VIETNAM'S GROWING POPULATION: TOUGH CHOICES FOR HANOI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00928R000200030003-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 21, 2016
• Document Release Date: March 12, 2009
• Sequence Number: 3
• Publication Date: December 1, 1983
• Content Type: REPORT

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Secret
EA 83-10240
December 1983
Copy 2 ~ ~~
Directorate of Secret
Intelligence
Vietnam's Growing Population:
Tough Choices for Hanoi
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Intelligence
Vietnam's Growing Population:
Tough Choices for Hanoi
Southeast Asia Division,
This paper was prepared by ~~ Office of
East Asian Analysis. Comments and queries are
welcome and may be directed to the Chief,
Secret
EA 83-10240
December 1983
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 Vietnam's Growing Population:
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Summary
/nformation available
as o./'l5 November 1983
was used in this report.
Tough Choices for Hanoi 25X1
According to official Vietnamese projections, Vietnam's population will
increase from 56 million to as much as 90 million in the year 2000. Faced
with this expansion, Vietnam will find it almost impossible to right its
economy and reduce its dependence on the USSR for continued, massive
economic aid:
'? Food shortages are chronic and the potential for increased agricultural
production is/limited by shortages of high-quality seeds, fertilizer, and
equipment. There is no food reserve.
? Insufficient funds, equipment, and technical expertise will limit the
industrial expansion needed to create jobs. Unemployment already
averages about 20 percent.
? A crackdown on the private sector threatens both the limited progress
made in increasing grain production and a promising source of jobs.
The policy options available to Hanoi to solve the dual problems of food
shortages and unemployment-controlling population growth and sending
more guest workers abroad, for example-offer little prospect for quick or
lasting relief. As a result, even under the best circumstances we expect
continued economic stagnation. Should Vietnam face severe food shortages
as it did in 1978 and 1979, we would expect Hanoi to stop attempts to so-
cialize the economy in an effort to increase domestic production. And, if
forced to turn again to the Soviet Union for massive emergency aid, Hanoi
might also have to allow a greater Soviet presence in Vietnam.
Secret
EA 83-1024()
December 1983
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Vietnam Population Density
Population shown by province.
o t o0 zoo aoo t o0o i u a c ~ ~n u
Persons per square kilometer ` ~ ~ ? K a n h
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Vietnam's Growing Population:
Tough Choices for Hanoi ~
Vietnam's population doubled between 1950 and 1980
to more than 53 million, and Vietnamese demogra-
phers expect that number to rise to 75-90 million by
the year 2000. This growth will strain the country's
food resources and increase pressure on Vietnamese
policymakers to allow continued expansion of the
private sector as a means to create jobs
Pressure on the Food Supply
Based on per capita land area, Vietnam's population
does not appear impossibly large to support. Virgin
agricultural land includes 1.5 million hectares of high
potential in the Mekong Delta plus 3.5 million usable
hectares in the coastal regions, the Central Highlands,
and mountain areas. Higher yields could also raise
production. Vietnamese agronomists calculate that for
the better farm lands, yields per hectare could be
doubled to 5 to 10 tons a year by improving farm
technology and by multiple cropping. In fact, these
agronomists, along with foreign specialists of the
Economic and Social Council for Asia and the Pacif-
ic, believe that, if fully developed, the Mekong Delta
by itself could feed more than 100 million people.
The present food situation, moreover, is the best since
the Communist takeover in 1975. According to Viet-
namese Government statistics, grain output increased
21 percent between 1979 and 1982 to reach 10.5
million tons (16.2 million tons if measured in paddy
equivalent). In addition, food imports declined from
1.4 million tons in 1978 to 310,000 tons last year, and
official data show no food imports during the first
three quarters of 1983. In September, Politburo mem-
ber To Huu claimed that Vietnam "for the first time"
was "meeting its basic food needs by its own means."
But the Vietnamese will have difficulty maintaining
their new self-sufficiency. The grain produced in
1982, after deductions for seed and losses, provided
only 10.3 kilograms per month per person, down from
15 kg in the mid-1970s, and a further decline could
lead to serious malnutrition. Regime spokesmen ad-
mit that there is no food reserve. The increase in
output was achieved by incentives instituted in
1979-halting collectivization of the south and allow-
ing collectivized peasants to sell above-quota output
on the free market-rather than by improved farm
technology or increased inputs. These incentives, how- 25X1
ever, are already being retracted to speed up socializa-
tion of the southern economy,' a move that could lead
to a sharp drop in production. Also, agriculture
remains vulnerable to drought because there has been
little expansion of irrigated areas; finally fertilizer
application rates have not improved for years.
