Economy of Vietnam
Until the French colonization in the mid-19th century, Vietnam's economy had been mostly agrarian, subsistence-based and village-oriented. French colonizers, however, deliberately developed the regions differently as the French needed raw materials and a market for French manufactured goods, designating the South for agricultural production as it was better suited for agriculture, and the North for manufacturing as it was naturally wealthy in mineral resources. Though the plan exaggerated regional divisions, the development of exports—coal from the North, rice from the South—and the importation of French manufactured goods stimulated domestic commerce.
History of Vietnam since 1945
The Geneva Conference of 1954 ended France's colonial presence in Vietnam and partitioned the country into two states at the 17th parallel pending unification on the basis of internationally supervised free elections. Ngô Đình Diệm, a former mandarin with a strong Catholic and Confucian background, was selected as Premier of the State of Vietnam by Bảo Đại. While Diệm was trying to settle the differences between the various armed militias in the South, Bảo Đại was persuaded to reduce his power. Diệm created a referendum in 1955 to depose Bảo Đại and declared himself president of the Republic of Vietnam (South Vietnam). The Republic of Vietnam (RVN) was proclaimed in Saigon on October 26, 1955. The United States began to provide military and economic aid to the RVN, training RVN personnel, and sending U.S. advisors to assist in building the infrastructure for the new government.