Silviase/jgov_v1.4_full_ann huggingface dataset:
Table 2-III-7 National Budget of Lao PDR (unit: Million Kips)

1987	1990(forecast)
26,536	133,919
14,804	67,839
[Budget Expenditure]	4,760	35,439
1. Current Expenditure	9,875	23,150
1.1 Wages and Salaries	45	4,850
1.2 Materials and Supplies	124	4,400
1.3 Annuity	11,732	66,080
1.4 Accrued expenses	780	3,146
2. Capital Expenditure	714	851
2.1 Education	1,993	8,696
2.2 Health	1,208	18,535
2.3 Agriculture and forestry	4,491	29,126
2.4 Industry, energy and mines	442
2.5 Transportation and communications	654
2.6 Commerce and cooperatives	1,450	5,726
2.7 Public works	20,156	79,301
2.8 Others	18,503	60,961
[Budget Revenue]	1,755	37,644
1. Tax Revenue, Nontax Revenue	195	7,956
1.1 Tax Revenue	14	234
1.1.1 Tax on industrial and Commercial profits	450	1,520
1.1.2 Tax on Wages and Salaries	10	1,160
1.1.3 Agricultural tax	870	7,145
1.1.4 Business licence	197	18,035
1.1.5 Turnover tax	146	5,364
1.1.6 Tax on international trade	51	12,671
A. Import tax	19	1,594
B. Export tax	0
1.1.7 Others	16,748	23,316
1.1.8 Commodity tax	13,890	0
1.2 Nontax Revenue	1,050	4,589
1.2.1 Transfer from state enterprises	1,808	12,427
1.2.2 Accumulated depreciation	6,300
1.2.3 Others	1,653	18,340
1.2.4 Charge of lease
2. Assistance without compensation (except material assistance)	-6,380	-54,618
[Overall Balance]	6,380	54,618
[Cover of Financial Deficit]	211	6,217
1. Loan from within country	211	4,312
1.1 Loan from bank	1,905
1.2 Loan from except bank	6,591	48,401
2. Foreign assistance with compensation (net)	7,379	52,811
2.1 Project, Program assistance with compensation (gross)	-788	-4,410
2.2 Yearly installment repayment

Source: Raosu no Shinkeizai Mekanizumu - Toriren Kokufuku, 1993
Chart 2-III-1 Overall surplus/deficit

Chart 2-III-2 Trade Balance

Source : Key Indications of Developing Asian and Pacific Countries, ADB
1 Start of the Transition to a Market Economy

1-1 A Way to the Transition to a Market Economy

## 1 -1-1 Geographical Features

Mongolia was the second oldest communist country after the former Soviet Union. It is a landlocked country located in Central Asia, bordered by the Russian Federation to the north and northwest, and China to the southeast and southwest. It has a total area of 1.6 million square kilometers, about four times the size of Japan, with a total population 2.2 million. Population density, at 1.3 persons per square kilometer, is one of the lowest in the world.

## 1 -1-2 Foreign Relations

There was a brief period in the 1950s and early 1960s when Mongolia maintained a friendly relationship with China as well as with the former Soviet Union. However, the socialist-fraternal relationship with China, which began in 1949, became severely strained after the 1960s, when Mongolia took a pro-Soviet stance in the Sino-Soviet border and ideological disputes. Mongolia thus became even more closely allied with the former Soviet Union. After that, the relationship with China deeply deteriorated through the Great Proletarian Cultural Revolution and the former Soviet Union's criticism against the top party officials of China. But as reform and open door policies were developed in China after 1979, the relationship between Mongolia and China improved little by little. On the other hand, Mongolia has been closely related with the former Soviet Union since the Mongolian Revolution. The deterioration in China-former Soviet Union relations in the 1960s strengthened economic and political links between Mongolia and the former Soviet Union. Mongolia joined the Council for Mutual Economic Assistance (COMECON, CMEA) in 1962. Until 1991, when COMECON was dissolved, its foreign economic relations were closely integrated with, and dependent on, this group. With the advent of “perestroika” in the former Soviet Union and the development of normalizing Sino-Soviet relations, Mongolia's political, economical, diplomatic, and socio-cultural milieus have been transforming. After 1989, the country's international orientation has dramatically shifted from COMECON toward China, East Asia and the West. In January 1992, when the constitution was amended drastically.

