Đổi Mới: renovation
Facing hunger and hyperinflation, the Communist Party abandons central planning for a "socialist-oriented market economy", launching decades of rapid growth.
- Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy — World Bank and Ministry of Planning and Investment of Vietnam, World Bank (2016)
- Vietnam: A New History — Christopher Goscha, Basic Books (2016)
By the mid-1980s collectivised farming and central planning had failed. Vietnam was importing rice, inflation was running at hundreds of percent a year and the Soviet aid it depended on was shrinking. At its Sixth Congress in December 1986, the Communist Party, under new leader Nguyễn Văn Linh, adopted Đổi Mới, “renovation”.
- Vietnam: A New History — Christopher Goscha, Basic Books (2016)
- Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy — World Bank and Ministry of Planning and Investment of Vietnam, World Bank (2016)
Farmers were allowed to work their own plots and sell surpluses, and within a few years Vietnam had become one of the world’s largest rice exporters. Private business was legalised, foreign investment welcomed, and relations restored with China in 1991 and the United States in 1995; Vietnam joined the WTO in 2007. Growth averaged over 6% a year for three decades, and the share of people in extreme poverty fell from around half in the early 1990s to a few percent.
- Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy — World Bank and Ministry of Planning and Investment of Vietnam, World Bank (2016)
- Vietnam: A New History — Christopher Goscha, Basic Books (2016)
Why it matters today
Đổi Mới is why most Vietnamese today live far better than their parents did, why the cities are full of motorbikes, cafés and factories, and why Vietnam is a major exporter. It also explains the country's political bargain: economic freedom and rising incomes under continued one-party rule.