfer of a house are subject to a progressive tax with a top rate of 60%.

The main corporate tax rate is 28%. In addition, companies deriving income from land use rights are subject to a surtax from ranging from 1025%. Capital gains incurred by companies by the sale of fixed assets are taxed at the corporate rate. Gains stemming from the sale of shares in a foreign-invested company are taxed at a 25% rate. There is no tax on dividends, although income from interest and/or royalties are each subject to a 10% withholding rate.

Other taxes include capital transfer taxes, land and housing taxes, a natural resources tax, technology transfer fees, import and export duties. There are also special consumption taxes applied to tobacco products, spirits, beer, and other items ranging and which range from 15100%. Vietnam also imposes a value-added tax (VAT) with a standard rate of 10% and which covers all goods and services. Exports however are exempt.

CUSTOMS AND DUTIES

All imports must be authorized by one of the state trading corporations. Customs duty is generally charged on imports and exports, with many exemptions and duty reductions available (including imports related to an aid program and goods to be used for security, national defense, scientific and educational training, or research purposes). Tariff rates are divided into three categories according to the import source country's trade relationship with Vietnam: ordinary rates apply to goods imported from countries that have not exchanged normal trade relations (NTR) agreements with Vietnam; preferential rates apply to goods from countries that have exchanged NTRs with Vietnam; and special preferential rates apply to goods from countries that have made special trade arrangements with Vietnam. Ordinary tariff rates are about 50% higher than preferential rates. Special preferential rates vary by country. There are also special consumption taxes (mostly on luxury goods) of up to 100%, a value-added tax (VAT) of 0%, 5%, 10% and 20%, and import quotas.

In 1994, the United States lifted its trade embargo on Vietnam and in 1995 the two countries established formal relations. Vietnam is a member of ASEAN and its free trade area (AFTA).

FOREIGN INVESTMENT

France was the dominant foreign investor in Indochina before World War II. Resident Chinese, however, played a major role in rice milling, retailing, and other activities (and continued to do so in the south through the early 1970s). Following the 1954 partition agreement, the French economic position in the DRV was completely liquidated, and the participation of private foreign investors in the DRV economy was prohibited. The RVN government encouraged the introduction of private capital. In March 1957, a presidential declaration provided guarantees against nationalization and expropriation without due compensation, temporary exemption from various taxes, and remittance of profits within existing regulations. Despite these efforts, because of wartime conditions, relatively little new private foreign investment was attracted to the country, apart from a few ventures by US and Japanese interests. In 1977, the SRV issued a new investment code in an effort to attract private foreign capital to help develop the country. However, because of stringent regulations and a climate of government suspicion of private enterprise, the 1977 code attracted little enthusiasm among potential investors. Only the USSR and France made sizable investments, although Japan subsequently laid the foundation for future investment by bank loans. Beginning in 1984, the regime began to encourage the formation of joint ventures and announced that preparations were under way for a new foreign investment code.

In 1987 the National Assembly passed a liberalized investment law seeking to improve the overall investment climate and emphasize the development of export industries and services. The Vietnamese investment laws were much more liberal than those of other countries in Southeast Asia. The code permitted wholly owned foreign enterprises in Vietnam, levied low taxes on profits, allowed full repatriation of profits after taxes, and guaranteed foreign enterprises against government appropriation. The law also encouraged oil exploration. Factors hindering performance of foreign investors are bureaucracy, lack of management expertise, smuggling and corruption, and an underlying distrust and uncertainty on the part of officialdom.

In early 1994 the government announced three proposals intended to improve the investment environment and increase foreign trade: expedited decisions on small investment projects; the elimination of the requirement for import-export licenses for many commodities; and reduced list of industries that would be off limits to foreign investors. Foreign investments were allowed in insurance companies and brokerages, and reinsurance between companies. Under amendments to the Foreign Investment Law in 1996 more authority over investment licensing was given to local governments.

