Human Resources Management Strategies of Taiwan-based Enterprises in Vietnam

2.2.2 Stages of Vietnamese Economic Development
Since the fully unification of country in 1975, the Vietnamese economy has 
entered to a peaceful development period. Although the current economic conditions 
are more favorable than at any time since Vietnam War ended, but the Vietnamese 
economy still faces with a number of challenges. Besides, the majority of challenges 
cause of a prolonged 30-year war that led to a miserable and backward economic 
circumstance. It requires sufficient resource and a certain time for overcoming. 
Furthermore, there were numerous historical upheavals taken place that are, the 
collapse of the Soviet Union and the socialist Eastern European countries which heavily 
impacted to Vietnam. Based on the historical context, Vietnamese economic 
development after unification could be divided into two main periods (1) the centrally 
planned economy from 1975 to 1985 period, and (2) the Vietnamese economic reforms 
(Doi Moi) from 1986 to present. 

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The centrally planned economy from 1975 to 1985 period 
The economic history of Vietnam during the period 1975 to 1985 also known as 
“subsidized
period”, it was applied of the old economic model in the North of Vietnam 
to a whole country after unification in 1975. This kind of economic model was not 
much different from the model of Soviet Union in terms of its internal mechanisms and 
poor in its level of development (Thang, 2001). In the first years after the war, the 
economic policy of government prioritized heavy industry and focused on extending 
the model of the centrally planned mechanism in the north to whole country instead of 
focusing on economic recovery such as the enhancement of labor skills, agricultural 
and production increasing. This model of economic development required the 
nationalization and centralization of the entire economy in which people’s ben
efits 
were not protected and the momentum of economic development was neglected, 
according to (Thang, 2001). 
At this stage, Viet
nam’s economy was mainly depended on backward 
agricultural and was took 80 percent of population, 
and large percent of people’s 
living 
depended on agriculture and related sectors (Thang, 2001). Despite the numbers of 
agricultural labors, but the annual agricultural production was not enough to supply, it 
reached 300kg per year (it measured in rice). Therefore, Vietnam economic in this 
period was not better and people suffered from persistent outbreaks of famine even 

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though the government imported thousands tons of food annually as well as was an 
effort to recovery the economy of country. 
Vietnamese economic reforms from 1986 to present 
After discovering Vietnamese economy in 10-year period fell far short of 
expectation and some initially successful experiments of many socialist countries in 
following the reforms promotion, in December 1986 the Sixth Congress of the 
Vietnamese Communist Party has abandoned the model of centrally planned of 
socialism, marked a significant turning point in the transformation of the Vietnamese 
economy to open a new model that are, market-oriented and globally integrated, it also 
called as Doi Moi. As (Thang 2001) stated that the purpose of these reforms basically 
were to get rid of the subsidized mechanism, to diversity the ownership of publicly 
owned assets; to encourage and stimulate the development of private organizations, 
individuals, and economic sectors; to make the best use of potential resources for the 
development of production and commodity exchange; to enact policies for the 
integration of Vietnam into the world and regional economies; to speed up foreign trade 
activities and encourage foreign direct investment (FDI); to combine administrative 
reform with the renovation of economic policy; to strengthen state management and 
macro regulation; and to combine economic growth with general social development to 
stabilize politics and “maintain socialist targets.”

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In fact, the transformation from a centrally planned model to a market economy 
in Vietnam was much different from what took place in the Soviet Union and the 
socialist countries of Eastern Europe (Thang, 2001). In Vietnam, it was essentially 
emphasized on social and political stability together with macro-economic stabilization 
and state resources controlling. The initial achievement of reform is the Vietnamese 
economic has rapidly grown and recovered the stagnation of earlier period, reduced of 
the inflation and increased the export turnover, especially, Vietnam become the third 
large rice exporter in the world after China and United State in 1989 (Vuong, 2014). In 
addition, after implementing the reform policies that Vietnam became a member of 
ASEAN, WTO (Association of Southeast Asian Nations World Trade Organization), 
and attracted foreign direct investment (FDI) into Vietnam, and improved the public 
diplomacy in international area as well (Vuong, 2014). It could say that, the reform 
( Doi Moi) of Vietnam as a way to revolution internal systems, policies, laws, so on and 
open “door” to welcome
external foreign investment which could have improving 
economic situation of country as well as enhancing Vietnamese social life.