Expanding production will be difficult. To maintain 25X1
per capita grain supply at the 1982 level, Vietnamese
farmers would have to increase production by 250,000
to 400,000 tons annually to keep pace with population
growth. Annual increases of 600,000 to 750,000 tons
would be needed to build food reserves, provide for
minimal exports, and raise the level of consumption.
But Vietnam does not have the resources to provide
the quantity and quality of seeds, chemicals, irriga-
tion, and equipment needed to sustain such increases.
In addition, budgetary data Hanoi submitted to the
IMF indicate a severe shortage of long-range funds to
develop agriculture, and few of Vietna:m's meager
222,000 high school, college, and technical school
graduates can be spared to run large-scale research
projects. Vietnamese technicians are just beginning to
experiment with high-yield strains of rice. We con-
clude from these shortcomings that the great potential
of the fertile Mekong Delta will be unrealized for
many years.
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The bulk of our i~t1ormation on the Vietnamese
population comes from data Hanoi released to the
United Nations Fund for Population Activities
between 1975 and 1982. This is supplemented by
the
Vietnamese official media. All of the data is incom-
plete and unreliable; the US Census Bureau believes
that there was substantial undercounting during the
1950s to the 1970s.
With 56.4 million people, Vietnam is the world s I1 th
most populous country, roughly equivalent to the UK,
France, or Italy, and about 10 percent larger than
Vietnam's Asian neighbors, Thailand or the Philip-
pines. The US Census Bureau, adjusting for d~cien-
cies in Vietnamese data, estimates that Vietnam's
population grew from 27 million in 1950 to SS
million in 1981, an average annual rate of growth of
2.3 percent. Hanoi claims that the present rate is
"slightly above 2 percent."
The annual rates of growth since World War II have
been moderate compared with some other less devel-
oped countries. In this century, there have been two
war-related slowdowns in population growth that
have been at least partly responsible for this lower '
overall rate. The first was a famine thatfollowed
A Shortage of New Jobs
Vietnamese data suggests to us that unemployment
has remained steady at about 20 percent since 1977.
Because industrial production has either stagnated or
fallen and the opening of virgin farm land has nearly
halted since 1979, we also believe that the burgeoning
private sector has absorbed the bulk of the 1.5 million
people who enter the labor force each year.
Hanoi will find it increasingly difficult to keep the
employment rate from getting worse. First, the lead-
ership has become more and more concerned about
the expansion of the private sector and has begun to
restrict it. In its fourth party plenum held in June, the
Central Committee officially endorsed a crackdown
under way since early 1983. Vietnamese officials have
World War II and killed 2 million people; the rate of
population growth slowed to 1.4 percent during 1950-
55. The second reduction took place during 1965-75,
when war casualties and disruptions reduced the rate
to 2.0 percent.
Population density in Vietnam is a moderate 170
persons per square kilometer. Substantial overcrowd-
ing exists in the Red River Delta, however, an area
with I1 percent of the land and one-third of the
population. Some provinces in the Delta have up to
1,100 persons per square kilometer
Data Vietnam released in 1979 indicate that the
laborforce-by Vietnamese definition able-bodied
persons aged 16 to 64-was 26.4 million. IJ'it grew in
proportion with the general population during the
subsequent jour years, it would be approximately 29
million today. By the same extrapolation from 1979,
females in 1983 are 53 percent of the work force.
Children through age 1 S are about 45 percent of the
population.
Official data indicate that unemployment for 1977
was about 4.4 million or 20 percent of the work force.
We estimate 1983 unemployment to be 5.4 million
and the rate to be roughly the same as in 1977
closed down private firms or greatly increased their
tax rates and restricted the amount of money and
goods that can be received from overseas Vietnamese.
The regime acknowledges that the private sector still
plays a useful role, and Hanoi is unlikely to eliminate
those private production and distribution functions
that the state sector cannot replace. Nonetheless,
Hanoi's determination to reduce the size of the private
sector will lead to a scarcity of goods and funds,
harassment of private traders by security forces, and
shrinking employment opportunities.
