Thailand and Vietnam

by Varintip Sooppipat,

April 2002




Asia is the largest continent in the world, consisting of thirty-eight countries, which extends from Africa and Europe in the west to the Pacific Ocean in the east.  It includes both developed and developing counties such as Japan, Singapore and Taiwan.  It also includes both the wealthiest and poorest countries in the world such as Laos, Sri Lanka and Brunei.  Thailand and Vietnam are among the countries which are situated in Asia, with total population of 61,797,751 and 79,939,014, respectively.  The statistics in these two countries show that they are similar in many aspects; specifically, their religions, geography, climate, and natural resources.  However, the GDP per capita and economic performance of Vietnam still remains far below that of Thailand.  A closer look at the history, national identity and economic system of Thailand and Vietnam shows that it is due to the extent in which the government intervenes in the economic affairs in the country. 

 Thailand consists of 76 provinces, with Bangkok as its capital city.  The word “Thailand” means the “land of the free.”  It is located in Southeast Asia; with Burma, Laos, Malaysia and Cambodia at its borders.  Thailand was the only country that remained independent when other Southeast Asian countries were colonized by the European power.  It was known as Siam until May 11, 1939, when it changed its name to Thailand.  The dominant religions of Thailand are Buddhism, Muslim, Christianity and Hinduism.  The size of the country is 514,000 sq km.

Vietnam lies in Southeast Asia; with China, Laos, and Cambodia as its neighbors.  Vietnam consists of 58 provinces, with Hanoi as its capital city.  The country is shaped like the letter “S.”  Vietnam has as many as 60 different ethnic groups; the majorities are Vietnamese, follows by Chinese, Hmong, Thai, Khmer, Cham, and mountain groups.  The total area of Vietnam is 329,560 sq km.  The religions of Vietnam are Buddhists, Hoa Hao, Cao Dai, Christians and Muslims. 

Sukhothai, the first Thai kingdom, was found in 1238.  During this period, the Thai people had created great cultural development, and it is regarded as the golden age of Thai history.  A new dynasty led by king U-Thong established a new capital city, Ayutthaya, in 1350.  The Burmese invaded Ayutthaya several times, and the city fell into their hands for two years.  In 1769, Phaya Taksin, a Thai general, established a new capital at Thonburi and promoted himself to be the king.  After King Taksin’s death, King Buddha Yot Fa Chulalok (Rama I) moved the capital across the river to Bangkok, a small village not far from Ayutthaya.  King Rama I was the founder of the Chakri dynasty, which continues to rule Thailand to the present day.  King Bhumiphol, the present king of Thailand, is the longest reigning king of Thai history.  In fact, he is one of the longest presently reigning monarch in the world.






The early history of Vietnam began as the Chinese commander in South China, General Chao To, established a new kingdom of Nam Viet (South Viet) when the Chin dynasty collapsed in 206 B.C.  In the periods that followed until 1400s, Vietnam was conquered by the Chinese armies and became independent under their rules several times.  The Chinese conquest had a lot of influence on Vietnam in many aspects, such as political, cultural, religion, language, writing, art, and music.  In 39 A.D., a famous revolt was led by the Trung sisters, whom successfully drove out the Chinese rulers in Vietnam; however, the nation was reconquered several years later.  The Vietnamese force, led by general Ngo Quyen, drove out the Chinese invaders in 939 and established the independent state of Nam Viet with the capital at Co Loa.  Among the great dynasties of Vietnam includes the Ly dynasty (1009-1225), the most stable and strongest dynasties in Vietnamese history, the Tran dynasty(1225-1400), the Ho dynasty (1400-1428), the Le dynasty (1428-1776), during which the period is considered to be the golden period of Vietnam, the Trinh and Nguyen rules (1543-1776), when the nation was divided in half, and the Nguyen dynasty (1792-1883), when Vietnam was reunified.  In the later periods that followed, Vietnam was divided, invaded, and transformed into a Communist community in the north and Anti-Communist community in the south.  The French and Japanese had invaded the country, but the most significant remarks in the history of Vietnam was the Vietnam War that broke out in 1965 with the US and other countries.  In 1976, south Vietnam was reunited with north Vietnam and formed a new Socialist Republic of Vietnam.  In 1991, with the fall of Communism and the end of the Cold War, many western countries reestablished their relationship and trade with Vietnam

