The emergence of a united Viet Nam in 1975, seemingly against all the odds and not without some 40 years of constant war and struggle, must have at last presented to its political leaders the certain opportunity for the country to progress and achieve the ideal of a socialist economy, which in large part was what the fighting and struggle had been about. Viet Nam, accordingly, pursued that ideal. It largely resultcd in the control of all forms of production by the state. To further that economic development, Viet Nam forged links with Comecon, the East European economic community. However, within 10 years of forging that link ominous signs emerged of the likely economic collapse of the socialist communities involved in Comecon. In 1989 that proved to be the event. The "certain opportunity" fell away. Viet Nam was forced to change the vision and fashion another form of economy, that which its leaders continue to describe as a "socialist market" economy. There is a contradiction in the words of this redirected vision, a contradiction that impacts on the progress of economic and legal reform that Viet Nam has undertaken. Central to this reform has been the state-owned enterprise sector. In December 1993 the first insolvency legislation known in Vict Nam for more than 40 years was approved and has since bccomc part of the law. Although it applies to all forms ofcommercial enterprise, it is clear that the main reason for its enactment was to deal with undcr-pcrforming state enterprises. This article examines the background to the passage of that law, its nature and its effect.
I. Background
Nam Viet is the land of the southern Viet. The word "nam" means "south" and "Viet" is the namc that was given to a people of Mongolian origin who had migrated south to the northern part of what is now Viet Nam. It was first recognised in historical terms in about 200 BC when it was conquered by a * The author is an Australian lawycr who was rrtained by the World Bank during 1992-94 to assist the Vietnamese Government in the drafting of an insolvency law. Hr ih prrsently Robson Rliodes Senior Research Fellow at the Centre for Commercial Law Studies, Qucrn Mary and Westfield Collegr, LJniversity of London, teaching international and comparative insolvency law.