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Secondly, as in the agricultural sector, Vietnam does
not have the resources to expand industrial production
significantly. A deficit of one-fourth of the national
budget in 1982-caused by the need to subsidize
workers and government officials so that they could
purchase food and consumer goods on the free mar-
ket-forced the government to consolidate or stretch
out all capital construction projects. And statements
by Vietnamese officials suggest that investment in
centrally run industries such as power plants, textile
mills, mines, chemical complexes, and engineering
establishments may soon be cut back. Officials have
noted that these enterprises have alreadly been absorb-
ing an undesirably larger share of total. investment.
By Hanoi's accounting, the percentage of total indus-
trial investment these industries receivt;d grew from
62.5 percent in 1977 to 73.7 percent in 1981, the last
year for which information is available. The resources
allocated to these industries, moreover, have not been
productive. In 1981 the firms employed 53.2 percent
of industrial labor while producing only 33.4 percent
of industrial output.
Employment prospects in local or collectively run
industries are somewhat brighter. Many collectively
run enterprises are financed by collective farms whose
incomes have been rising as a result of the increase in
agricultural production. The collective industries in
the cities have been allowed to buy andl sell in the
private sector to gain better access to raw materials
and profitable outlets for their products. Growth in
these industries, however, remains prot~lematic be-
cause it depends on continued good agricultural per-
formance and on leniency toward the private sector.
Hanoi's Policy Options
The options open to Hanoi to solve the dual problems
of food shortages and unemployment tl-at will result
from population growth are limited
Population density (1980)
(per square kilometer) we expect a mix of policies. C
Red River Delta 280-1,100
Mekong Delta 15-500
Rest of Vietnam 87
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From 1975 through late 1979, the Vietnamese leader-
ship instituted controls to suppress capitalism in the
south. Bank accounts werelrozen, private businesses
were closed, and trade was severely restricted. There
were no compensations, however, to promote socialist
economic activity.
In much of the countryside, the government pushed
collectivization hard. Forced sales of grain to the
government at dictated low prices and roadblocks to
prevent peasants from transporting grain to sell in
cities reduced incentives to grow more than enough to
meet family needs. As a result, there was a rapid
decline in the south's total industrial and agricultur-
al production.
Faced with widespread malnutrition and the out-
break of war with China and Kampuchea, Hanoi in
1979 adopted emergency correctives to stop two years
of declining production. Collectivization and the re-
settlement of peasants to virgin land were suspended.
Physical barriers to trade were removed. Agricultur-
al taxes were frozen. Increases to grain output were
exempted from taxation through 1984. And permis-
sion was granted to withdraw money from formerly
frozen bank accounts to~nance new private enter-
prises. Finally, in 1981, collective land began to be
leased to individual peasant families who contracted
to provide the state with a stipulated amount of
output; any excess belonged to the peasants.
These policies, along with favorable weather, arrested
the decline of the economy. But they also fostered a
private sector that at the end of the first postwarfive-
year plan (1976-80) was producing more than 40
percent of Vietnam's industrial and agricultural out-
put. In the south, the private sector today accounts
for at least 60 percent of all retail trade, including
food. Private traders buy grain from Mekong peas-
ants to sell in Ho Chi Minh City and other urban
centers. The profits are used to~nance small-scale
private industry, to hoard and speculate, and to
divert goods illegally from state channels. The Viet-
namese media report that the profits of the private
sector also have been used to corrupt officials and
divert state raw materials, fuels, and manufactured
products into illegal domestic and export channels.
Even state enterprises are now involved in the private
sector by keeping part of their output for unautho-
rized exchanges or sale outside the state plan. This
allows them to make profits and to obtain raw
materials the state cannot supply.
Government efforts to compete with the private sector
have worsened the plight of officials who depend on
government subsidies for food and essential goods.
Increases of 600 to 700 percent in 1982 government
farm procurement prices passed on through the
economy-were accompanied by salary increases to
government personnel of only 100 to 200 percent. The
money the government printed to pay the procure-
ment prices drove inflation up to well over 100
percent. This forced many officials to participate in
the very sector they were charged with suppressing.