Songkran is the traditional Thai New Year and a chance for family members to reunite.  The festival falls on the 13th of April.  The word Songkran comes from the Sanskrit language meaning to “move into,” which refers to the orbit of the sun and marks the beginning of a new solar year.  The festival begins with early morning merit-making of food offering to Buddhist monks together with the releasing of caged birds and fish.  In addition, people will pay respect to the elders and pray for their ancestors.  In the afternoon, people will joyfully start splashing water on each other.  The tradition of water-throwing can range from a polite splash to water pistols or to water buckets.  Vehicles and people passing through the streets can expect to be wet on this occasion.  The water-throwing tradition is a way to refresh people from the hot weather of April.  There is also the “Miss Songkran” contests, which are held in many communities.  However, Songkran also has a significant meaning apart from refreshment—it is a time for people to be graceful for the acts of kindness each has experienced; a time to remember how such acts bring peace and happiness.  It is the process of cleaning and taking away misfortune and evil.


Tet Nguyen Dan or Tet is the Vietnamese New Year festival—the most important Vietnamese holiday.  It usually falls in late January or early February.  The word Tet Nguyen Dan means “fete of the first day”, which refers to the beginning of New Year on the lunar calendar.  The Vietnamese believe that the first day and first week of New Year will determine their luck for the rest of the year.  Tet is a time for family members to reunite and exchange gifts.  During Tet festival, all stores are closed and people get three consecutive holidays from work.  About a month before Tet, people start cleaning and painting their houses; while others exchange New Year’s cards and buy new clothes to wear on the first day of Tet.  People try to avoid argument, pay their debts, and perform good deeds.  They also try not to show anger and be rude to other people. Some people pay their visits to the temples and church to pray for good fortunes.  Family members gather to make the traditional rice pudding (Banh Chung) and fruit candies (Mut).  People usually do not cook during the three day period so they must prepare everything before the festival starts.  By ten o’clock on New Year’s Eve, everyone remain at home to wait for the clocks to strike midnight.  The Vietnamese believe that fireworks drive the evils away because it makes a lot of noise, so every house have fireworks attached to their front doors.  On the first day of New Year (Mong Mot Tet), both men and women wear a new traditional costume known as Ao Dai.  People will pay their visits to the most important person on the first day, which is a really important visit because it will reflect their luck and happiness in the future.  People pay their visits to the less important ones on the second and third day of Tet.  The traditional festival of Tet is still carried out strongly in the present as a reminder for people to perform good deeds and to be nice to others.

Thailand is a constitutional monarchy with a parliamentarian form of government.  The king does not interfere with the political sector, but he does have ultimate power over the government.  The parliament is composed of elected representatives and appointed senators.  The Prime Minister, the head of the state, is selected from among the members of the House of Representatives.  Thailand is a mixed economy country, where the government tries to encourage private ownership and decrease state enterprises.  Government only provides infrastructural support and maintenance for subways, railroads, public parks, airports, and highways—those that the private sector cannot provide and maintain by itself.  Government also has a very limited control over the private sector, which encourages further development by interfering as little as possible.  The government indirectly promotes economic efficiency through the laws.  Moreover, they also help the banking sector by supplying credits to the private banks.  In 2000, Thailand’s growth rate was 4.2% and GDP per capita was $6,700.  Thailand is a major exporter of rice, tapioca, frozen shrimp, textiles, integrated circuits, jewelries, and computer parts.  Thailand is the largest rice exporter in the world.  The US is the largest exports partner of Thailand; follows by Japan, Singapore, Hong Kong, Netherlands, Malaysia and UK.  The percentage of agriculture’s share in the GDP is 13%, industry’s share is 40% and services’ share is 47%.  The share of industry and services is increasing, while the share of agriculture is decreasing each year.   


