Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Vietnam: Economic Growth and
Impact on Human Rights
Carlyle A. Thayer
May 5, 2020

We are preparing a report about Vietnam’s rising economy, with the country set to
become the 20th largest economy in the world, according to
PricewaterhouseCoopers.
In our report we seek to explain why Vietnam’s economy is one of the fastest-growing
in the world, and how this economic transition has impacted on human rights.
Q1. How has Vietnam managed to grow exponentially from the 1970s to today?
ANSWER: The starting point for Vietnam’s economic growth came in late 1986 with
the adoption of the reform policy known as đổi mới in Vietnamese. Basically,
Vietnam jettisoned Soviet-style central planning in favour of what is now referred to
as a “socialist market economy.”
This was a necessary first step but not sufficient. Vietnam had to extricate itself from
Cambodia, where its military intervened in late 1978, in order to end a near universal
aid and trade embargo imposed by the international community. Vietnam withdrew
its military forces in September 1989 and agreed to a comprehensive political
settlement in October 1991. With the albatross of Cambodia gone from around its
neck, Vietnam reaped substantial economic dividends as trade and aid sanctions
imposed by the international community were lifted.
A key turning point was the Seventh National Congress of the Vietnam Communist
Party in mid-1991. The Political Report to the seventh congress declared that Vietnam
would “diversify and multilateralize economic relations with all countries and
economic organizations...” The Political Report mentioned “new friends” in particular:
To develop relations of friendship with other countries in South-East Asia and the Asia-
Pacific region, and to strive for a South-East Asia of peace, friendship and co-operation.
To expand equal and mutually beneficial co-operation with northern and Western
European countries, Japan and other developed countries. To promote the process of
normalization of relations with the United States.
Vietnam’s outward looking foreign and economic policies prepared the country to
weather the collapse of the Soviet Union at the end of 1991. Vietnam quickly
succeeded in moving from dependency on the Soviet Union to a more diverse and
balanced set of external relations. For example, in 1989, Vietnam had diplomatic
relations with only twenty-three non-communist states; by 1995 this number had
expanded to 163. During this period, Vietnam normalized its relations with all
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members of the Association of Southeast Asian Nations (ASEAN), acceded to the 1976
ASEAN Treaty of Amity and Cooperation, and normalized relations with China in
November 1991. In July 1995, Vietnam normalised relations with the United States
and became ASEAN’s seventh member in the same week. In 1998, Vietnam joined the
Asia Pacific Economic Cooperation (APEC) forum.
Vietnam has natural resources, a large and relatively young and literate population, a
low wage structure, expanding private sector, growing middle-class, and a single-party
state that sets clear strategic goals while maintaining domestic stability.
In sum, Vietnam was able to achieve high economic growth in the 1990s because it
began to reform and privatise (equitize) state-owned enterprises, encourage the
growth of the private sector, develop export-orientated manufacturing and opened
its economy to direct foreign investment and the establishment of joint ventures.
Q2. What has it done differently compared to Western nations?
ANSWER: Vietnam is a less developed country that emerged after the world’s
economy had become globalised. Vietnam also benefitted from membership in the
World Trade Organisation which set rules and standards for global trade. At the time
Vietnam promoted an outward looking economy it had access to many more markets
than Western economies that developed in an earlier era.
Vietnam initially relied on state-owned enterprises. While these had to be reformed,
they provided the foundation for food processing, as well as industry and
manufacturing (garments, textiles and footwear).
Q3. What is the main sector in Vietnam driving this growth?
ANSWER: The electrical and electronic sector is the main driver of economic growth,
having overtaken food processing (coffee, rice, seafood) and clothing, footwear and
textiles. But other sectors contribute to current growth such as tourism, machinery
and steel.
Q4. How do you expect Vietnam to perform economically over the next 30 years?
ANSWER: The global economy and its supply chains need to recover from the
coronavirus pandemic first before Vietnam can realistically expect to achieve its
projected growth rate of 7% from 2021-2025.
Vietnam will benefit from the relocation of factories and investment from China. Prior
to the coronavirus pandemic, Vietnam’s leaders made taking advantage of the 4th
Industrial Revolution a key national priority.
Q5. Regarding human rights: What effects did the economic transition have on human
rights in Vietnam? How has the human rights situation changed since the 1970s?
ANSWER: Vietnam’s economic transition has led to the spread and penetration of the
internet. In 2018, there were about 54.7 million users in Vietnam and a
penetration rate of 57 percent. The internet has led to the emergence of virtual
networks of political activists who have criticized the state for religious repression,
violations of human rights and demanded democratic reforms in Vietnam.
It could be argued that Vietnam’s human rights situation today is better than the mid-
1970-mid-1980s (see Table 1 and Appendix II). This is because Vietnam was emerging
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from three decades of war and after 1975, when Vietnam was reunified, the
communist regime treated former members of the Republic of Vietnam harshly. High-
level government officials and military officers were put in austere re-education
camps.
In the 1970s the communist regime launched campaigns to clamp down on
“comprador bourgeoise” and to suppress the United Buddhist Church of Vietnam. In
the 1980s, the communist regime faced opposition from former southern veterans of
the resistance against the United States. In short, the 1970s and 1980s was a period
of time when the communist-regime sought to impose one-party rule over the
country.
Vietnam’s political system began to evolve into soft-authoritarian rule with the
adoption of the 1992 state constitution. An uptick in the economy and improvement
in everyday life gradually led to the emergence of small groups of persons who took
to political advocacy. The largest and most prominent was Bloc 8406 formed on the 8
April 2006. That year Vietnam hosted the APEC summit and Bloc 8406 used this
opportunity to agitate for democratic reforms. It members were repressed.
By way of generalisation, Vietnam’s adoption of the amended state constitution in
2018 gave hope that its provisions would protect citizens who demonstrated in public.
However, Vietnam’s penal code, which was also amended, contained vague provisions
that were used to criminalize peaceful protest. “Conducting propaganda against the
socialist state” was one such provision used to imprison peaceful pro-democracy
advocates.
Table 1