Beginning in early 1983, the regime began to tighten
controls on private operations. Registration drives
identified businesses that had escaped taxation. Tax
rates on all private businesses were drastically in-
creased. Limits were placed on the receipt from
relatives abroad olluxury consumer goods that
supplied the private sector. Heavy fines and jail
sentences have been handed out to the most ostenta-
tious consumers among those enriched by free market
operations.
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Table 2
Vietnam: Use of Contraceptives, 1975-80
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Monetary Incentives for Birth Control in Model
Province
Each woman who accepts an IUD receives 30 kg of
rice and 10 days leave.
? Those with one child also receive 100 dong.
? Those with two children also receive 70 dong.
Each woman under 45 who goes five years without a
child after her second receives 200 dong per year.
In Da Nang city only, women between 22 and 25
receive the following:
? 200 dong if there is a two-year interval between
their first and second children.
? 300 dong if there is a three-year interval between
children.
? 400 dong if there is a jour-year interval between
children.
Locplities that meet annual goals in birth control
receive 2,000 to 3,000 dong.
Note: The average per capita income in 1982 was
about 450 dong.
The first is population control. In 1980 Vietnam set a
goal of reducing the natural rate of population in-
crease to 0.1 to 0.2 percent a year, a limit of two to
three children per mother. The government encour-
ages postponing marriages (the minimum age for
women is 18), delaying having children, spacing chil-
dren at five-year intervals, limiting the number of
children per family to two or three, and using contra-
ceptives, abortions, and sterilization.
~ Vietnamese press reports claim that in the model
province of Quang Nam-Da Nang, the birth rate has
fallen from 3.05 to 1.84 per thousand. The birth
control program in the province, however, was supple-
mented by intense propaganda, visits to families by
medical personnel, and lavish financial incentives-
practices Hanoi cannot afford to carry out nation-
wide.
In the event of severe food shortages, Hanoi can
appeal for increased foreign aid. In the past, the
USSR has provided up to 1 million tons of food a year
when Vietnamese crops suffered heavy losses. Non-
communist donors have gone into action on Viet-
nam's behalf in the wake of natural disasters or to
sustain special groups such as children. But the
Soviets have been cutting back food aid, and non-
communist countries remain reluctant to provide
assistance as long as Vietnamese troops remain in
Kampuchea. We believe that Hanoi will be unable to
solicit more than 1.5 million tons of grain aid a year
regardless of the situation.
Hanoi could depend more on the private sector and on
incentives to boost food production and create jobs.
Hanoi is already moving away from this policy in the
private sector, however, and there are some concerns
about incentives in the socialist sector as well. Uncol-
lectivized food production is under tighter control
than at any time since late 1979; officials in the
Mekong Delta are cracking down on excessive private
land holdings, on the hiring of labor, and on private
credit. The regime seems willing to suffer some loss in
the free market that buys private grain.
production for the sake of curbing the speculation,
price-fixing, corruption, and tax-dodging that have
become synonymous with the private farm sector and
The policy of allowing collectivized peasants to keep
above-quota output and sell it freely has been expand-
ing with the public support of top leaders. Some
dissent, however, has appeared in official media,
expressing apprehension that Vietnam may wind up
with a farm system socialist in name but capitalist in
fact. Like reliance on aid, reliance on incentives
rapidly runs up against political costs unacceptable to
Vietnamese leaders
Some of the new labor force entrants could be soaked
up by an expansion of the military. The 1-million-
man army so far has not placed an inordinately heavy
burden on the food supply because many units grow
their own food. But there are no indications that
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Vietnam intends to expand its combat forces in
Kampuchea, Laos, or along the northern border with
China, and additions to the ranks directed into quasi-
economic units such as construction corps or state
farm staffs would cut into job opportunities in the
civilian sector. As a result, we doubt that an expanded
military would have much impact on the employment
picture.
Hanoi might also press the Soviet and East European
governments to take more guest workers. We estimate
there are 70,000 to 100,000 Vietnamese workers in
these countries; some 18,000 in the USSR and the
rest in Czechoslovakia, East Germany, Hungary, and
Romania. There is no indication, however, that the
host countries intend to take large numbers of addi-
tional Vietnamese workers; agreements so far indicate
the numbers will increase by only a few thousand in
each country.
