Vietnam is a single-party communist state with a socialist-oriented market economy. It occupies the eastern and southern part of the Indochinese peninsula and is an attractive destination for foreign direct investment in Southeast Asia. After the North Vietnamese communists defeated democratic South Vietnam in 1975, the democratic governmental system in Saigon started dismantling. Since the mid-1980s, Vietnam has changed a highly centralized planned economy to a mixed one, which prompted a rapid growth. Nowadays Vietnam combines the free market with economic planning and state intervention. It utilizes capitalist and socialist principles, building a hybrid economy. Despite the significant achievements in the Vietnam’s economic development, this paper defines whether there is a chance of the successful coexistence of capitalism and communism in the country in the long-term perspective.
Since the Vietnam-American War has ended, and the communist government unified Vietnam, the Vietnamese people show their desire to integrate into the world economy. Although there are differences in political values between the North and the South, generations of the Vietnamese showed their support for democracy, which helped to initiate economic and political reforms. Vietnam is a young country, but its economy is among the fastest-growing ones in the region, and the gross domestic product growth in 2016 is likely to surpass 6% (“Vietnam,” n.d.). As Vietnam undertakes its transformations, the government plays a heavy-handed part in country’s development; at the same time, dynamic entrepreneurial community continues to grow and takes its place in economic, social, and political spheres.
After the country rejected old dogmas, it embraced the free market instead of following the communist ideology. Vietnam is building its industrial power as fast as only a few other countries in the world did. Since the Vietnamese government has shared the benefits of economic growth amongst many sectors of society, poverty fell from 58% of the population in 1993 to 14.5% in 2008 (Flint, 2011, p. 5). Consequently, democracy along with its advantages is the right choice for Vietnam as it will keep the country integrating its dynamic market into the global economy.
While officially Vietnam remains a one-party socialist state that proclaimed communism, the diversity of non-state and foreign-invested enterprises proves its democratic development and provides the impressive record of industrial success, which the international community supports. However, the long-term effect of the coexistence of communism and capitalism ideologies, which do not belong to the same category, may be dubious. First, access to natural and material resources remains unequal: while the state-controlled enterprises are in the privileged position, entrepreneurs are unable to receive the advantages of resources allocation and cannot compete to fulfill their maximum potential. Secondly, a centrally planned economy cannot provide welfare gains, sufficient jobs for the vast majority of the population along with innovation, management, and marketing development. Therefore, Vietnam should continue its path towards democracy, where separate individuals will own most of the industry and agriculture, limiting government’s interference in people’s lives. To reduce inequality and give every person the right to experience equal political, social, and economic rights, Vietnam should allow its entire population to demonstrate their capabilities. People should use resources according to their needs and take part in developing a successful transitional yet state-directed economy.
It is important to note that there are some benefits of the state direction, which Vietnam may lose when moving forwards to the democracy path. There is a possibility that with the growth of international trade, local companies will have to struggle to benefit, while foreign enterprises will reap the profit of the export boom. Moreover, free elections with more than one political party in the future may allow the newly elected government to use unethical means for personal interests and gains. If Vietnam plans to follow the democratic path, then it should address one significant hurdle, which is the rife corruption in the system. The current impact of corruption is substantial as it delays the potential growth of the country. When the free market is functioning effectively, efficient allocation of all kinds of capital, including financial and human, will happen naturally.
Vietnam is among five communist countries today, which has had to adopt some capitalist principles to survive in the modern world. Another good example is China, where the Communist regime has co-existed with the liberal market for the last thirty years. The Chinese example shows that a communist government can have a successful capitalist economy, and the international community is a witness of this achievement. This authoritarian regime tolerates decentralized development and an expansion of private ownership. Three-quarters of the Chinese (76%) agree that most people are better off in the free-market economy; however, many of them complain about inequality (41%) and inflation (38%) (Simmons, 2014). According to Csanadi (2016), one should not identify the transformation of Chinese party-state system with any variety of capitalism, a centralized pattern of communist systems, or with transformations of post-socialist countries (p. 26). It is a unique hybrid that combines capitalism and state socialism with a developmental and entrepreneurial state.
To assess mechanisms of China’s evolution, one should mention not only transformations of the economic system, (which has undergone from the authoritarian style to state capitalism) but also note the political aspects. The Communist Party has introduced significant democratic reforms, including democratic local elections, to keep people’s trust, reduce local corruption, and prevent social unrest (Costly, n.d.). As Chinese people express their strong support for capitalism, the further development of the country will depend on the possibility of country’s leaders to preserve the current role of the Party and balance the interests of state and private sectors.