Total foreign direct investment (FDI) approvals from 1988 to June 2002 amounted to $38.58 billion, but the total disbursed was a little over $20 billion, about 52% of approved FDI. Since the 1994 reduction of restrictions, however, actual inflows of FDI have averaged about 70% of the approvals. After the Asian financial crisis, the level of inflow decreased by about $900 million a year. From 1998 to 2000, the annual average inflow was $1.7 billion. The main cause of the decline was reduced investments from other Southeast Asian countries. As of 2003, it was estimated that FDI projects produced 13% of the country's GDP, including 36% of industrial production. As of 1999, Singapore was the largest foreign investor with $5.9 billion of total investments approved by the Vietnam government between 1988 and 1999 (only $2 billion actualized). Other major investors included Taiwan, Hong Kong, Japan, South Korea, France, the British Virgin Islands, Russia, the United States, and the United Kingdom. The Vietnamese government controls both upstream and downstream oil and gas industries, but since 1998 foreign investment has been permitted. In 2001, the consortium that included Conoco, the Korean National Oil Company (KNOC), SK Corporation of South Korea, and Geopetrol of France made a major find of oil in the Cuu Long Basin. In 2002, the Japan Vietnam Petroleum Comany (JVPC) made its first sizeable discoveries. JVPC is the operator in the joint venture. and holds a 46.5% share.

Vietnam's encouragement of foreign investment includes its ability to attract and utilize large amounts of foreign capital, both in the form of FDI and ODA (official development assistance). As of 2006, Vietnam did not allow significant foreign portfolio investment. For the 200105 period, the government set targets for FDI at $11 billion in disbursements from existing and newly licensed foreign investments and for approximately $10 to $11 billion in ODA disbursed by foreign donors for a total of $21 to $22 billion from foreign sources. These levels of FDI and ODA were designed to maintain a GDP growth rate of 7.5% per year. By December 2004, Vietnam had attracted nearly $46 billion in investment commitments since the country was opened to foreign investment in 1988, 58% of which had been disbursed.

Vietnam's primary investors in 2004, in terms of licensed capital, were, in order: Taiwan, South Korea, Japan, Hong Kong, the British Virgin Islands, Canada, Singapore, Malaysia, China, and the United States.

There is little information on Vietnam's direct investment abroad, but according to the government, as of the end of 2004 Vietnam had invested in 113 projects worth about $226 million in Russia, Singapore, Laos, Japan, Hong Kong, Cambodia, Tajikistan, the Middle East, the United States, Uzbekistan, and Taiwan.

ECONOMIC DEVELOPMENT

With the defeat of the RVN forces in April 1975, Vietnam faced the task of restoring its infrastructure, damaged by the war, while working toward the goal of a technologically advanced society. Long-range planning centered on the second five-year plan (197680), which called for major emphasis on heavy industry and rapid agricultural growth. Due to factors including unfavorable weather, decreased foreign aid, and high military expenditurescombined with managerial inefficiencythe plan was a disaster. Industrial production grew by only 0.6% and agriculture by 1.9%. The third five-year plan (198185) was more modest in its objectives. Emphasis was placed on agricultural development and the promotion of consumer goods, with industrial development in the background. Socialist transformation remained a high priority, although a less rapid rate of change was expected than during the previous five years. Although the goals of the new plan were more realistic than those set for its predecessor, its success was limited. Growth figures in industry (9.5%) and agriculture (4.9%) improved significantly over the previous five years. Production remained spotty in key areas, however, and problems of mismanagementprimarily by the state sectorproliferated.