Vietnam since 1975 has kept an open door to joint
ventures with foreign partners who provide capital,
technology, or foreign markets. Already established
are aSoviet-Vietnamese company for exploration of
offshore oil, a joint venture with a Japanese shrimp
enterprise, and a few electronic and textile plants with
French and Japanese partners. Vietnam also processes
imported Soviet raw or intermediate materials into
products for reexport. In application, however, this
policy has been subverted by the muddled operations
of the Vietnamese bureaucracy, and new applicants
have been few.
Neighboring Laos and Kampuchea are less densely
populated than Vietnam, and there has been specula-
tion
that Hanoi intends to settle Viet-
namese citizens throughout Indochina. There is no
evidence of such a policy. Before Lon Nol's coup
against Prince Sihanouk in March 1970, there were
500,000 Vietnamese living in Kampuchea. Under
both the Lon Nol and Pol Pot governments, the settler
community was decimated; most of those not killed
fled to southern Vietnam. Many of the original
settlers have now returned, and they have been sup-
plemented by farmers from Vietnam's western border
provinces and by southern Vietnamese fleeing the
crackdown on the private sector and induction into the
Table 3
Vietnam: Cities With Over 100,000 Population
Ho Chi Minh City
NA
NA
2,441,185_
1-laiphong
269,248
NA
830,755
Hanoi
643,576
NA
819,913
Da Nang
NA
384,880
318,655
Bien Hoa
NA
NA
190,086
Can Tho
NA
116,720
182,856
Nha Trang
NA
106,200
172,663
Hue
NA
183,780
165,865
Nam Dinh
NA
NA
161,180
Vinh
NA
NA
1$4,040
Thai Nguyen
NA
NA
138,023
Qui Nhon
NA
170,190
130,534
1-Ion Gay
NA
NA
115,488
1_ong Xuyen
NA
NA
112,488
Thanh Hoa
NA
NA
103,981
My Tho
NA
NA
101,496
Total
6,139,208
military. The Vietnamese population nonetheless re-
mains below the 19701eve1 at 300,000 to 400,000. We
know of no sizable Vietnamese settlements in Laos. 25X1
Although Hanoi probably retains colonization as an
option, we believe such a policy would. be aimed at
improving security in Kampuchea and thus would ' .
involve already productive, politically reliable agricul-
tural and light industrial workers. As a result, we 25X1
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Looking Ahead
As long as there is no resurgence of aid to Vietnam
from non-Communist countries-an unlikely prospect
while Vietnamese troops remain in Kampuchea-we
look for years of economic stagnation, continued high
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unemployment, and no major improvement in the
standard of living. Significant expansion of food
production appears to be out of Hanoi's reach, and
food aid is likely during emergencies. Industrial ex-
pansion, moreover, is unlikely without foreign tech-
nology, managerial expertise, and equipment. Both
domestic and foreign aid resources for the near future
by necessity will be used to relieve emergency short-
ages, and there will be little left over for building job-
creating industrial plants or opening new lands for
peasants. Even if non-Communist aid resumed, we
would expect few short-term benefits. Vietnam's bu-
reaucracy and its logistics system are incapable of
absorbing much more aid. Soviet equipment has often
been left undelivered in ports until it has rusted, and
Vietnamese treatment of Western businessmen has
been so abrasive and obstructive that they are not
anxious to return.Z
Shortages of food and jobs will also undermine at-
tempts to socialize the economy. Collectivization of
agriculture and elimination of the private sector will
have to be balanced continuously against potential
damage to current food production and loss of jobs
that the state sector cannot replace. We believe that a
private sector and personal incentive policies in agri-
culture, even if nominally collectivized, will become a
permanent part of the Vietnamese economy.
We think it unlikely that Hanoi will allow economic
problems to lead to social turmoil that threatens the
regime. Manipulation of the private sector will, as it
has in the past, provide some relief during crises and,
more importantly, Vietnam's extensive internal secu-
rity apparatus can prevent the growth of organized
domestic resistance and control spontaneous popular
outbursts. At worst, Vietnam could become more
dependent on the Soviet Union. Already unhappy
with Vietnam's misuse of Soviet aid, Moscow has
insisted on a growing role in Vietnamese economic
decision making. If faced with providing relief for a
major disaster-the threat of starvation as a result of
severely weather-damaged crops, for example-Mos-
cow could insist on a larger Soviet presence in Viet-
nam and perhaps greater use or even total control of
some military bases.
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