With improved technology and freely operated market, Thailand’s growth rate continued to improve from 1985-1995.  The Gross Domestic Product remained at about 6.7% for 40 years since 1951.  The GDP increased to double-digit rate in the year 1985-1995 with an average of 9%.  Thailand was one of the world’s fastest growing economies before the Asian economic crises broke down in 1997.  Thai Baht, which remained at 25 per dollar for thirteen years rose to as high as 56.2 per dollar in 1998. The government had to allow the Baht to float freely in the market.  Fifty-six finance companies had to shut down because of their weaknesses and debt.  A number of Thai banks had to be sold to foreign investors.  In 1999, inflation struck the lowest rate in fifteen years at -1.2%, and trading was down from 23% to -.2% within a year.  The Board of Investment (BOI) had to revise the investment policy which includes speeding up the economy with investment, encouraging prosperity in rural areas, etc.  Thai banks had agreed to allow non-Thais to open bank account with only their passports or alien identification, a process which was impossible before.  Thailand entered the recovery stage in 1999, with growing foreign investment and real GDP increasing at 4.2% in 2000.  The growth rates will likely increase in 2002, which is due primarily to increased exports, tourism and agriculture.

Vietnam is a Communist state with a President as the Chief of State and a Prime Minister as the head of the government.  Decisions are made by the Political Bureau, who enacts the legislation.  The National Assembly has the highest legislative authority.  In 1986, Vietnam launched an economic reform program called Doi Moi (Renovation) during its Sixth National Congress.  This program has shifted Vietnam from a centrally planned economy to a market economy with socialist orientation.  The state is ruled by the Communist Party of Vietnam.  The reforms legalized private ownership, promote export and import sector and established foreign investment regulations.  From 1987 to 1991, Vietnamese economy grew at an average rate of 3.7% and is still growing at an average of 7.5% from 1991-2000.  Trade increased to $6.3 billion in 1993 and foreign investment increased rapidly.  Vietnam is transforming from an agricultural economy to an industrial and services economy.  The percentage of agriculture’s share in the total output is decreasing from 41% in 1991 to 25.8% in 1999, while the industrial and services’ share is increasing from 59% in 1991 to 74.2% in 1999.  In 2000, Vietnam’s growth rate is 5.5% and GDP per capita is $1,950.  Vietnam exports commodities such as crude oil, marine products, rice, rubber, tea, and shoes.  Vietnam has become one of the largest exporters of rice.  Its trading partners are China, Japan, Germany, Australia, US, France, Singapore, UK, Taiwan, South Korea, Indonesia, Thailand, Hong Kong, Malaysia and Sweden.  The percentage of share in the GDP for agriculture, industry and services are 25%, 35%, and 40%, respectively.


Apart from the gains that Vietnamese people have earned from the Doi Moi reforms, they still incurred problems because of the socialist orientation under state intervention.  The state still indirectly plays an important role in managing the enterprises.  For example, all land is owned by the state, so it is impossible for anyone to sell and own land in Vietnam.  However, they have the right to use, inherit, and rent out the land.  They are also permitted to use the land for farming, with land rights guarantee for at least twenty years.  The industrial and services sector is still dominated by the state.  Agriculture is mostly private owned, but are usually small-scale enterprises.  The growth in export and in employment is largely dependent on agriculture.  The gap between the rich and the poor has widened, and the majority of the population, approximately 78%, still lives in rural areas.  The state still owned big enterprises, and competition with the state-owned enterprises is impossible.   The state share of GDP still remains high at 38%. 37% of the population is below poverty line.       Vietnam still remains a country with GDP per capita among the lowest in the world.

The population of Thailand has reached 61,797,751 in 2001, of which 32.6 million are in the labor force.  Of all the population in the whole kingdom, 23.43% are under 15, 69.95% are between 15-64 years, and 6.62% are 65 years and older.  The majority of the workforce is under 30 years of age.  Approximately, 800,000 people join the work force each year.  The literacy rate in 2001 is approximately 93.8%, of which 96% of male are literates and 91.6% of female are literates.  The minimum wage in Thailand is 165 Baht per day (US$3.71) in Bangkok, and between 130-140 Baht (US$2.92-3.15) in the provinces.  Since Thailand is an agriculture-based country, the majority of the workforce is concentrated in the agriculture area.  Among the employed workforce, 54% are in agriculture production, 15% are in industry, and 31% are in services area.  The government tries to carry out training programs to help training the labors.  For people who live in rural areas in general, the parents usually give their children the tasks of feeding and taking care of the animals, and helping to grind rice when they are old enough.  When they reach the age of fifteen, they are ready to do full-time jobs.  Women usually are given the tasks of taking care of the households and the children, and help planting and grinding the rice.  Both the employers and employees in Thai enterprises should treat each other with respect and the employers must be responsible for his employees’ well-being.  The maximum work hour per week is 48 hours for industrial work, 42 hours for hazardous work, and 54 hours for commercial and office work.  Currently, the unemployment rate in Thailand is 3.7%, which is largely an urban area problem.  A number of people from rural areas are migrating to Bangkok each year, and the number is increasing constantly.  The main reason for urban migration is largely due to higher wages and greater opportunities in Bangkok.


