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Economic Growth and Social Equity in Vietnam from 1986 to Present

The 6th Party Congress introduced the term “social policy” for the first time, placing the correct position and role of social policy: “social policy covers all aspects of human life; working and living conditions, education and culture, family relations, class relations, ethnic relations”.

However, it was not until 1991, in the Platform for National Construction in the Transitional Period to Socialism , approved by the 7th Party Congress, that the issue of combining economic growth with social progress and equity was placed in the content and direction of social policy. The Platform clearly stated: "Correct social policy for human happiness is a great driving force to promote all creative potentials of the people in the cause of building socialism."

The main direction of social policy is : promoting the human factor on the basis of ensuring fairness and equality in the rights and obligations of citizens; combining well economic growth with social progress; between material life and spiritual life; between meeting immediate needs and caring for long-term interests; between individuals and collectives and the social community. Social policy ensures and continuously improves the material life of all members of society in terms of food, accommodation, travel, study, rest, medical treatment, and physical improvement.

The 7th Congress document further emphasized: “The goal of social policy is consistent with the goal of economic development, aiming to promote the strength of the human factor and for the people. Harmoniously combine economic development with cultural and social development, between economic growth and social progress; between material life and spiritual life of the people. Consider economic development as the premise and basis for implementing social policies, and good implementation of social policies is the driving force for economic development”.

The 8th Congress marked a new development in theoretical awareness and practical guidance on economic growth combined with social justice, clearly expressed in 5 viewpoints for planning the social policy system.

- Economic growth must be associated with progress and social justice in every step of the development process. Social justice must be reflected in the reasonable distribution of means of production and in the distribution of production results, in the

create conditions for everyone to have the opportunity to develop and make good use of their abilities.

- Implement many forms of distribution, mainly based on labor results and economic efficiency, while distributing based on the contribution of other resources to production and business results and distributing through social welfare, along with a reasonable savings policy, ensuring the rights of workers.

- Encourage legal enrichment while actively eliminating hunger and reducing poverty. Gradually narrow the gap in development level and living standards between regions, ethnic groups and population classes.

- Promote the good traditions of "repaying gratitude", "remembering the source of water", and being kind and loyal.

- All social policy issues are resolved in the spirit of socialization. The State plays a core role, while mobilizing every citizen, business, social organization, individual and foreign organizations to participate in solving social issues.

Continuing that spirit, at the 9th Party Congress, the viewpoint of combining economic growth with social justice was clearly stated: “Our Party's economic policy is: to promote industrialization and modernization, build an independent and self-reliant economy, turn our country into an industrialized country; prioritize the development of productive forces, while building socialist-oriented production relations; highly promote internal strength, while mobilizing external resources and proactively integrating into the international economy for rapid, effective and sustainable development; economic growth goes hand in hand with cultural development, gradually improving the material and spiritual life of the people, realizing social progress and justice, protecting and improving the environment, combining socio-economic development with strengthening security and national defense”. The Congress also continued to affirm the goal: "Continue the cause of innovation, promote industrialization and modernization, for the goal of a rich people, strong country, fair, democratic, civilized society, and steadily move towards socialism."

The 10th Party Congress clearly stated the general goals and directions for the 5 years 2006 - 2010 as: " Improving the leadership capacity and fighting strength of the Party, promoting the strength of the entire nation, comprehensively promoting the renovation process, mobilizing and making good use of all resources for the industrialization and modernization of the country; developing culture; implementing social progress and equity; strengthening national defense and security, expanding foreign relations; proactively and actively integrating into the international economy; maintaining political and social stability; soon bringing our country out of underdevelopment; creating a foundation for our country to basically become a modern industrialized country by 2020. " The Congress continued to affirm: " Implementing social progress and equity in every step and every development policy. Economic growth goes hand in hand with the development of culture, health care, education... effectively solving social issues for the goal of human development. "


2.2. Economic growth and social equity in Vietnam from 1986 to present

2.2.1. Overview of economic growth

2.2.1.1. Achievements

- On economic growth rate and per capita income:

One of the outstanding achievements of the Vietnamese economy during the renovation period is the high and quite stable economic growth rate. If in the pre-renovation period from 1976 - 1985, the average annual economic growth rate was about 2%, then after the renovation, the average annual growth rate was recorded as 4.5% in the period 1986 - 1990, 8.4% in the period 1991-1997, and still reached 7.23% in the period 1998-2008 even though the economy was affected by the Asian economic crisis, SARS epidemic, natural disasters... Vietnam's economic growth rate is equal to that of Korea and second only to China.

