productive forces with the consolidation and perfection of production relations. It is necessary to focus on improving and strengthening the organization and management of state-owned industry, public-private joint ventures and small-scale handicraft cooperatives, in order to increase efficiency, productivity, quality, reduce costs and at the same time increase accumulation for industrialization; produce consumer goods to serve people's needs; provide materials, agricultural tools, and process agricultural products after harvest.
The Central Conference determined that the essence of socialist industrialization is to make a technical revolution, develop heavy industry to gradually improve technology and equip the national economic sectors with new technology, in which process "must pay special attention to industry serving agriculture".
- Industrialization process and results
To increase the budget to meet capital requirements in implementing the 5-year plan in general and industrialization in particular, our Party and State have focused on consolidating and developing the banking system and the national financial system. On October 26, 1961, the Government issued Decree 171/CP clearly defining the functions and tasks of the State Bank of Vietnam. Then, on April 1, 1963, the Government established the Bank for Foreign Trade of Vietnam with the functions and tasks of foreign exchange trading, international payments, foreign trade loans, participating in foreign exchange management, contributing to protecting the currency and state assets, strengthening and expanding economic, political and cultural relations with foreign countries.
By 1964, the banking system was divided into: State Bank, Construction Bank and Foreign Trade Bank. Credit played an important role during this period; it mobilized all idle capital to serve the 5-year plan. Since 1961, the Bank has formed legal capital. The bank's own capital by the end of 1964 was 73 million VND, accounting for 6.2% of total capital. Bank credit accounted for about 50% of total working capital and became an indispensable part of the national economic activities. The structure of bank credit for specific economic sectors was: 35% for light industry, 45% for heavy industry; 50% of capital for material supply enterprises, and 70% for commerce.
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Compared to the economic recovery period, the total state investment capital increased by more than 5.1 times. Of which, investment in industry was concentrated in central and local establishments. In 10 years (1955-1965), investment capital for the central economy was very high, often accounting for about 3/4 of the total investment budget. During this period, state investment in industry was 4 times larger than investment in agriculture. The state allocated 48% of total capital for basic construction investment to the industrial production sector. Each year, the state invested 343 million VND in industry, 3 times higher than the annual average in the period 1955-1960; of which 78% was allocated to heavy industry, 22% to light industry. In industry, metallurgy was the industry with the largest investment, accounting for 30% of total capital investment in heavy industry; and chemical fertilizers were 17%; 16% for the coal industry; 60% for the mechanical industry and 5% for construction materials and the transportation and postal industry invested 654.4 million VND, equal to 19.1% of the total investment capital in the material production sector.
Thanks to the State's investment, industry has had a fairly high growth rate, many industrial parks were established and started production. These include Thuong Dinh Industrial Park (Hanoi), Thai Nguyen Iron and Steel Zone, Uong Bi Power Plant, Viet Tri Chemical, Ha Bac Fertilizer, Lam Thao Superphosphate. As for light industry, Van Diem Sugar Plant, Van Dien Battery, Hai Duong Porcelain, and 8-3 Textile Plants were built. The development of light industry and handicrafts has solved nearly 80% of consumer goods for the people. Production of state-owned industry has had remarkable achievements. Electricity production increased from 256.1 million kWh to 633.6 million kWh; coal from 2.6 to 4.2 million tons; pig iron from 7.7 to 127.8 thousand tons; cement from 408 thousand to 680 thousand tons; metal cutting machines from 799 to 1,866 units; Electric motors increased from 488 to 5,712 units; water pumps increased from 71 to 2,112 units. In particular, the mechanical engineering industry manufacturing lathes, grinders, transformers, diesel generators, and AC generators during this period was considered the most modern in Southeast Asia [Nguyen Tri Dinh & associates, 2013].
In agriculture, many irrigation works, pumping stations, and reservoirs were built, of which 64 large irrigation works were completed; agricultural mechanization was initially implemented. Mechanization rate
In 1965, the number of tractor stations and industrial machines serving agricultural cooperatives increased 3.3 times compared to 1960 [Dinh Quang Hai, 2017]. To eliminate backward manual labor in agriculture, the State focused on equipping tractors, industrial machines and improving tools serving means of transport for cooperatives. By 1964, the number of tractor stations increased 3.3 times, the number of tractors serving agricultural cooperatives increased 7.2 times, the cultivated area plowed by machines increased 14.5 times, and water pumps increased 9.7 times compared to 1960 [Tran Ba De and Le Cung, 2012]. In particular, in state-owned farms, the area plowed by machines reached 90%. The above changes in material and technical facilities helped increase rice productivity significantly. By the end of 1965, 7 districts and more than 600 cooperatives had achieved and exceeded 5 tons of rice/ha. The imbalance between crop cultivation and livestock breeding was also gradually overcome: in 1955, livestock breeding accounted for 15.3% of the total value of agricultural output, and in 1965, it increased to 22.9%.