## 1 -1-3 Development of the Command Economy

After World War II, the shift toward a command economy intensified, and development proceeded on the basic of five-year plans, starting from 1948. In the First Plan (1948-52), policies with overriding priority were agriculture and stock raising, and measures were introduced to prepare the private herdsmen for the collectivization of livestock and private property. Private ownership of livestock was formally restricted, and all production was reserved for the state. The main production units in agriculture were integrated to agricultural cooperatives (negdels) and state farms. At the same time, emphasis was placed on light industries, meat processing industries production of consumer goods, coal mining and the energy sector. After the Fourth Plan (1966-70), assistance from China was halted; conse-
began to deteriorate rapidly. First, due to its own domestic economic difficulties financial and technical support from the former Soviet Union was terminated in 1991. Second, the COMECON system, on which Mongolia was so dependent, collapsed in the same year resulting in a severe disruption of external trade.

## 2 -1 Financial Reform

As explained earlier, in the past the budget deficit was entirely financed by COMECON aid, mostly from the former Soviet Union. But the financial situation deteriorated rapidly after the second half of the 1980s. Import prices went up, but domestic prices remained unchanged; reducing budgetary expenditures was not sufficient. In 1988, the budget deficit as a share of GDP increased to 20.5 percent. Behind these problems, the tax structure and subsidy system have their own problems.

## 2 -1-1 Revenue

The two major sources of revenue were profit taxes from state-owned enterprises arising from the fixed price structure and import price differentials, deriving from the wide disparity between import and domestic prices for consumer goods, many of which are imported. In the second half of 1980s the former Soviet Union raised export prices, causing import prices to jump in Mongolia. This meant that import price differentials decreased, while profits from state-owned enterprises stagnated. Individual tax rates were low, its share of total revenue was small, and the tax collection system was insufficient.

## 2 -1-2 Expenditure

State budget expenditure consists of the current expenditures, which include wages, subsidies, social security, defense, capital investment, etc. Various kinds of subsidies, covering the deficit of state-owned enterprises and the increase of capital investment caused by the 8th five-year plan starting from 1986 led to the large fiscal deficit. It became apparent that the tax system needed to be completely restructured. A price-rigged, profit-transfer system has no place in a market economy. The traditionally dominant “turnover tax” would need to be restructured as a value-added tax. The “import-price differentials” which were previously collected through state-owned enterprises would become irrelevant. A completely new system was targeted for introduction in 1992. These included administrative strengthening over both revenue collection and expenditures, a review of the structure of government to identify areas for further possible cuts, and the holding of wage and salary increases below the rate of inflation. Additional measures under consideration to strengthen both sides of the budget include the introduction of user fees and increased charges for public services; and, for education and health services, cost recovery through a proposed national health program financed by contributions from employers and employees.

## 2 -2 Monetary Reform

Until 1991, Mongolia had a monobank system: all central and commercial banking activities were carried out by the State Bank of Mongolia. In May 1991, under a new Banking Law, the State Bank was divided into a central bank, called the Bank of Mongolia (or
and tax incentives, guarantees and protection measures, and the existence of investment promotion zones. The New Foreign Investment Law went into effect in July 1993. In this law, foreign investors were given the same rights compared with Mongolian enterprises, along with incentives of tax and remittances to overseas countries. An announcement was made in February 1991 of the government's intent to establish "free customs (economic) zones" for the purpose of promoting "border trade." Although little progress was made, the approach may conceivably become the first step in establishing Mongolia as a trading center for Central Asia. The four announced sites are as follows (three are near-border towns, one is the second largest city in Mongolia):

(1) Dolnod (east area of Mongolia)

(2) Zamyn-uud (near the Chinese border)

(3) Suknbaatar (near the Russian border)

(4) Darkhan (the second largest city)

3 Lessons, Unfinished Agendas

3-1 Recent Economic Development

## 3 -1-1 Current Trends in the Major Economic Sectors

## (1) Agriculture

The agricultural sector employs approximately 30 percent of labor force, and produces 20 percent of GDP. Within agriculture, 70 percent of net product derives from livestock production, while 30 percent derives from land cultivation. The economic crisis has been strongly felt in the agricultural sector. Due to the decrease of cultivation areas caused by the privatization program, lack of seed and fertilizers, lack of fuel and farm equipment, and because of cold weather, crop production has fallen. On the other hand, the fact that the number of newly born livestock shows a 12.4 percent increase in the first half of 1993 should be interpreted with caution. First, the increase in the number of livestock can easily be accounted for by reductions of exports of meat and other animal products to the former Soviet Union; second, climatic conditions (for example a heavy snowfall in March 1993) are well known to affect the number of livestock in very significant ways.

