The government embarked on a mass campaign of
collectivization of farms and factories. This caused an economic collapse and resulted in triple-digit inflation. Reconstruction of the war-ravaged country was slow, and serious humanitarian and economic problems confronted the communist regime. Millions of people
fled the country in crudely built boats, creating an international humanitarian crisis.
[29][30]
In 1978, the Vietnamese army invaded Cambodia (sparking the
Cambodian-Vietnamese War) to remove from power the
Khmer Rouge—who had been razing Vietnamese border villages and massacring the inhabitants,
[31] installing a regime whose leaders rule until 1989.
[32] This action worsened relations with
China, which launched a brief incursion into northern Vietnam (the
Sino-Vietnamese War) in 1979.
[33] This conflict caused Vietnam to rely even more heavily on Soviet economic and military aid.
Đổi Mới (renovation)
At the Sixth Congress of the Communist Party of Vietnam in December 1986, reformers, upset by the lack of economic progress after the
Vietnam War,
[34] replaced the "old guard" with new leadership.
[35] The reformers were led by 71 year-old
Nguyen Van Linh, who became the party's new general secretary.
[35] Linh was a native of northern Vietnam who had served in the south both during and after the war.
[34][35] In a historic shift, the reformers implemented
free-market reforms known as
Đổi Mới (
renovation), which carefully managed the transition from a
planned economy to a "
socialist-oriented market economy".
[36][37]
With the authority of the state remaining unchallenged, private ownership of farms and companies engaged in commodity production, deregulation and foreign investment were encouraged while the state maintained control over strategic industries.
[37] The
economy of Vietnam subsequently achieved rapid growth in agricultural and industrial production, construction and housing, exports and foreign investment. However, these reforms have also caused a rise in inequalities in many spheres of social life, such as income and gender inequality.
[7][8][9][10]