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Political, legal and Social Situation in Vietnam Today

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After the Vietnam war Vietnam became communist in 1975. Even though a lot has changed since then, Vietnam continues to be a communist country today. The politic framework in Vietnam is a single party socialist republic. The communist party is in power today, it consist of a 14-member politburo (short for _Political Bureau_, executive organization for a number of political parties, most notably those of communists) the members of the politburo were selected in an election in April 2006. The President of Vietnam is Nguyễn Minh Triết, and the Prime Minister Nguyễn Minh Triết.


Around 1988 Vietnam was forced to reach out to non communist states as the eastern block was dismantled. Instead of focusing on socialist ideologies, Vietnam was now desperate for foreign investors. As a result relations between China and Vietnam became stronger, as well as relationships with Germany, Japan, US and the Southeast Asian countries. Since 1994 firms from these countries have invested big In Vietnam.

However under the economic crisis in Asia in the late 1990’s there was a reluctance from the government to cooperate with foreign investors and their governments. The Vietnamese government was in denial on the economical crisis, and didn’t realise they relied on the foreign investors. Help from other countries weren’t accepted unless it fit the socialist vision. This led to conflicts between investors and government, and also heavy corruption.

Today Vietnam is a member of ASEAN (Association of Southeast Asian Nations) that has a goal to accelerate economic growth and development, and to obtain peace between the member states and strengthen their relationships. The ASEAN area is a free trade area, and forces Vietnam to constantly lower tariffs.

Vietnam has also recently opened doors to the US by signing “the United States-Vietnam Bilateral Trade Agreement” in 2002, which allows for greater exports to the US. In 2007 Vietnam joined the World Trade Organization.

Although Vietnam focuses hugely on foreign investment and foreign relationships, they still maintain their socialist views in their foreign policy. They said they backed up Saddam Hussein against the war on Iraq in 2003, and maintain a good relationship with Fidel Castro.


Vietnam has been trough a lot of change the last two decades, and has had huge development in terms of relationships with foreign investors. Even though over half of the Vietnamese business sector is still state owned, the doors for private businesses has opened more and more over the last two decades. However Vietnam is still struggling with corruption, at private, government and legal level. It is still you wealth, your contacts, both at social and at business level that will impact how far you get. According to the 2006 Transparency International Corruption Perceptions Index Vietnam is perceived to be no 123 on the corruption list (were 1 is the least corrupt) scoring only 2,6.

The Communist Party claims they are concerned about corruption, it being a threat to political and economical growth. They also want to welcome foreign investors, and have therefore experienced a lot of pressure from foreign investors and governments to clean up their act. They have stared to pay more attention to the problem, and in 2005 they passed out an anti-corruption act. It will however take more than only one act overnight to fight off corruption in Vietnam, but this is a good first step. They now have a challenge in enforcing the act, which will take some time and effort.


The legal system in Vietnam is based on communist legal theory and French civil law. The court system in Vietnam consists of The Supreme People’s Court, Provincial people’s courts, and District people’s Courts. The District Courts serve as a first court for economical, criminal and administrative cases. Provincial courts act as a court for appeal in all cases. The Supreme Court is the highest rank in Vietnam’s jurisdiction, and one can appeal from the Provincial courts to The Supreme Court.

The judiciary of Vietnam has independence on paper, however is strongly influenced by the communist party in practice.

In business there are different laws that apply to State owned enterprises, and privately owned enterprises. The government goal is to unify the laws fro these two sectors, so that by 2010 they will have the same laws. There is little control over financial reports in the business sector, especially in the state owned sector.


Vietnam traditionally has a culture based on the values of Confucianism, Buddhism, Taoism and indigenous animism. In line with globalisation Vietnam has adopted more and more of western culture and ideas. After the war the communist party has encouraged the people to adopt values such as love for labour, ownership, patriotism, socialism and proletarian leadership.

The Vietnamese work force of about 40 million is well educated but generally unexperienced. Therefore many companies have had a hard time finding enough skilled workers. Another consideration for companies investing in Vietnam are labour unions which are standard in Vietnam. Unlike many other countries, labour unions in Vietnam do not focus on the worker conditions but on improving productivity and facilitating communication between workers and management.

To the Vietnamese, business is a zero-sum game in which one party wins and one party looses. This attitude often makes deal-making confusing as it is hard to tell when the Vietnamese fully have agreed on a set of conditions. Another concern is how the Vietnamese emphasize internal consensus in decision-making. No agreement will be made until all parties have agreed and ignoring minorities and their opinions is out of the question.

As for the potential market, Vietnam’s demography consists of around 40 million people under the age of 30. This can create a dynamic and quickly evolving environment in the country.



www.transparency.org/content/download/11680/104752/file/Vietnam_NIS_2006.pdf –




 www.transparency.org/content/download/11680/104752/file/Vietnam_NIS_2006.pdf –

 www.transparency.org/content/download/11680/104752/file/Vietnam_NIS_2006.pdf –

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