## (2) Industry

Industry employs around 26 percent of the labor force and accounts for nearly 33 percent of GDP. Due to the foreign exchange resulted in the shortages of imported raw materials and spare parts, almost all factories are currently operating well below capacity; in some cases, production has stopped altogether. Reduced coal production has curtailed electricity supply and heat generation. But the production of copper and molybdenum, which accounted for over 50 percent of exports in 1991, increased as compared with the previous year, and is a good magnet for acquiring foreign currency. In light industry, the production of wool, leather jackets, matches, candles and confectionery has changed for the better. The construction sector has suffered from many of the same problems as the industrial sector. The value of construction and maintenance work in 1992 was 65.8 percent lower than the previous year.

## (3) Other (service sector)

This sector employs around 44 percent of the labor force and accounts for nearly 41 percent of GDP. The total value of freight transported fell by 30.5 percent compared to 1991,
tions was played a crucial role in overcoming the critical situation in Mongolia, particularly in financing essential import needs and in further stabilizing the economy.

## 3 -1-5 Actual Condition of Infrastructure

## (1) Electricity

Electricity, generated with domestically mined coal and imported diesel fuel, is the principal source of energy in Mongolia. Industry accounted for 90 percent of total electricity consumption and residential and office use consuming the rest. In 1993, electricity production fell by 12.3 percent compared with the previous year. This has been the result of breakdowns arising from plant obsolescence, and from difficulties encountered in obtaining spare parts and fuel from Russia due to a lack of hard currency. Overhaul and upgrading of existing power plants and distribution networks are needed to reduce inefficiency and pollution and to improve conservation.

## (2) Railways

The railway is a Mongolia-former Soviet Union joint venture with equal ownership. It has about 1,800 kilometers of rail line. Rail transport played a significant role in foreign trade and economic relations, but encountered the following problems. The gauge is the same as in Russia, but wider than in China. Soviet-made locomotives and wagons are comprised of rolling stock. Repairs used to be made in Soviet facilities but are now carried out in ill-equipped depots in Mongolia. Spare parts and fuels, imported from the former Soviet Union, are in short supply. Signaling and telecommunication systems are insufficient.

## (3) Road Transport

Mongolia’s road system is relatively undeveloped. Despite its large territory, Mongolia has only 49,000 kilometers of roads, of which only 3 percent are paved; most are in poor condition. Road transport accounts for approximately 70 percent of freight tonnage. It has been estimated that poor road conditions raise transport costs. In addition, motorized vehicles total only 40,000 units, of which many are antiquated, inefficient, or idle for lack of spare parts.

## (4) Air Transport

Mongolia’s extensive domestic air transport network links major population centers throughout the country. But runways and ground equipment are outdated. A system of receiving international aircraft, and the monitoring and navigation of flights via through Mongolian territory will have to be created and conform to world aviation standards. International and domestic airports will be built or renewed. Runways and ground equipment will also be rebuilt to world standards.

## (5) Telecommunications

Mongolia’s telecommunications system requires substantial overhaul and expansion to enable it to meet demand and play a proper role in the transformation to a market economy. Most of the communication equipment is outdated, having been imported from the former Soviet Union during the 1960s and 1970s. As a result, the quality of long distance and international telephone services is not satisfactory and the availability of telex, facsimile, data transmission and value added services are limited. The telephone density was 3.4 telephones per 100 persons in 1991. However, new telephone lines, satellite connections and
in installing an entirely new system to replace the second-oldest socialist system. The damage had already been done by the chaos caused by the external shocks. (Tsunekawa)
## REFERENCES

Asian Development Bank, “Key Indicators of Development: Asian and Pacific Countries,” 1993

Elizabeth Milne, John Leimone, Frank Rozwadowski, and Padej Sukachevin, “The Mongolian People’s Republic : Toward a Market Economy,” IMF, April 1991

Hirono Ryokichi, “Mongolia’s Struggle to Create a Market Economy,” Japan Review of International Affairs, Vol.6, No.2 1992

Koibuchi, Shin-ichi, Masumasu Konmei suru Shinsei Mongoru no Kunizukuri, Sekai Shuhou 1993.10.5

Kurokawa, Yuji, Reconstruction of Mongolian Industries, May 1993

Lkhagvagiin Demberel, “Economic Reforms in Mongolia,” EPA Working Paper, No.33, March 1994

Mongolia, Central Statistical Office, “National Economy of the MPR for 70 Years, 1921-91,” 1991

Mongolian Government, “Current Situation of Mongolian Economic and Prioritiet Sectors”

