Economy
Vietnam is one of Asia's poorest nations. Several factors have hindered economic development, including long periods of war, a high unemployment rate, and a shortage of trained technical and administrative workers.
During the colonial period (the late 1850's to the late 1940's) the south of Vietnam was primarily agricultural, and industry developed mainly in the north. During 1954–75, when the country was divided, the north and the south were deprived of vital economic ties with each other. Also, each had a different economic system—the north's was communist, the south's was based on private enterprise. After reunification, the north tried to integrate the two economies into a unified socialist system. This effort was largely unsuccessful. During the late 1980's and early 1990's the government began to introduce principles of private enterprise into the national economy. Industrial exports, especially of textiles, ballooned following the reestablishment of trade agreements with other countries.
About 65 per cent of Vietnam's workers are engaged in farming. Individual farms are small, and subsistence farming—that is, farming chiefly for family consumption—is predominant. Commercial farming, however, is of growing importance. Generally, modern farming methods and equipment are not used.
Only about one-fifth of Vietnam's land is under cultivation. Of this, most is devoted to rice. The major rice areas correspond closely to the most densely settled parts of the country, namely the Mekong and Red River deltas and the Coastal Plain. Two and even three rice crops per year are grown in some parts of the country.
A number of other crops are grown, principally for consumption within Vietnam. Cassava and sweet potatoes are produced in large amounts and are staple foods throughout the country. Sugarcane and rubber are produced around Ho Chi Minh City and on the Coastal Plain. In the highlands, tea, coffee, tobacco, and fiber crops are grown. Almost every farm has a small garden where vegetables for the family are grown, and there are usually a few fruit trees around each house.
Livestock is raised throughout Vietnam. Pigs and poultry, mainly chickens and ducks, are most numerous. Water buffalo are kept mainly as work animals.
Most of the known mineral resources are in the north. Good-quality anthracite (hard coal), mined near Hanoi and Haiphong, is used locally to generate electric power. Petroleum, located mainly in fields off the southeastern coast has become the biggest export. Salt, phosphate rock, tin, and chromium are mined in economically significant amounts. Clay, used for making brick and tile, is widely produced.
By the time of partition in 1954, manufacturing was fairly well established in the north around Hanoi and Haiphong. Development of heavy and medium industry became a prime concern of the North Vietnamese government, which took control of nearly all factories. A large iron and steel complex at Thai Nguyen, built with aid from other Communist countries, is of major importance. Numerous other factories and machine shops turn out needed items such as farm machinery, tools, and electrical equipment. Others produce textiles, glass, chemicals, and tires. Rice mills and other food-processing plants are located in most of the smaller cities.
The south has only a small amount of manufacturing, most of it in or near Ho Chi Minh City. Most plants are devoted either to food processing or to the production of consumer goods. Rice milling and sugar refining are the main food-processing activities; there are also dozens of small businesses engaged in the processing of fruit, vegetables, and fish. Textile mills produce cotton, wool, and synthetic fabrics, and bagging for the rice and sugar industries. Several paper mills, chemical plants, and bicycle assembly plants serve local markets and help to lighten dependence on imports.
Although severely damaged by defoliants during the Vietnamese War, Vietnam's forests furnish material for the paper, construction, and furniture industries. Substantial amounts of firewood are also cut, and mangrove trees on the delta coasts are used for charcoal.
Fish—either fresh, dried, or made into the popular sauce called nuoc mam—is an important part of the Vietnamese diet. Fishing is carried on in coastal and inland waters, including canals and flooded fields.
Many of the transport facilities were severely disrupted by the Vietnamese War. The rail lines were especially hard hit. Roads throughout the country are fairly good, although most are unpaved.
Much freight moves in Vietnam by water, both locally over inland waterways and along the coast. Both of the delta areas have extensive networks of navigable canals and rivers. Haiphong and Ho Chi Minh City are the chief ocean ports and handle nearly all foreign trade. Air Vietnam, the national airline, operates mainly domestic routes. The chief international airport is near Hanoi.