The fourth five-year plan (198690) continued the previous plan's emphasis on agricultural growth and expansion of exports and light industry. Efforts to promote Socialist transformation were to continue, but at a gradual pace and "by appropriate forms." Development aid continued to come primarily from the former USSR and other CMEA countries. In 1978, the SRV became fully integrated into the CMEA planning and development structure, and its five-year plans were coordinated with those of its CMEA partners. Planned Soviet outlays for the 198690 period totaled some $1113 billion. This aid and trade waned with the decline of the USSR, with the full cutoff occurring in 1991. The SRV's new economic emphasis, doi moi (renovation) was instituted by Nguyen Van Linh following the sixth national party congress (1986). His plan included policy and structural reforms for a market-based economic system: price decontrol (liberalized prices), currency devaluation, private sector expansion through decollectivization of agriculture (food production), legal recognition of private business, new foreign investment laws, autonomy of state enterprises, business accounting methods, devolution of government decision-making in industry to enterprise level, and limiting government participation to macroeconomic issues. Implementation of these policies was achieved with varied success.

Inflation policy and agricultural reform resulted in immediate increases in rice production. Vietnam changed from a net importer of rice to the third major rice exporter after Thailand and the United States. It was the second-largest world rice exporter in 2005.

Industry has replaced agriculture as the main engine of the economy, and by 2005 accounted for 40.9% of GDP. Agriculture remains important, however, accounting for about 21% of GDP and about 65% of the labor force. A privatization program in the early 1990s met with resistance from conservative politicians, companies, and from foreign investors. Conservatives feared that privatization undermined the economic basis of socialism, and foreign investors were wary of poor investments with meager legal underpinnings. Opposition from managers who would lose a "free hand," and employees whose jobs might be replaced by new equipment also arose. In 1994 the director and deputy director of the textile company that was the flagship for this privatization program were dismissed for alleged corruption.

US president Bill Clinton's lifting of the 30-year-old trade embargo in 1994 opened the way for waiting American companies to do business in Vietnam. International assistance during the mid-1990s was from the World Bank for education and agricultural reforms, the Japan Overseas Economic Cooperation Fund for infrastructure programs, the United Kingdom for soft loans, technical training and refugee resettlement, and from the Asian Development Bank. A continuation of reforms promoting foreign investment and minimizing the state's role in the economy moved slowly in the late 1990s due to political corruption and inefficiencies.

The Asian financial crisis negatively affected investor confidence in the region, severely reducing Vietnam's main focus of economic development. A complete overhaul of the financial regulatory system is still necessary in order to stimulate the economy. Vietnam's increasing integration in regional and international economic organization should impel more competitive production methods. At the end of 2001, Vietnam concluded a bilateral trade agreement with the United States, and it is on the path toward accession to the World Trade Organization.

Vietnam by 2006 had largely overcome the negative effects of the Asian financial crisis, with GDP growth ticking along at 7.4% over the 200105 period, despite the global economic slowdown of 200103. Vietnam must work to promote job creation to keep up with the country's high population growth rate. The government has made progress in reducing poverty: as of 1993, the World Bank declared 58% of the population to be poor, and by 2002, that had fallen to 29%. Nevertheless, the poor remain concentrated in remote, rural districts populated mainly by ethnic minorities, which are areas least touched by the government's reform program. Cities are growing faster than the countryside. Other economic challenges remain, in terms of strengthening the financial sector and the legal framework and reforming state-owned enterprises. Diseases like SARS (severe acute respiratory syndrome) and avian flu, had not made a severe dent in the economy by 2005. Small businesses are booming: by the end of 2002, more than 50,000 new companies had been established. However, Vietnam has few midsized private firms between these small family firms and large exporters backed by foreign investors.

SOCIAL DEVELOPMENT

A social security plan provides old age, disability and survivorship benefits, as well as worker's injury and medical insurance. All private and public sector employees with employment contracts of at leave three months are covered. Pensions are funded by 5% of employee wages, 10% of employer payroll, and government contributions. Maternity benefits are payable at 100% of wages for 120 days, and are also available to women who adopt a newborn baby. Workers' compensation is provided according to the level of disability.