Research Institute of Overseas Investment, The Export-Import Bank of Japan, Kaigai Toushi Kenkyuushou, October 1992

Sambugin Demberel, “Some Theoretico-empirical Aspects of a Transition Economy,” EPA Working Paper, No.34, March 1994

Shinagawa, Satoru, “Keikakukeizai karano Ikou o hakaru Mongoru,” The OECF Research Quarterly, No.78 1993/6

UNDP, “Development Cooperation : Mongolia,” July 1992

World Bank, “Mongolia : Toward a Market Economy,” World Bank, September 1992

------, “Mongolia, Country Economic Memorandum, Toward a Market Economy,” December 1991

Yasuda, Osamu, “Mongoru : Shijokeizai eno Ikou ni Kuno suru Sogen no Kuni,” Economist 1994.1.25

Young C. Kim, “The Mongolian Economy : Its Hyper -Socialist Past and Ongoing Radical Transformation,” Northern Illinois University, December 1991
Table 2-IV-1 The Economic Reform Chronology of MONGOLIA

Price	Finance	Monetary	Enterprise	Agriculture	Exchange	Trade/Investment
1989	Wage system reform
1990	Privatization of livestock	Foreign investment law
1991	Price liberalization (1) Price liberalization (2)	Financial reform Tax law Reduction of subsidies	New banking law Independence of central bank Establishment of commercial bank	Privatization of state-owned enterprises Bankruptcy law Antitrust law	Privatization of agricultural cooperatives	Customs duty law
1992	Price liberalization (3) Price liberalization (4)	Abolition of subsidies	Establishment of stock exchange	Unification of foreign exchange rate
1993	Price liberalization (5) Abolition of ration system	New tax law	Floating exchange rate system	New foreign investment law
Table 2-IV-2

Origin of Imports and Destination of Exports

(in percent of total at current prices)

1970	1980	1985	1988	1989	1990	1991	1992 (1-5)
Exports	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Socialist or Former	98.2	98.4	96.1	94.3	93.1	94.2	91.7	76.6
Socialist countries
CMEA countries	93.5	96.5	94.4	92.0	90.3	90.0	-	-
of which : FSU	-	79.4	77.0	75.6	73.2	-	-	-
Nonsocialist countries	1.8	1.6	3.9	5.7	6.9	5.8	8.3	23.4
Industrial countries	-	-	-	5.4	6.7	5.6	-	-
Developing countries	-	-	-	0.2	0.2	0.2	-	-
Imports	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Socialist or Former	99.2	98.5	99.0	97.9	95.6	91.6	83.2	50.0
Socialist countries
CMEA countries	96.9	96.8	97.5	95.7	92.5	87.7	-	-
of which : FSU	-	85.8	86.9	85.0	82.8	-	-	-
Nonsocialist countries	0.8	1.5	1.0	2.1	4.4	8.4	16.8	50.0
Industrial countries	-	-	-	2.1	4.1	7.9	-	-
Developing countries	-	-	-	0.0	0.3	0.5	-	-
(in percent of total at current prices)

Source : "Mongolia, Toward a Market Economy" A World Bank Country Study
Table 2-IV-3

Composition of Exports to and Imports from Socialist Countries

1970	1980	1985	1987	1988	1989	1990
Exports	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Foods tuffs	9.6	19.0	9.4	10.6	8.1	8.7	6.6
Consumer goods	5.9	9.6	16.8	15.8	15.7	17.5	20.0
Fuels, mineral and metals	5.4	26.4	42.2	39.7	41.7	42.8	49.7
Chemicals	0.0	-	-	-	0.1	-	0.6
Building materials	0.9	0.4	0.7	4.5	3.4	4.0	3.9
Agricultural goods	19.5	13.4	6.1	7.6	8.1	6.5	5.3
Others	58.7	31.2	24.8	21.8	22.9	20.5	13.9
Imports	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Fuels, mineral and metals	12.8	24.1	28.7	30.8	33.5	27.3	27.2
Consumer goods	36.3	20.9	17.2	18.4	18.5	21.9	21.6
Chemicals	5.1	6.3	5.9	6.1	5.6	6.3	5.3
Agricultural goods	-	-	-	0.1	0.2	0.1	0.0
Engineering goods	25.9	33.1	36.3	32.2	30.2	29.6	31.1
Others	19.9	15.6	11.9	12.4	12.0	14.8	14.8