In terms of trade, this period also developed very well. The domestic trade sector continued to expand the state-owned trade network, bringing shops and trading cooperatives to the commune level. This was a new change in the division of labor and coordination between state-owned trade and trading cooperatives. This combination helped the domestic trade sector increase its purchasing capacity, grasp the source of goods to serve the domestic processing industry and export. Foreign trade activities made progress. Exports in 1964 compared to 1960 increased by 135.7%, while imports increased by 116.4%. During this period, the North had trade relations with 44 countries in the world. However, foreign trade relations mainly took place with socialist countries; imports from these countries accounted for about 90% of the total import turnover value [Nguyen Tri Dinh & associates, 2013]. The development of foreign trade contributes to providing equipment for industry, stimulating production, especially handicrafts for export production.
The transportation network from central to local, from lowland to highland continues to increase. The railway system has been added to other important sections such as: Thai Nguyen - Bac Giang - Uong Bi - Hai Duong. Inter-provincial and inter-district roads, especially in mountainous areas, have been built with the motto of increasing demand and reducing ferries. Air routes have also been developed and expanded both domestically and internationally.
The socialist transformation of transport continued to be carried out. State-owned enterprises accounted for 83.3% of the volume of goods transported, but this was not much of an increase compared to before (80.5% in 1960). In 1964, the volume of general freight transport increased by 48.4%, and passenger transport increased by 49% compared to 1960.
Regarding the postal service, the material and technical facilities have improved. In 1965 compared to 1960, the length of telephone lines increased by 2.2 times, totaling 36.6 thousand km. The number of telephone switchboards was 1,217, 1.5 times more than before. The number of telephone sets reached 16.9 thousand, 1.8 times more than before. The number of telegraph sets was 230, 2 times more than before. The postal service delivered 2.8 times more postal items, 6.2 times more parcels, 1.5 times more telegraphs, and 1.4 times more long-distance telephone calls. However, the quality of the postal service's material and technical facilities was still low; equipment was not uniform. Investment capital was not enough to meet the need for fundamental innovation of the old technical system, but was mainly used to expand it in a patchwork manner.
The first five-year plan in general, and the initial steps of industrialization in particular, were not fully implemented. Since August 5, 1964, the US imperialists sent bombers to attack some places in the North. Then, on February 7, 1965, the US officially launched the first destructive war. The North was forced to change direction to construction and development.
In general, in the implementation of industrialization, the North has strengthened the material and technical foundation for the economy. The industrial and basic construction sectors have increased significantly. The economic structure has shifted in the direction: the proportion of industry and construction increased from 22.9% (1960) to 28.7% (1965); while agriculture decreased from 42.3% to 41.7%. In general, the total value of industrial and agricultural output increased from 47% to 55%; in which industry in group A increased from 33.7% to 42%; and group B decreased from 66.3% to 58% [Nguyen Tri Dinh & associates, 2013]. During the implementation of the first 5-year plan, the North revealed a number of limitations, mistakes, and shortcomings due to subjective, hasty, and dogmatic thinking. These shortcomings and mistakes are reflected in setting some targets that are too high, without taking into account the conditions and implementation capabilities;
reflected in the policy and method of industrialization. Industrialization during this period was implemented according to the import substitution industrialization model, while investment capital, science and technology, and human resources were not yet able to meet the demand.
• Strengthening socialist production relations
Strengthening production relations is implemented for economic sectors and for the economic management mechanism. The specific situation is as follows:
- Strengthening production relations for economic zones
+ For agricultural economy: The 3rd Congress and the 3rd Central Conference (July 1961) of the Party advocated completing the reform of production relations in agriculture; continuing to bring individual farmers into cooperatives, moving cooperatives from lower to higher levels; gradually strengthening material and technical facilities combined with improving cooperative management; consolidating and developing agricultural cooperatives and state-owned farms to develop agriculture in a sustainable manner. In higher-level cooperatives, land and means of production (buffaloes, cows, main agricultural tools) were collectivized. Members no longer enjoyed the benefits from land as before; in cooperatives, distribution was carried out according to labor.
The result of strengthening production relations during this period was: the number of farmer households joining cooperatives as of August 1964 was 2,591,300 households (by the end of 1960, this number was 2,400,000 households). In 1964, the number of member households in high-level cooperatives (although fewer in number) was greater than the number of households in low-level cooperatives. Specifically, the high level was 1,393,600 households; the low level was 1,197,000 households). The number of individual farmer households in 1964 was still about 14% (with 816,200 workers and about 2,118,000 people) [Le Mau Han & colleagues, 2013].
An important point to note during this period was the movement of people from the lowlands to build the economy in the mountainous areas. During the period of 1957-1960, the movement of land reclamation was piloted. From 1963-1964 onwards, land reclamation shifted to migration to settle down and establish a new homeland. During the first 4 years of implementing the first 5-year plan, about 500,000 farmers migrated to the new economic zones. If we count the number of
The total number of people working in factories, farms, and enterprises in the highlands was 600,000. According to Nguyen Tri Dinh and colleagues [2013, 577], "by September 1964, 850,000 people had come from the lowlands to build the economy in the highlands." Organized migration was a correct policy, and in fact had important economic and social significance in rural areas.