Communism and democracy are different political systems with their advantages and disadvantages. To clearly understand these differences, one should evaluate them. Therefore, a capitalist economy offers the free market for supply and demand, a distribution of goods and services according to the financial ability, and private entrepreneurs as owners of industries and enterprises, whereas Marxist economy offers the opposite.
It does not only presupposes the government’s operation of all farms and industries or setting production goals and prices, but it also does not guarantee civil or political rights as the Communist Party rules alone and people in power dictate laws. To maintain the capitalist economy without losing party’s control over people, China keeps such topics as democracy and famine off limits. The government blocks Internet sites and censors books and newspapers. Hence, the present coexistence of capitalism and communism is hardly an optimal solution for the country as the authoritarian regime continues moving towards state-owned enterprises and keeps the expansion of private ownership under the strict economic control. However, unlike China, there is no such strict media control and Internet censorship in Vietnam. Its government does not put many efforts into banning news on websites and social networks. As Vietnam has been under authoritarian regime for shorter time than China, its people have more experience of capitalism. As a result, it influences the expansion of homogeneous middle class, which would demand democratic reforms (competitive elections at all levels and the rule of law) and organize anti-communism waves more insistently than Chinese would do.
However, it seems that capitalism not always leads to democracy, and such countries as China and Vietnam have adopted the former, not the latter. Nevertheless, if democracy belongs to the party leaders and not to people, then public demonstrations of unemployed workers, dispossessed farmers, and corrupt officials are inevitable. Despite the grievances against the government, the new capitalist middle class of China and Vietnam seems to be content to go along with the authoritarian regimes, at least until people from private sector give their preferences to making money, not to demanding democracy.
Vietnam is at the second place of top ten fastest-growing economies in 2016, and the Communist Party of Vietnam has set a stronger tone to support private businesses over the next five years (Nguyen, 2016). However, in reality, the government should also realize other ideas and intentions, including privatization of state enterprises, adjustment of resources to people’s needs, and creation of favorable conditions for nation’s competitiveness. In 2014, the government of Vietnam along with the World Bank Group represented the Vietnam 2035 report. According to it, economic modernization with a competitive private sector, the modern rule of the law state, and a democratic society are among the main transformations that will help the country achieve its goals for 2035 (The World Bank & the Ministry of Planning and Investment of Vietnam, 2016, p.11).
A program of capitalist reforms and the free market in China and Vietnam has helped achieve more of economic equality than any other communist countries. If the government maintains this situation stable, it may help these countries evolve to become a democracy over the next few decades. As the overall welfare increases, the new capitalist middle class will start to be more confident and demand more civil as well as political rights and opportunities, such as fair elections with multiple parties, equality before the law, and possibility to dissent against the government. Consequently, when the values and interests of society change, and communist ideology loses its appeal, comprehensive political reforms will be unavoidable in China and Vietnam.
Though Vietnam is still a less developed country, its growth rate and an emerging economy place it among the fastest-growing markets in the world. There are many ways to democratize economic and social lives, but the long-term perspective will depend on the outcome of the political changes. Due to the progress made in the economic and market development, the Vietnamese government should now seek a new kind of justification to maintain its one-party dictatorship in the country. In fact, the economic development and public support for democracy have resulted in an increase of educational levels in the country and improved living standards. In general, Vietnam’s reforms in the last two decades made its society modernized and brought diverse interests to the population. Thus, the long-term perspective of the country’s development will depend on the public attitudes towards the democratic process.
As the private consumption and foreign direct investment are rising, there is a need to make some changes in the administrative system. Despite the high level of citizen confidence in the governance system, people of Vietnam want their government’s activities to become more transparent. The Grassroots Democracy and other citizen’s interactions have a positive impact as rural development professionals facilitate its promotion.
In conclusion, along with the progress in economic development and value changes in communist Vietnam, people’s demand for greater political participation to realize a more suitable political system has appeared. It will be difficult to maintain administrative power in Vietnam without the support of the new capitalist class, which has begun to participate in politics and form diverse groups necessary to realize their interests. In the future, experts will be able to answer the question of communism and capitalism coexistence; now, however, it is very likely that Vietnam will continue to evolve into a mature form of capitalism and democracy instead of an advanced stage of socialism.