The Diplomacy of Economic Reform in Vietnam

The post-1986 Vietnamese economic reform program, known as doi moi, is widely regarded as a remarkably successful attempt to solve the economic problems which plagued this country in the 1980s. The reform measures taken by the Vietnamese Communist leaders are well known to scholars. Still, the diplomatic context in which the reforms were launched seems not to have received sufficient attention. Vietnam’s post-1978 conflicts with China and Kampuchea resulted in high military expenditures and an international embargo, which constituted insuperable obstacles to economic development. Without the decisive improvement of Hanoi’s external relations in 1987-1988, it would have been hardly possible to cut defense spending, curb inflation and attract foreign direct investment. Noteworthily, doi moi was preceded by various reform experiments, but these earlier measures proved largely superficial, unsuccessful, or counter productive, not the least because they, having been introduced in a hostile external environment, were not combined with foreign investments and a reduction of military expenditures. The lessons of doi moi may also help scholars in determining whether North Korea’s post-2002 economic reforms are likely to lead to sustained development or not.