Women have full legal rights under law, but are subject to various forms of social discrimination. Few women are found in senior management or high level government positions, but business and the public sector nevertheless employ many women, and they are an important part of the economy. Women also generally receive lower wages than their male counterparts. Domestic violence against women is common, and women tend to stay in abusive marriages rather than confront the stigma of divorce.

The human rights record is poor, and there are continuing reports of arbitrary detention and the mistreatment of detainees during interrogation. In 2004, the restrictions on the Internet were increasing, with the government closely monitoring activity. Human rights organizations are not permitted to operate in Vietnam.

HEALTH

Wars in Vietnam since 1946 have undermined much of the progress made by the DRV, RVN, and SRV in the health field. Damage to urban hospitals in the north was especially severe. A 1976 World Health Organization report indicated the dimensions of that destruction: 24 research institutes and specialized hospitals, 28 provincial hospitals, 94 district hospitals, and 533 community health centers; all destroyed mainly as the result of US bombing. Three decades of intermittent war has also had a devastating effect on health conditions in the south.

The incidence of tuberculosis, which had been largely controlled rose again in the late 1990s. Commonly reported diseases in Vietnam were diarrheal disease, malaria, and tuberculosis. Venereal and paravenereal diseases were said to have affl icted one million persons in the south (about 5% of the total population) and, WHO claimed, 80% of RVN soldiers. Opiate addiction affected about 500,000 persons. The HIV/AIDS prevalence was 0.40 per 100 adults in 2003. As of 2004, there were approximately 220,000 people living with HIV/AIDS in the country. There were an estimated 9,000 deaths from AIDS in 2003.

During the early 1980s, foreign visitors routinely reported observing severe cases of malnutrition and shortages of medical equipment and supplies. While conditions have generally improved as agricultural production has increased, most Vietnamese continue to live at the minimum level of subsistence. In February of 1996, Vietnam was considering fortification of foods with iron and vitamin A. In 1995, the Vietnamese government issued the National Plan of Action for Nutrition (19952000), which aimed to eliminate food insecurity, reduce malnutrition, and reduce micronutrient deficiencies. About 39% of all children under 5 were classified as malnourished in 2000.

Vietnam reported life expectancy in 2005 to be 70.61 years and infant mortality to be 25.95 per 1,000 live births. Maternal mortality was 160 per 100,000 live births. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 20.9 and 6.1 per 1,000 people. Immunization rates for children up to one year old were tuberculosis, 96%; diphtheria, pertussis, and tetanus, 95%; polio, 95%; and measles, 96%.

Family planning services were provided to 2,157,000 people in 1992. An estimated 75% of married women (ages 15 to 49) were using contraception in 2003. Abortion is available on request. Vietnam's fertility rate in 2000 was 2.2, down nearly 2% from the previous 5-year period.

In 2004, the country had an estimated 53 physicians, 56 nurses, and 18 midwives per 100,000 people. About 97% of the population had access to health care services. Approximately 56% of the population had access to safe drinking water and 73% had adequate sanitation. Total health care expenditure was estimated at 4.8% of GDP.

HOUSING

Housing is a serious problem in Vietnam, particularly in urban areas of the north where war damage has caused overcrowding and lack of resources has hampered efforts to resolve the problem. By 1986, housing had become a critical problem in Hanoi, particularly in the central sections of the city, where per capita living space was reduced to four sq m. Large flats are gradually being erected in the suburbs to ease the problem. In the meantime, many families live in temporary quarters built directly on the sidewalk or attached to other buildings. Housing is less a problem in the countryside, where many farm families have begun to take advantage of a rising standard of living to build new houses of brick and stone. Similarly, in the south, housing is available to meet the requirements of the population because building construction had continued at a relatively high level during the war years.

At the 1999 census, about 12.8% of the housing stock were permanent houses, 50.4% were semipermanent, 14.1% were built with a durable wood frame, and 22.7% were temporary houses. The average living area per household (excluding temporary housing) was 47.9 sq m; the average living space per person was 10.4 sq m. About 13% of all households had clean tap water, 10.1% used rain water as a main water source, and 54.9% used some type of filter system or hygienic well. Only 16.4% of all households used a flush toilet. About 77.8% of all households used electricity.

