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public money Status Of Transition From Socialism

Vietnam is a country whose economy is evolving.  Its rapidly changing economy is facing significant alterations in the process of transition.  Vietnam is moving away from its current economy, which is a non-market socialist one, towards a market economy with a socialist orientation.  Vietnam is one of the poorest countries in the world with a Gross Domestic Product of only $300.  High levels of population along with the proper training will allow Vietnam to effectively use its number one resource, people.  Australia plays a key role in assisting Vietnam's economic growth and development through their aid programs.
Economic reforms are changing Vietnam from an agricultural rich economy to a service industry one.  Throughout the years, agriculture, as a percent of Gross national product, has decreased from year to year, while service and industrial are increasing.  This steady decline is because of the changing situation with its economy.  With this decrease, migration to cities and towns is usually normal, but not in this case, as Vietnam has stayed primarily rural.  The main agricultural cash crops in Vietnam are rice, coffee, cashews, corn potatoes rubber, soybean and tea.  Clothing, computers and electronics are a growing part of the economy as well.  Tourism is the largest industry in the service sector.
In Vietnam land sales are not permitted.  This is because of the communist rule, and the ownership of all land by the state.  During the current economic reform to a market system of economy, household farms have replace the once popular collective farms.  Land rights are guaranteed to the families for twenty years on farmland and fifty years for forestland.  Though the farmers can still not own land they do have the right to use it, rent it, inherit it, and well as claim it as collateral.
The changing economy has caused the industrial and service sectors to steadily expand.  With this increase, many  are being dominated by state owned industries.
Along with the escalating change towards a market economy, competition within the private sector has also risen due to the fact that state owned enterprises are increasing as well.  If these state owned enterprises were private then economic efficiency would be increased as well.  This in turn would benefit the Vietnam economy and people.  The government has instated rules so this can happen.  They have also forced the state owned enterprises to be self- sufficient.  They are now highly self-sufficient.  They are self-run, determine what their production inputs and outputs are, and are responsible for the financing and accounting of their firm.  Though they seem to be individual entities, the government still has a strong hold on them because the governments has complete ownership of the firm, even though there are shareholders.  
With the institution of Doi Moi the economy of Vietnam has experienced a very strong growth.  The past decade the Gross Domestic Product averaged 7.5%.  Throughout the most recent years the growth has not been as severe but still positive.  It was gaining strength as 2000 began but has been slowing down.  There is still a positive growth but not as significant as in the mid 90s.  See following chart for the Real GDP Growth in %.



Towards the end of the 90s many factors accounted for this slow down.  Economics reforms were slowing as well.  State owned enterprises and banks were becoming inefficient as well. This, along with a decrease in demand and consumption, a decrease in foreign and local investing, as well as a decrease in outputs all contributed to the slow down in economic growth.  So, as this slow down became evident, changes needed were made in order to increase the GDP.  In the year 2000, certain things happened which did in fact raise the growth in real GDP.  The world economy was growing and manufacturing and commodity prices were improving as well.  Along with a rapid growth in the industrial sector as well as the non-state sector Vietnam was able to recover from a slowing GDP growth quickly.
In order to accelerate the economic growth more and reduce the poverty, which seems to be plaguing the country, the Vietnam Government installed Doi Moi reforms.  This process was accelerated by the collapse of the Soviet Union, formerly Vietnam's ... more

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Social Security

Social Security is a hot topic of debate today, since most American's believe
that the system is near collapse. The trust fund that Americans have been paying
into for Social Security is likely to dry up in 2029 due to the large number of
baby boomers heading into retirement. Franklin Roosevelt set up Social security
to help the people that had worked and Struggled all their lives in honest toil.
Social security was set up to accomplish two main goals. The first goal of
Social Security is to act as a disability or life insurance policy that protects
almost all Americans. Currently, there are seven million survivors of deceased
workers and four million disabled Americans that receive income support from
Social Security. The second goal is to provide lifetime retirement benefits that
rise with inflation. Social Security payments for retirees are needed to keep
half of the elderly Americans above the poverty line. A large number of baby
boomers believe that they won't see a dime's worth of Social Security benefits,
and most younger people assume that once they have reached retirement the
program will be gone. There have been many proposed solutions to the Social
Security problem. A first possible solution is to dramatically change the Social
Security Payroll Tax. Another proposal is to change amount of benefits of the
provided by Social Security. A third reform proposal includes investing Social
Security money in stocks either by the government investing the money or by
setting up mandatory IRA investing. Another major development in the future of
Social Security is the recent proposals made by President Clinton's Advisory
Committee on Social Security. In January of this year the Advisory Committee on
Social Security presented a report of strategies to save Social Security.
Shortly after the 261 page report was released there was a huge increase of
debates and criticism over the future of Social Security. The issue facing
American today is when and how to reform Social Security. Although the American
public and political groups are unwilling to accept the burdens of social
security reform, extensive reform is needed soon to continue paying the current
benefits to American citizens. A change in the Social Security tax is a possible
factor of reform to bring the Social Security program back on track. Currently
the Social Security tax is a flat-rate tax paid on all employment earnings up to
a specified limit. Due to inflation the limit is increased every year currently
it is just over $60,000. This tax is much harder on a lower income individual
because the higher income individual is only taxed on their income that is below
a certain amount set every year. It has been proposed that if the limit on the
payroll tax were lifted, two-thirds of the projected Social Security deficit
would be eliminated. Once the limit on the payroll tax is lifted a rise in the
tax rate of the employers and the employees by 1.1% is predicted to be enough to
solve Social Security's problems. This is assuming that two evasive actions take
place. First the government will have to keep its hands of this extra tax
revenue gained by the tax increases. Second the proposed solution will only have
a chance to work if it is started immediately while the baby boomers are still
able to add a little more cash to the trust fund for there own retirement. This
solution isn't likely to be implemented by today's political system. The
advisory council on Social Security would not pursue the lift of the limit
because the support of the wealthy voters for Social Security reform would be
lost. Americans are also weary of Social Security tax increases. The middle and
lower class voters would also not support a Social Security tax increase. A
recent poll by Money magazine found that 70% of the public is unwilling to pay
more tax than the current 6.2% rate. Another proposed solution to Social
Security's problems is a to decrease the amount of benefits received by
retirees. The first way to reduce the amount of benefits that are being paid out
is to adjust the CPI. Sen. Daniel Monynihan of New York (Dem.) has proposed that
a 1.1% cut in annual cost-of-living adjustments for pensioners would be a
reasonable solution to Social Securities problems. The adjustment of the CPI
would reflect the belief by many economists that the CPI overstates current
inflation. He claims that this would almost completely solve the problems in the
Social Security program by insuring that the expected inflow ... more

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