Government of Vietnam

The Socialist Republic of Vietnam

January 6, 1946, marked the first general election which was held to elect the National Assembly, the supreme organ of power of the new Vietnam. In November 1946, the National Assembly adopted the first Constitution of the Republic. The Constitution clearly pointed out that "Vietnam is an indivisible and monolithic bloc; it is a democratic republic; power belongs to the whole Vietnamese people irrespective of race, gender, property, social class and religion."

Vietnam is officially the Socialist Republic of Vietnam and is a single party state. Although the state remains committed to socialism as its defining creed, the ideology's importance has substantially diminished since the 1990's. The President of Vietnam is the titular head of state and the nominal commander in chief of the military. The Prime Minister is the head of Government, presiding over a council of ministers composed of three deputy Prime Ministers and the heads of twenty-six ministries and commissions.

The National Assembly of Vietnam is the unicameral legislature of the Government, composed of 498 members. It is superior to both the executive and judicial branches. All members of the council of ministers are derived from the National Assembly. The Supreme People's Court of Vietnam, which is the highest court of appeal in the Nation is also answerable to the National Assembly. Beneath the supreme People's Court stand the provincial municipal courts and the local courts.

Military courts are also a powerful branch of the judiciary with special jurisdiction in matters of national security. All organs of Vietnam's government are controlled by the Communist Party.

Finance : The Dong is the official currency of Vietnam. 'Dong” literally means copper in Vietnamese – it was originally named when Vietnam was still part of French Indochina. Following the fall of Siagon in 1975, Vietnam changed the name of its currency to the Liberation Dong.

The US dollar is widely accepted in Vietnam with most major World currencies easily exchanged at all leading banks in the country. The official rate of exchange varies – currently it is approximately VND 17875 to US$1. Most major dealings are carried out in US dollars.

The State Bank of Vietnam was the only financial institute operating until the late 1980's when the country encountered economic reform and this model proved to be inadequate to attract foreign trade and investment. An import-export bank was established in 1989 to promote investment and to facilitate trade transactions. As foreign investment gradually increased in the early 1990's foreign commercial banks established branch offices which extended the scope of banking.

Trade : The Vietnam War and the following trade embargo imposed by America was devastating to the country's economy. The Soviet Union and the European communist countries were their major trading partners, but the demise of those governments in the late 1980s forced Vietnam to increase their efforts to find trading partners outside the communists block. They commenced trading with such countries as Japan, Singapore and Thailand.

The US trade embargo wasn't lifted until November, 2001, Vietnam's national assembly approved a trade agreement that opened U.S. markets to Vietnam's goods and services. Tariffs on Vietnam's products dropped to about 4% from rates as high as 40%. Vietnam in return opened its state markets to foreign competition.

The first decade after reunification the value of exports was only one-third of imports which greatly restricted economical growth. However with greater focus on finding trading partners and the eventual opening of the US markets, exports gradually increased and the trade deficit narrowed - 2009 Vietnam will export approximately US$56.5 billion worth of goods and import between US$68 billion and US$69 billion. These are significant figures when you consider the many obstacles that have been overcome.

In 1986 the Sixth Congress of the Communist Party of Vietnam, implemented Doi Moi, or Renovation. Several free market reforms were passed creating a carefully managed transition to a socialist-oriented market economy. Private ownership of farms and companies as well as deregulation of foreign investment led to a surge in economic activity.

By December of 2007 Vietnam had joined several key international organizations such as the World Trade Organization. In 2008 they were given a non-permanent seat on the UN Security Council.

Today Vietnam is the largest producer in the world of both cashew nuts and black pepper accounting for nearly a third of both markets, as well as the second largest rice exporter. They boast an unemployment rate of 4.3% according to the CIA World Fact Book. In 2006 they updated their intellectual property laws to be compliant with TRIPS standards. (Trade Related Aspects of Intellectual Property Rights which introduced intellectual property rules into the multilateral trading system for the first time)   

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