Although the consolidation of production relations in this period achieved remarkable results, there were some limitations and shortcomings. That is, the rapid transformation of many cooperatives to large-scale, high-level ones. Due to the limited qualifications and capacity of cadres and people, the process of building and consolidating new production relations in cooperatives encountered many difficulties, confusion and inadequacies. In many places, embezzlement, waste and violations of policies and principles of cooperativization occurred. To overcome this situation, the Government launched a movement to improve cooperative management, focusing on management in three aspects: production, labor, finance; implementing the principle of democratic management, ensuring the principle of distribution according to labor... By the end of 1964, over 25,000 out of 31,800 cooperatives in the plains and midlands had completed the first round of the movement; of which, 36% of the cooperatives were assessed as well-managed.
+ For the state-owned and collective economy: The State has launched the "three constructions, three anti-constructions" campaign with the following contents: raising awareness of responsibility, strengthening economic and financial management, improving techniques, fighting corruption, waste and bureaucracy. The purpose of this campaign is to boost production, enhance the role of state-owned enterprises, actively serve the cause of socialist industrialization, improve people's lives and successfully implement the first 5-year plan. To strengthen the centralized management of the State, the 8th Central Conference (term III) in April 1964 pointed out: All levels of the Party and government from the central to the grassroots level need to have a better grasp of economic and financial leadership and management, strengthen planning work, and implement the principle of democratic centralism in management. Implementing the above policy, some weaknesses in the management of the state-owned economy have been initially overcome; The state-owned economy was consolidated and continued to develop, contributing to promoting the cause of socialist industrialization.
In general, the state-owned and collective economies continued to expand in scale and increase in number. Although the Party and the State have focused on promoting the management mechanism, the level of economic management and organization at this time still had many weaknesses and limitations, so they could not effectively exploit and use investment capital, strengths in resources and labor. In addition, laxity in economic management has led to corruption, waste and bureaucracy.
- On economic management mechanism 1
Since the early 1960s, the Northern economy began to operate under a centralized planning mechanism . The economic mechanism at this time demonstrated the basic characteristics of the previous socialist economic model. These are:
+ The State directs economic activities through the planning apparatus and tools. The State's assigned plans are considered legal targets. Any changes in the plan and in the implementation organization must be reported to the competent authority and only implemented when approved.
+ The State concentrates financial revenue into the government budget, and then spends it on socio-economic activities according to the subsidy regime. The financial regime of state-owned enterprises is implemented according to the principle of collecting enough to spend enough, that is, the State collects profits, and the State compensates for losses. The financial, labor and salary planning targets of state-owned enterprises are assigned based on the production planning targets. All output products of state-owned enterprises must be handed over to the State. The salaries of managers and workers in state-owned enterprises are regulated by the State according to unified ranks and levels. The products of cooperatives are also concentrated in the State.
1 Economic management mechanism is a system of measures, forms, methods of organization, conditions for maintaining economic relations to develop in accordance with objective economic laws according to the determined goals in the socio-economic conditions of each stage of social development [Ngo Doan Vinh, 2013, 316]. Due to the specific conditions of Vietnam, in the years 1955-1965, the North applied a centralized planning mechanism to manage and operate the economy. In the period 1965-1975, in the context of the destructive war in the North, the centralized planning mechanism increased, gradually shifting into a centralized bureaucratic subsidy planning mechanism [Nguyen Ngoc Thanh & associates, 2013, 434].
+ In the centrally planned economic model, commodity-monetary relations are gradually narrowed, the economy is heavily materialistic. Prices are also regulated by the State and used to calculate the allocation and delivery between the State and economic units. Products created by material production units are concentrated in the hands of the State. From there, the products are distributed by the State according to the plan, if they are means of production, they will be handled by the material supply system; if they are means of consumption, they will be carried out by the State's trade system [Nguyen Tri Dinh & associates, 2013, 579].
The North's application of a centralized economic planning mechanism in the first half of the 1960s was consistent with the country's historical context and conditions at that time. Although this mechanism had its limitations, in the context of the North simultaneously building socialism and serving as a rear base for the revolution in the South, this mechanism proved to be appropriate. Its positive aspects were maximized, helping the North achieve its political goals.
5.1.2.3. Economy in the period 1965-1975
Due to the failure in implementing the "Special War Strategy", from the beginning of 1965, the US imperialists switched to the "Local War Strategy" to save the "Republic of Vietnam" regime and preserve neo-colonialism and military bases in South Vietnam. Implementing this strategy, on the one hand, the US increased military and economic aid to the Saigon government, at the same time sending US troops and allied troops to the South, on the other hand, conducting a more fierce war of destruction in the North than at the end of 1964. But in the end, the "Local War Strategy" also failed, forcing the US to sign the Paris Agreement, withdraw its troops and switch to the "Vietnamization of the war" strategy (1973-1975).
In such a context, the Party, the Government and President Ho Chi Minh had correct and timely policies and decisions to lead the country. The Resolutions of the 11th Central Party Conference (March 1965) and the 12th Central Party Conference (June 1965) clearly showed that. According to the Party's strategic orientation, the North continued to build socialism, becoming a great rear base for the struggle for national reunification. But in the new situation, the North