Chart 1: Vietnam's economic growth rate during the renovation period



speed(%)



Economic growth rate (%)


10


9.5 9.3


8


6


4


6.5 6

4.6 5.1

3.4

8.6 8.1 8.8 8.2 8.8

6.7 7

5.8

4.8

7.8 8.4 8.2 8.5

7.3

6.23

2

2.7



0





1986 1987 1988 1989 1990 1991

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

2003 2004 2005 2006 2007 2008


Economic growth rate


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Economic Growth and Social Equity in Vietnam from 1986 to Present


year

Source: General Statistics Office

Vietnam's relatively high economic growth rate in recent years is due to the fact that all economic sectors have high annual growth rates.

Table 1 - Economic growth rate (GDP) from 1997 - 2007 (%)


Year

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

GDP

8.15

5.76

4.77

6.79

6.89

7.08

7.34

7.79

8.44

8.17

8.44

NLTS

4.33

3.53

5.53

4.63

2.89

4.17

3.62

4.36

4.02

3.3

3.0

Construction

12.62

8.33

7.68

10.07

10.39

9.48

10.48

10.22

10.69

10.37

10.4

DV

7.14

5.08

2.25

5.32

6.10

6.54

6.45

7.26

8.48

8.29

8.5

Source: General Statistics Office

According to the United Nations Human Development Report 2007/2008, Vietnam's GDP per capita in 2005 was 631 USD, the GDP growth rate per capita in Vietnam was about 5.9%/year in the period 1990 - 2005 [37,284]. In 2007, GDP per capita reached 835 USD. According to the Government's Report at the 4th Session of the 12th National Assembly (October - November 2008), Vietnam could reach a GDP per capita in 2008 of 1050 - 1100 USD.

Chart 2: Average economic growth rate over periods (%)


9


8

8.2

average speed

7.86

7

6.96

6

6.025

5

4.46

4


3


2


1


0

1986-1990

1991-1995

1996-2000

2001-2005

2007-Quarter I/2008


Source: General Statistics Office

- About economic structure :

In addition to the high growth rate, the structure of our country's economy in recent years has had a positive shift, with the proportion of economic sectors with increasing added value. Considering the economic structure according to three sectors (agriculture - forestry - fishery, industry - construction and services), it can be seen that the proportion of agriculture - forestry

- The share of fisheries in GDP has steadily decreased and the share of industry and services has increased accordingly.

The proportion of agriculture, forestry and fishery in GDP decreased from 38.06% in 1986 to 27.76% in 1996, 22.24% in 2003, 20.36% in 2006 and 20.30% in 2010.

2007; while the contribution rate in GDP of industry and construction increased during the period.

up, from 28.88% in 1986 to 29.73% in 1996 and 41.5% in 2006, 41.58% in 2007. Similar to industry - construction, the contribution rate in GDP of services also increased very quickly from 33.06% in 1976 to 42.51% in 1996, 37.99% in 2003, 38.08% in 2006 and 38.12% in 2007.


100%


80%


60%


40%


20%


0%

Chart 3: Proportion of industries in GDP (%)



Translation

Industry and Construction Agriculture - Forestry - Industry


1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Source: General Statistics Office

In recent years, in terms of the proportion of added value in GDP, the economic structure has changed according to the shift of the two groups of agriculture - forestry - fishery and industry - construction. The proportion of the agriculture - forestry - fishery sector (aquaculture) has decreased from 24.53% in 2000 to 20.30% in 2007 and the proportion of the industry - construction sector has increased from 36.37% in 2000 to 41.58% in 2007. Of which, the service sector still fluctuates at 38-39% (at current prices). Considering them in the period 2001-2005, and 2006 to present, the shift of economic structure between the three sectors is not as strong as in the 10-year period 1990-2000.

In the agriculture - forestry - fishery sector, the structure changed mainly according to the shift between the two groups of sectors: agriculture and fishery. At current prices, the proportion of added value of the fishery sector in the added value of the entire agriculture - forestry - fishery sector increased from 16.1% in 2001 to 18.49% in 2005. The proportion of the agricultural sector decreased from 78.55% in 2001 to 75.77%.