EDUCATION

After 1975, the educational system in the south was restructured to conform to the Socialist guidelines that had been used in the DRV. The 12-year school cycle was reduced to 10 years, and the more than 20,000 teachers in the south were among those subjected to "reeducation." By 1976, some 1,400 tons of textbooks printed in the DRV had been shipped to the south, and the books used previously under the RVN were destroyed. In addition, more than 1,000 formerly private schools in the south were brought under state control.

Education is free at all levels, and five years of primary education is compulsory. Seven years of secondary school is offered through two cycles of four plus three years. Students progress to the upper level only through completion of an entrance examination. Vocational studies are also offered at the upper secondary level. The academic year runs from September to June.

In 2001, about 43% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2001 was estimated at about 95% of age-eligible students. The same year, secondary school enrollment was about 62% of age-eligible students. It is estimated that about 95.5% of all students complete their primary education. The student-toteacher ratio for primary school was at about 25:1 in 2003; the ratio for secondary school was about 26:1.

There are about 90 colleges and three universities in the SRV. The major university is in Hanoi. In 2003, it was estimated that about 10% of the tertiary age population were enrolled in tertiary education programs. The adult literacy rate for 2004 was estimated at about 90.3%, with 93.9% for men and 86.9% for women.

As of 1999, public expenditure on education was estimated at 2.8% of GDP.

LIBRARIES AND MUSEUMS

The École Française d'Extrême-Orient once maintained an extensive research library in Hanoi, which was transferred intact to the DRV; it is now the National Library, housing about one million volumes. The bulk of the present collection has been added since 1954 and includes a substantial number of Russian titles. The General Scientific Library in Ho Chi Minh City (formerly the National Library) maintains a collection of over 800,000 volumes. Vietnam National University at Hanoi Library holds 1.4 million volumes.

The collections of the Musée Louis-Finot, an archaeological and cultural museum established by the French in Hanoi, were transferred intact to the DRV. These collections, now part of the Historical Museum, contain artifacts and related material from archaeological discoveries in Thanh Hoa and Yen Bay, including a 2,500-year-old burial boat and an excellent array of bronze implements. Hanoi's National Art Gallery includes a folk-art collection and Vietnamese Bronze Age artifacts. Notable also is the Museum of the Revolution, grouping memorabilia of Vietnam's struggle for independence from the French since the early 1900s. The Army Museum, housed in the Hanoi Citadel, contains a collection of weapons and documents concerning the Indochina war. The Vietnamese Fine Arts Museum (1966) houses exhibits on the decorative and applied arts, and folk and modern art. The architecture of religious edifices and former Vietnamese imperial structures reflect the country's cultural heritage. The Ho Chi Minh City Museum, founded in 1977, has a section devoted to the revolution and another to ancient arts.

MEDIA

Vietnam's postal, telegraph, and telephone services are under the Ministry of Communications. The country made significant progress in upgrading its telecommunications system in the 1990s: all provincial switchboards have been digitized and fiberoptic and microwave transmission systems have been extended from the major cities to the provinces. However Vietnam still lags behind its Southeast Asian neighbors. In 2003, there were an estimated 54 mainline telephones for every 1,000 people. The same year, there were approximately 34 mobile phones in use for every 1,000 people.

