ABSTRACT
This chapter examines the emergence and development of trade and markets in Vietnam during the transition, so far as the data permit, and then discuss in more detail the two key sectors of agriculture and industry. The transition to a market economy in Vietnam was, as discussed earlier, based upon a process whereby autonomous transactions grew up within the central-planning system. The events of 1989 were of historical importance. Prior to 1989, as part of the process of reducing plan distortions, a number of major price imbalances had been cut back: Lowering the level of subsidy inherent in rice rationing was an important example. Inflation, which had been one of the main causes of the downfall of the hard reform strategy in 1985, started to accelerate again early in 1989. Whereas during the 1980s the development of factor markets was inhibited by the particular transition path followed, there were important moves to encourage financial intermediation in 1988 to 89.
