A textile factory
Subsidy period (Vietnamese: Thời bao cấp) is a way to say the Indochinese period of 1977-88, of which changed itself from an market-oriented economy to the planned economy, a feature of any Socialist countries at that time. The private sector was changed to the mixed sector (or autonomous collectives), with the state sector became increasingly dominant. Although it was partially implemented in state sectors during the period of 1956-76, it was only officially implemented from 1977 as the alarming indications for a future war at the northern border is inevitable. It is also marked with mass militarization and modernization of the army, with the Naval Forces became increasingly "professionalized" for a large-scale naval war.
At this period, the demand was changed from the light industry to defence industry, with production increased drastically for the latter sector to prepare for a future war. Agricultural productivity per capita was slowly increased thanks to the continuance of the "Green Revolution" despite the fast growing of the population. The "household registration system" was formed to keep a tight surveiliance on its' citizens. Five-year Plans were fully implemented, with specific quotas on every sectors, somewhat resembling the first two Five Year Plans of the Soviet Union, signaling the continuance of the mass industrialization. Free market was heavily restricted, with trade reduced to a more secret, insecure black market.
Background
The booming of the Indochinese economy was continued thanks to the efficient budgetary investment and labour discipline. However, it was, still an agricultural-dependent economy (of which 35% of it still dependent on the agriculture and its' related sectors). Ambitious economical projects were continued at this time, with the most successful ones were the Son La Dam and Hoa Binh Dam, of which could capable of fulfilling demand of electricity for all Indochina. Infrastructure projects were also successful, with the recovery of Trans-Indochinese railways (including smaller railways) was faster than expected (7 years instead of 10 years).
While Lê Duẩn, Kaysone Phomvihane, So Phim, General Võ Nguyên Giáp and others (the moderate reformist) wanted to remained the mixed economy to develop socialism, the "slient majority" faction led by Nouhak Phoumsavanh wanted to introduce the centrally-planned economy to bolster Indochinese industrialization, which was necessary for the development for a strong Indochina. While the economic growth during the period 1973-77 was still fast, about 8% in average, it was a huge slowdown compare to 12% during the period of 1966-72. And in order to fulfill the demand of industrialization, a 10% economic growth was needed, as it was said in the Second and Third Five-Year Plan. This was a great chance for the conservative group to obtain a greater power amongst the central committee.
At the 7th Congress of the Socialist Party of Indochina in 1976, while the reformers retained their seats in the Politburo, the conservatives rose unexpectedly with the appointment of Nouhak Phoumsavanh as the President of the Republic, the nominally second-ranked position in the Politburo. The Resolution of the Congress also took a more conservative stance, of which emphasize the collective leadership of the people in economy, and in national policy. This could be obtained by implementing Hungarian reforms (Kadarism), of which nominally collectivize the economy, while de facto let the private sectors remained intact under the name of the state.
Changes
Economy
The resolution of the 7th Congress was adopted. Therefore, it would officially took a new line towards socialism, without using market economy as a base, into forming "a concentrated, efficient economy", which later to be known as centrally-planned economy. However, unlike the Soviet-type central planning, the Socialist Party of Indochina adopted the Hungarian version of economic planning, of which allows some sector of the economy to form its' own planning (such as consumer goods, food industry). The slogan "Faster, stronger and more stable in our roads to socialism" remained, while "Be educated, work hard and be successful in life" was removed after its' personalist tendencies.
The Ministry of Planning and Investment, although opposed Phoumsavanh's plans in the plenum, but due to the faction's strength in the Central Committee, it was submissive. There was two options: an immediate plan for implementing centrally-planned economy or a 10-year plan. The immediate plan would increase the industrialization rate but would be considered unsuitable for the agriculture, while the 10-year plan might slowered the rated of the industrialization but would be adaptable for the agriculture. It was agreed that the 10-year plan would be more suitable for nation development while not hampered the industrialization plan.
Agriculture
At the 7th Congress, the resolution was more concern of forming collectives, as it was one of the most important part to form a Soviet-style socialism. It was known by the people before the Congress that there would be a forced, large-scale collectivizations in the future. Nouhak Phoumsavanh wanted to concentrated on state dominance of the economy (could be compared to the Soviet intervention of all sectors of the economy). However, it was opposed by the majority of the Politburo and the Secretariat, therefore a compromise on the economy was needed. A simillar policy compared to the NEP (New Economic Policy) was implemented, of which specified when a small-scale (maximum of 20 people) private business was big enough (monthly about 160,000 Indochinese piastres in 1977, or 31 million Indochinese piastres in 2021), it would joined the autonomous collectives (maximum of 500 people), which retained the rights of profit.