2005. Meanwhile, the proportion of the forestry sector remained unchanged, increasing only from 5.47% in 2001 to 5.74% in 2005.

In general, agriculture, forestry and fishery still hold an important position in the national economy. Although the contribution rate to GDP of this sector is decreasing in line with the trend of modern economic restructuring, the average growth rate of agriculture, forestry and fishery from 1990 to 2006 was 5.7%/year (calculated at 1994 comparable prices), the export value of agriculture, forestry and fishery was about 9.5%/year; especially the export value of fishery, increased by an average of more than 14.6%. Food production has continuously grown strongly (rice and corn). Rice and corn production increased from 19,225.1 thousand tons and 671 thousand tons in 1990 to 32,529.5 thousand tons and 2,005.9 thousand tons in 2000 and 35,826.8 thousand tons and 38,19.4 thousand tons in 2006. In 2007 alone, rice production for the three crops reached 35.87 million tons, an increase of 0.1% compared to 2006; corn production was 4.11 million tons, an increase of 8.2% compared to 2006.

The output of many annual industrial crops such as jute, sugarcane, peanuts, and soybeans all increased compared to the previous year, due to increases in both area and productivity. The output of most high-value export crops such as rubber, pepper, cashew, and tea all increased from 8.3% to 14.4% in 2007 compared to 2006 due to expansion in area and increased productivity.

Livestock and poultry farming continues to develop. However, the growth rate is not high and uneven among localities. According to the livestock survey results at August 1, 2007, the whole country had nearly 3 million buffaloes, an increase of 2.6% compared to 2006; 6.7 million cows, an increase of 3.3%; 226 million poultry; an increase of 5.3%.

The area of ​​concentrated forest plantations nationwide is estimated at 194.7 thousand hectares, the area of ​​forest regeneration is 969.3 thousand hectares, and the area of ​​forest being cared for is 487.2 thousand hectares. Thanks to the promotion of planting, forest regeneration, the area of ​​the whole country in 2007 is estimated at nearly 12.85 million hectares, an increase of 311 thousand hectares compared to 2006; raising the forest coverage rate from 37.9% in 2006 to 38.8% in 2007.

The country's aquatic product output in 2007 was estimated at 4.15 million tons, up 11.5% over 2006, of which aquaculture output was 2.09 million tons, up 23.1%.

In the industrial sector , in terms of current prices, the proportion of added value of the processing industry in the added value of the entire industrial sector increased insignificantly, from 59.16% in 2000 to 59.71% in 2005[12,16]. However, in terms of 1994 prices, this proportion increased from 67.52% in 2000 to 72.54% in 2005. This shows that in recent years there have been large changes in prices between different groups of goods within the industrial sector. Prices of processed industrial goods tend to decrease, while prices of the mining industry, the electricity, gas and water production and distribution industry have increased significantly. Specifically, the proportion of the processing industry in the added value of industry and construction has increased from 50.5% in 2000 to 51%/year in 2005; The proportion of the mining industry decreased from 26.3% to 25%; the proportion of the electricity, gas and water production and distribution industry decreased from 8.6% to 8.4%; the proportion of the construction industry increased from 14.6% to 15.8%.

The industry and construction sector has also made remarkable progress since 1988, with an estimated average growth rate of 9.4% per year in the period 1986 - 2005. From 1991 to present, the average growth rate has always been over 10%. In 2007 alone, industrial production at 1994 comparable prices increased by 17.1% compared to 2006.

Industrial production value at 1994 comparable prices by industry: mining industry increased from 13,919.7 billion VND in 1995 to 27,334.6 billion VND in 2000 and 38,848.9 billion VND in 2006; the value of processing industry increased from 83,260.5 billion VND in 1995 to 158,097.9 billion VND in 2000 and 420,144.7 billion VND in 2006; the value of electricity, gas and water production and distribution increased from 6,194.5 billion VND in 1995 to 14,703.4 in 2000 and 28,498.5 billion VND in 2006.

The service sector also has a very fast growth rate. The growth rate of the service sector from 1986 to 2005 was about 6.7%, especially in the period 2000 - 2005 the average annual growth rate was 7%. Although the proportion of this sector in the economic structure decreased from 41.8% in the period 1991 - 1995 to 38.2% in the period 2000 - 2005. But in the future, this sector will certainly

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