Year Estimated Number of

Prisoners of Conscience
1989 130

1993 60

1994 60

1997 54

1998 70

1999 56

2014 75

2016 84

2017 165

2019 >130

Source: Amnesty International

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There has been a marked rise in peaceful public protests in Vietnam on a variety of
issues since the 1990s facilitated by the Internet. But there has not been the
emergence of a coherent opposition movement. If we take the last twenty-five years,
there has been no marked improvement in human rights as defined as civil and
political rights. See Table 1 for estimates of the number of prisoners of conscience.
Rather, there has been a constant drum beat of regime repression of political activists,
bloggers, journalists, and advocates of religious freedom, human rights and
democracy (see Appendix 1 below provides five-yearly snap shots).
Q6. What is your overall assessment taking a long-range view?
ANSWER: Vietnam has achieved remarkable success is lowering the incidence of
poverty, sustaining high growth rates, and achieving middle income status.
Nevertheless, Vietnam remains a developing country. Appendix II provides current
data on six indicators of socio-economic development. Vietnam ranks above the
average on two indicators (global competitiveness and ease of doing business) but
below the average on the other four measures (economic freedom, perceptions of
corruption, human development and press freedom). Current data, however, show
positive developments on five indicators, with most improvement in tackling
corruption. The one measure that fell was the United Nations Development
Programme’s Human Development Index. Vietnam fell only one place.
Economic development in Vietnam has led to greater pluralism within the confines of
the one-party state. For example, the National Assembly hosts lively question time for
ministers. National Assembly deputies take part in a “vote of confidence” on top
government leaders. Facebook has been a lively forum for discussion on social issues.
The Internet has given birth to specialist discussion groups.
People are generally free to express their opinions on many matters as long as they
do not cross well-established red lines such as criticizing state leaders by name or
calling for a change in the political system. There have been mass protests over bauxite
mining in the Central Highlands; toxic fish poisoning by Formosa Plastics, a Taiwan
company; Chinese actions against Vietnam in the South China Sea especially in 2014;
and draft laws on Special Administration and Economic Zones and Cyber Security.
Vietnamese authorities have generally tolerated these protests.

Suggested citation: Carlyle A. Thayer, “Vietnam: Economic Growth and Impact on

Human Rights,” Thayer Consultancy Background Brief, May 5, 2020. All background
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Appendix I
Human Rights Situation in Vietnam