Among the Vietnam’s population of 79,939,014, 38.2 million are in the labor force.  The majority of those who are in the workforce are between the ages of 24-44.  Approximately, 1.1-1.3 million people enter the work force each year.  The government carries out training programs throughout Vietnam to help train the workers for agriculture, industrial, and services jobs.  Priority for Vietnamese employees is required for foreign investors when employing new workers.  In 2001, the literacy rate is approximately 93.7%.  The minimum wage in Hanoi and Ho Chi Minh City is $45 per month, and $35-$40 per month in other provinces such as Hai Phong and Da Nang.  The enterprises owned by the state generally pay above the monthly minimum wage by $13.  A lot of employed workers are in agricultural sector.  Of all the labor force in Vietnam, 67% are in agricultural sector and 33% are in industry and services sector.  Employers are required to set up labor unions within 6 month of establishing the company.  The usual working hours for Vietnamese workers are 8 hours per day and 40 hours per week.  Women are allowed a paid maternity leave of 3 months.  A lot of employed workers are still concentrated in rural areas.

Without looking at the economic system in Thailand and Vietnam, these two countries are very similar in many areas.  They are both very influential by the Chinese people, due to the fact that a lot of Chinese have migrated to both countries.  In addition, the majority of people in Thailand and Vietnam are Buddhists, and both of these countries value Buddhism greatly.  The festival of Songkran in Thailand and Tet in Vietnam are both influenced by Buddhism.  People of both countries considered it their great priority to visit the Buddhist temples during the festivals and other important occasions.  Thailand and Vietnam are situated very close to the equator, which makes the climate hot all year long.  This also results in many similarities such as food, natural resources, and agricultural products.  Apart from the similarities are the differences in their economic system.  The economic performance in Vietnam is not as efficient as in Thailand, due to the fact that it was formerly a Communist State.  The transition from a Communist State with public ownership to a market system with private ownership will be difficult.  Vietnam still has to issue more reform movements to do better economically.  Their reform to reestablish the relationship with other non-Communist countries was a good start to the transitions.  On the other hand, Thailand still has to recover from the 1997 crisis.  Thailand still has to take some time before it can perform as well as the past.  If they continue to increase trades, foreign investments, tourism, and industries, the economy will surely be better in the near future.



  Works Cited

Beresford, Melanie.  Vietnam: Politics, economics and Society.  London: Pinter  Publishers, 1988.    

Chadchaidee, Thanapol.  Essays on Thailand.  Bangkok: Thanapol Vittayakarn, 1994.

Duiker, William J.  Vietnam: Nation in Revolution.  Colorado: Westview, 1983.

Henderson, John w. , et al.  Area Handbook for Thailand.  Washington, D.C.: US Government Printing Office Washington, 1971.

Kolko, Gabriel.  Vietnam: Anatomy of a Peace.  London and New York: Routledge, 1997.

Kulick, Elliot, and Dick Wilson.  Thailand’s Turn: Profile of a New Dragon.  New York:  St. Martin’s, 1992.

Turley, William S., and Mark Selden.  Reinventing Vietnamese Socialism:    Doi Moi in Comparative Perspective.  San Francisco: Westview, 1993.

Asia Business Network. CompanyLongName. 11 May. 1998  Economy Vietnam.  14 Apr. 2002 <>.

The Character and Structure of the Economy.  The National Identity Office under the Office of the Prime Minister, Royal Thai Government, 1995-1996.  3 Oct.  1997 Mahidol University.  8 Apr. 2002


Economy.  Embassy of Vietnam.  Economic Overview.  8 Apr. 2002

Vietnamese Culture.  Vietmedia.  Vietnamese New Year.  14 Apr. 2002

The World Fact Book 2001.  Thailand and Vietnam.  Jan. 2001.  CIA.  8 Apr. 2002 <





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