Vietnamese Communist Party leader Nguyen Van Linh said his country's economy has "collapsed" as a result of huge government subsidies for poorly managed state enterprises and cooperatives.
"The national economy has collapsed largely because the situation of fake profits and true losses has prevailed," the official Radio Hanoi quoted Linh, secretary general of the Vietnamese Communist Party, as saying."We have been calculating the prices of equipment and materials too low for too long . . . compelling the state to make up for losses that are too big," the radio quoted Linh as saying in a June 14 broadcast.
Radio Hanoi said the social and economic fabric in Vietnam was steadily deteriorating due to the government's inability to control skyrocketing prices. Vietnamese officials have said inflation in the first quarter of 1988 reached 180 percent.