Year Amnesty International Report

The year saw a surge in the number of prisoners of conscience. A crackdown
2019
on the rights to freedom of expression, association and peaceful assembly
continued. A new cybersecurity law entered into force in January, aimed at
restricting human rights online. The authorities subjected human rights
defenders and activists to harassment, intimidation, and abusive restrictions
both online and offline. The government prosecuted human rights defenders
and activists, using a range of criminal law provisions. Prolonged pre-trial
detention was common. Prisoners of conscience were denied access to
lawyers and family members, lacked proper health care, and in some cases
were subjected to torture.
Severe restrictions on freedoms of expression, association and peaceful
2014/15
assembly continued… Scores of prisoners of conscience remained imprisoned
in harsh conditions after unfair trials in previous years. They included bloggers,
labour and land rights activists, political activists, religious followers, members
of ethnic groups and advocates for human rights and social justice. New
arrests and trials of bloggers and human rights activists took place. The
authorities attempted to curtail the activities of unauthorized civil society
groups through harassment, surveillance and restrictions on freedom of
movement. Security officers harassed and physically attacked peaceful
activists, and held them in short-term detention. The death penalty was
retained for a wide range of offences.
A crackdown on dissidents continued with severe restrictions on freedom of
2009
expression, association and assembly. Political activists were arrested and
detained; others remained in prison after being sentenced under national
security legislation. Religious groups were discriminated against, including
attacks against Catholics peacefully protesting over a land dispute with the
state. More than 200 ethnic minority Montagnards fled to neighbouring
Cambodia seeking asylum from persecution. The National Assembly rejected
Government proposals to limit the scope of the death penalty.
Freedom of expression and association continued to be tightly controlled.
2004
Political activists and dissidents were arrested and detained; some were
sentenced to lengthy prison terms under national security legislation after
unfair trials. At least 83 people were sentenced to death, including 14 women.
Statistics on executions remained classified a "state secret", although
discussion on the effectiveness of the death penalty continued. Scores of
ethnic minority Montagnards in the Central Highlands and members of the
Khmer Krom community in southern An Giang province fled to Cambodia
seeking asylum from persecution.
At least 56 prisoners of conscience and possible prisoners of conscience
1999
continued to be held throughout the year. At least 15 prisoners of conscience
were released. At least a further 10 possible prisoners of conscience were
arrested, tried and sentenced. A further 40 people were imprisoned for
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political offences following unfair trials. Fifty-three new death sentences and
18 executions were reported, but the actual numbers were believed to be
much higher.
At least 60 prisoners of conscience and possible prisoners of conscience
1994
remained held throughout 1993. At least 13 prisoners of conscience were
released, along with several other political prisoners who had been held
without trial. At least nine political arrests were reported. Some political trials
held during the year appeared to fall short of international fair trial standards.
Eight prisoners were reported to have been sentenced to death but no
executions were recorded.
Nearly 5,800 political prisoners were said to have been released from
1989
administrative detention in "re-education" camps in two major amnesties
announced during 1988. They included more than 1,000 military officers and
civilian personnel of the former Republic of Viet Nam who had been detained
without charge or trial since 1975. According to the government, only about
130 political prisoners held since 1975 remained in "re-education" camps by
the end of the year. However, several hundred others arrested in later years
were believed still to be in detention, including at least 25 prisoners of con-
science, some of whom were brought to trial in 1988 after years in detention
with out charge or trial. The government media reported several incidents of
ill-treatment and killings of detainees in custody by police and public security
forces during 1988. According to press reports at least five people were
sentenced to death but no executions were publicly announced during the
year.
Amnesty International continued to be concerned about the long-term
1984
detention without trial of thousands of members of the former South
Vietnamese Government in "re- education" camps. It was also concerned
about other categories of political prisoner in Viet Nam whom the
organization had adopted as prisoners of conscience. The absence of
adequate legal safeguards to protect detainees in pre-trial detention and the
use of the death penalty remained other Amnesty International concerns in
Viet Nam.
During that period [April 1975-December 1979], tens of thousands of former
1979
members of the armed forces and administration of the Republic of Vietnam
(South Vietnam) were detained without charge or trial for "re-education".
Many of those detained were soon released, but Amnesty international
became increasingly worried in 1977 and 1978 when it became clear that the
thousands of people in the "re-education" camps would still be in them after
three years had elapsed. Amnesty International also received reports of the
arrest on political grounds of individuals who had had no connection with the
former Thieu government or with the United States presence in Viet Nam.
There appeared to be a lack of legal safeguards for those detained on such
grounds.
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Appendix II
Indicators of Socio-Economic Development

Organisation Survey Ranking*

World Economic Forum Global Competitiveness 67 out of 141 (+3.5)

Report 2019

World Bank Ease of Doing Business 70 out of 190 (+1)

Report 2020

Transparency Corruption Perceptions 97 out of 180 (+10)

International Index 2019

United Nations Human Development 118 out of 189 (-1)

Development Programme Index 2019

Heritage Foundation Index of Economic 128 out of 180 (+2.2)

Freedom 2019

Reporters Without Worldwide Press 175 out of 180 (+1)

Borders Freedom Index 2020

LEGEND: In the right-hand column the number in parentheses () refers to how the current score
compared with the report that proceeded it. A plus (+) indicates positive progress while a minus (-)
indicates a drop.