Hanoi has a strong central broadcasting station, the Voice of Vietnam, boosted by local relay transmitters. Since 1975, almost the entire country has been blanketed by a wired loudspeaker system. Radio programs beamed abroad include broadcasts in Chinese, English, French, Japanese, Spanish, Thai, Bahasa Indonesia, Russian, Khmer, and Lao, and there are special broadcasts to mountain tribes. Television was introduced into the RVN in 1966, and an extensive service, reaching some 80% of the population, was in operation by the early 1970s. A pilot television station was inaugurated in the DRV in 1971. Many of the major cities now have television stations, all under the guidance of the Ministry of Information, which replaced the State Committee for Radio and Television in 1987. As of 1999, there were 65 AM and 7 FM radio stations. In 1998, there were seven television stations. In 2003, there were an estimated 109 radios and 197 television sets for every 1,000 people. The same year, there were 9.8 personal computers for every 1,000 people and 43 of every 1,000 people had access to the Internet. There were 10 secure Internet servers in the country in 2004.

Most newspapers in the south were shut down by the PRG in 1975, but some papers that had been sympathetic to the NLF/DRV cause were allowed to continue publication. All press is strictly controlled by the Ministry of Culture and Information. Principal Vietnamese dailies (with their affiliation and estimated 2002 circulation) are: Nhan Dan (Communist Party, 200,000), Quan Doi Nhan Dan (army, 60,000), Hanoi Moi (Communist Party, 35,000), and Saigon Giai Phong (Communist Party, 100,000). The Englishlanguage Saigon Times was established in 1995.

Even though the constitution provides for freedom of speech and of the press, the government places major restrictions and regulations on all media and prison time for violators is not uncommon.

ORGANIZATIONS

The principal mass organization is the Fatherland Front, which merged in January 1977 with the National Liberation Front and with the Vietnam Alliance of National, Democratic, and Peace Forces. The Fatherland Front draws up single slates of candidates in all elections and seeks to implement the political, economic, and social policies of the Communist Party.

Other organizations that form part of the Fatherland Front are the Peasant Union, with some five million members; the Ho Chi Minh Communist Youth Union, with four million members; and the Vietnamese Women's Union, with 11.4 million members. Industrial and commercial enterprises are represented by the Chamber of Commerce of the SRV in Hanoi.

There are some professional organizations that also serve to promote education and research in specific fields, such as the Chemical Society of Vietnam and the Vietnam Medical Association. There are several charitable organizations, primarily those representing aid from other countries or other major international organizations, such as the Red Cross and Habitat for Humanity.

TOURISM, TRAVEL, AND RECREATION

Vietnam possesses a number of historic and scenic areas of interest to tourists. In the north, the beauty of Ha Long Bay, with its countless grottoes and rock spits jutting vertically into the sea, is well known. Hanoi itself, with its historical monuments, its lakes and pagodas, and its extensive French colonial architecture, is extremely picturesque. Hotel facilities are improving in the larger areas and in some resorts.

In 1986 and 1987, the government made plans to expand international and domestic airline service, double hotel capacity in the major cities, simplify the complicated visa restrictions, and grant shore leave passes to passengers on cruise ships stopping at Vietnamese ports. As a result of these measures, tourism grew rapidly. From 20,000 tourists in 1986, visitor arrivals rose to 450,000 in 1992 and 1,715,637 in 1997. In 2000, about 2,140,000 foreign visitors arrived in Vietnam. That year there were 66,700 hotel rooms with 120,800 beds and an occupancy rate of 50%. All visitors need visas and must register with the government within 48 hours of arrival.

In 2005, the US Department of State estimated the cost of staying in Ho Chi Minh City at $182 per day. Travel costs in Hanoi were estimated at $176 per day.

FAMOUS VIETNAMESE

Important figures in Vietnamese history include the sisters Trung Trac and Trung Nhi, national heroines who led a revolt (ad 4043) against China when that nation was imperial master of Tonkin and North Annam; Ngo Quyen, who regained Vietnamese independence from China in 938; Tran Hung Dao, who defeated the forces of Kublai Khan in 1288; Emperor Le Loi, national hero and brilliant administrator, in whose reign the Vietnamese legal code was promulgated in 1407; Emperor Gia Long (d.1820), who reunified Vietnam in the early 19th century; and Le Van Duyet (17631832), a military leader who helped the emperor to unify the country.