Source : “Mongolia, Toward a Market Economy” A World Bank Country Study

Table 2-IV-4

Composition of Exports to and Imports from Nonsocialist Countries

(in percent of total at current prices)
1970	1980	1985	1987	1988	1989	1990
Exports	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Foods tuffs	-	-	0.0	0.5	-	-	0.1
Consumer goods	-	2.2	2.3	6.0	5.8	5.5	35.5
Fuels, mineral and metals	-	-	-	-	-	-	7.9
Raw materials	100.0	97.8	97.7	93.5	94.2	94.2	55.9
Others	-	-	-	-	-	0.3	0.6
Imports	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Fuels, mineral and metals	-	0.3	3.9	13.3	11.6	8.2	10.6
Consumer goods	33.3	33.4	5.3	5.3	5.1	20.3	24.8
Chemicals	55.5	14.0	17.1	12.4	12.3	13.9	14.0
Raw materials	-	1.3	30.3	21.2	21.3	19.3	9.3
Others	11.2	51.0	43.4	47.8	49.7	38.3	41.3

Source : "Mongolia, Toward a Market Economy" A World Bank Country Study
Table 2-IV-5

Private Sector Output

Sector	% of Total Output
Industry	43
Agriculture	99
Construction	46
Transport	66
Communication	0
Trade	64
Services	34

Source : Lkhagvagiin Demberel, “Economic Reforms in Mongolia”

Table 2-IV-6

Government Expenditures

(percent of GDP)
1970	1990	1991	1993
Total	65.4	64.1	57.1	32.9
Current	50.2	51.9	51.7	21.6
Wages	8.4	8.6	9.8	5.5
Goods and services	14.8	17.8	11.2	7.0
Subsidies and transfers	23.1	24.3	26.8	7.9
Others	3.9	1.2	3.9	1.2
Capital	15.2	12.2	5.4	11.3
By function	10.2	64.1	57.1	32.9
Education	10.2	11.3	10.1	5.3
Health	5.1	5.4	5.5	2.9
Defense	5.6	4.5	3.8	1.8
Security	1.3	1.0	2.5	1.3
Economic affairs	23.1	21.8	8.7	1.8
Social security	6.8	7.7	11.5	4.68
Others	13.8	12.4	15.0	15.2

Source : Lkhagvagiin Demberel, “Economic Reforms in Mongolia”
## Chapter V Vietnam

1 Process of the Transition in Vietnam

It is widely considered that Vietnamese economic reforms started with “Doi Moi (reform)” in 1986. And some may consider that “Doi Moi” started under the influence of “Perestroika,” considering the time relation between these two.

However, if you look at reforms in Vietnam a bit carefully you will find that the reform had started much earlier. As a matter of fact most of the contents of "Doi Moi" were already included in the "New Economic Policy" approved in 1979, and several measures which gave some autonomy to state enterprises and farmers were actually implemented in 1981 (see Table 2-V-1).

However, though the application of market mechanisms was stated in the “New Economic Policy,” those reforms went no further than the “reform within the framework of the planned system.” Although the autonomy of enterprises and farmers increased to some extent, the system itself did not change at all. The same thing applies to “Doi Moi”. Despite the announcement of “Doi Moi” policy, in reality almost nothing had been done in 1986 and 1987.

Actual “transition to a market economy” started around 1988-1989. Several measures were decisively implemented in this period. In particular, 1989 was remarkable with almost total price liberalization and the drastic stabilization of inflation. Several factors which caused the change can be pointed out; macroeconomic imbalances (hyper-inflation, huge budget deficits, trade imbalances, etc.) caused by halfway reform, direct and indirect pressures from the good performance of the neighboring Asian economies, the world-wide trend of transition to the market economy, etc.

Thus the process of reform in Vietnam can be summarized as follows.

1975 Unification of the North and South Vietnam

-1979 Collectivization

-1988 Reform within the Framework of the Planned System

(with some fluctuation)

1989-Transition to a Market Economy

An outline of the reforms in Vietnam is presented in section 2. An evaluation of the reforms is made in section 3 and 4. Section 3 mainly treats development-related aspects of reform, while section 4 treats the transitional aspects. Section 5 will present a conclusion synthesizing these two aspects of the reforms.

2 Summary of the Reforms

2-1 Fiscal Reform

2-1-1 Revenue

Before 1988, Vietnamese government revenue largely depended on transfers from state enterprises, accounting for three-quarters of the total revenue. Since 1989, its share has declined and the share of tax revenue has risen, as is clearly shown in Chart 2-V-1.

The decline in the transfer from state enterprises in 1989 reflects the deterioration in the