Phan Boi Chau (18751940) was Vietnam's first modern nationalist and, like China's Sun Yat-sen, is claimed by Vietnamese Communists and nationalists alike as their spiritual leader. Ho Chi Minh ("The Enlightener"), born Nguyen That Thanh (18901969), was a man of many other pseudonyms. Ho Chi Minh (18901969) was a founding member of the French Communist Party in 1920 and founded the Vietnamese Communist Party in 1930. Often referred to as "Uncle Ho," he was president of the DRV from 1945 until his death. General Vo Nguyen Giap (191275), a professor of history turned strategist, organized the first anti-French guerrilla groups in 1944, led the Viet-Minh in its eight-year struggle against France, and defeated the French at Dien Bien Phu; subsequently he served as minister of defense, commander in chief of the army, and vice-premier of the DRV. Truong Chinh ("Long March," 190688), the DRV's foremost Communist thinker, was secretary-general of the Vietnamese Communist Party from 1940 until 1956, when he was purged from his post for having mismanaged the land reform; exonerated shortly thereafter, he was president of the Council of State (198187). Pham Von Dong (19082000), a member of the nobility, joined the Vietnamese revolutionary movement at its inception and became minister of foreign affairs in 1954, premier of the DRV in 1955, and premier of the SRV in 1976; he resigned in 1987. Le Duan (190786), first secretary of the Communist Party, presided over Vietnam's reunification and the formation of the SRV. Le Duc Tho (191190), a member of the Communist Party Politburo but with no post in the government, was the DRV's chief negotiator in talks that led to the 1973 Paris Peace Agreement; for his role, Le shared with US Secretary of State Henry Kissinger the 1973 Nobel Peace Prize.

Prominent political figures in the formation of the RVN included Bao Dai (Nguyen Vinh Thuy; b.France, 191397), who had served as nominal emperor of Annam under the Japanese and had attempted to form a unified national government after the war, and Ngo Dinh Diem (190163), who served as president of the RVN from its founding on 26 October 1955 until his overthrow and death in November 1963. Nguyen Cao Ky (b.1930), an RVN air force commander, took control of the government in the coup of June 1965. General Nguyen Van Thieu (19232001) was elected president of the RVN in the elections of September 1967 (with Ky as his vice presidential running mate), an office he retained until the RVN's defeat in 1975. Both Thieu and Ky left the country in 1975, Thieu taking up residence in Taiwan and Ky in the United States. The new leadership in the south, following the 1975 NLF victory, was headed by Pham Hung (191288), chairman of the southern wing of the Communist Party since 1967; Huynh Thanh Phat (191389), the PRG premier, who later became a member of the Council of State; and Nguyen Thi Binh (b.1927), the PRG's foreign affairs minister who had headed the NLF delegation at the Paris talks and who also became a Council of State Member. Pham Hung became premier of the SRV in 1987, and Vo Chi Cong (b.1913?) became president of the Council of State. Nguyen Van Linh (191598) became general secretary of the Communist Party in December 1986.

The 13th-century writer Nguyen Si Co is regarded as one of the first truly Vietnamese authors; he is best known for his collection titled Chieu Quan Cong Ho. Other leading literary figures are two 15th-century poets, Ho Huyen Qui and Nguyen Binh Khien; the latter's collection, Bach Van Thi Tap, is a classic of Vietnamese literature. Nguyen Du (17651820) wrote a famous novel in verse, Kim Van Kieu. Hoang Ngoc Phach, who wrote the romantic novel To Tam (1925), is credited with the introduction of Western literary standards into Vietnamese literature. Duong Thu Huong (b.1947) is a contemporary Vietnamese author and political dissident; her first two books were published in Vietnam, but subsequent novels were only published abroad.

DEPENDENCIES

Vietnam has no territories or colonies.

BIBLIOGRAPHY

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