Vietnam is a one-party state, ruled and controlled by the Communist Party of Vietnam (CPV). The CPV's constitutionally mandated leading role and the occupancy of all senior government positions by party members ensured the primacy of Politburo guidelines and enabled the party to set the broad parameters of national policy. In recent years, the CPV gradually reduced its formal involvement in government operations and allowed the Government to exercise significant discretion in implementing policy. The National Assembly remained subject to CPV direction; however, the Government continued to strengthen the capacity of the 498-member National Assembly and to reform the bureaucracy. The National Assembly members were chosen in May 2002 elections in which candidates were vetted by the CPV's Vietnam Fatherland Front (VFF), an umbrella group for the country's mass organizations. Approximately 90 percent of elected delegates were CPV members. However, the National Assembly continued to play an increasingly independent role as a forum for local and provincial concerns and as a critic of local and national corruption and inefficiency and made progress in improving transparency in the legal and regulatory systems. The judiciary was subject to the influence of the CPV and the Government.

Internal security is primarily the responsibility of the Ministry of Public Security (MPS); however, in some remote areas, the military forces are still the primary government agency, providing infrastructure and all public safety functions, including maintaining public order in the event of civil unrest. Since 2001, the military has played a large role in the Central Highlands by enforcing restrictions on gatherings, detaining individuals, and enforcing travel restrictions. The MPS controls the police, a special national security investigative agency, and other units that maintain internal security. The MPS enforces laws and regulations that often significantly restrict individual liberties and violate other human rights. It also maintained a system of household registration and block wardens to monitor the population, concentrating on those suspected of engaging, or being likely to engage in, unauthorized political activities; however, this system has become less obvious and pervasive in its intrusion into most citizens' daily lives. While the civilian authorities generally maintained effective control of the security forces, there were reports that elements of the security forces acted independent of government authority. Members of the public security forces committed numerous human rights abuses.

The country of approximately 80 million persons is undergoing transition from a wholly central planned economy to a "socialist-oriented market economy." During the year, the Gross Domestic Product growth rate was approximately 7 percent and the inflation rate approximately 2.2 percent at year's end. The agriculture, forestry, and fishery sectors employed 62.5 percent of the labor force and accounted for 23 percent of total economic output. Industry and construction contributed 38.5 percent of total economic output, while services accounted for 38.5 percent. During the year, official development assistance disbursements exceeded $1.4 billion. In the last 10 years, overall poverty levels decreased significantly; as of 2002, approximately 30 percent of the population lived below the poverty line. Particularly in Ho Chi Minh City and Hanoi, economic reforms have raised the standard of living and reduced CPV and government control over, and intrusion into, citizens' daily lives; however, many citizens in isolated rural areas, particularly members of ethnic minorities in the Northwest Highlands, Central Highlands, and the central coastal regions continued to live in extreme poverty. There was a growing income and development gap between urban and rural areas and within urban areas. Unemployment and underemployment remained significant problems. The Government made significant steps in improving legal transparency for businesses. In December 2002, the National Assembly amended the Law on the Promulgation of Legal Normative Documents, which required most legal documents be published in the Official Gazette. On July 1, to meet this requirement, the Official Gazette became a daily publication, from six issues per month previously.

The Government's human rights record remained poor, and it continued to commit serious abuses. The Government continued to deny the right of citizens to change their government. Police sometimes beat suspects during arrests, detention, and interrogation. Several sources also reported that security forces detained, beat, and were responsible for the disappearances of persons during the year. Incidents of arbitrary detention of citizens, including detention for peaceful expression of political and religious views, continued. With some exceptions, prison conditions remained harsh, particularly in some isolated provinces, and some persons reportedly died as a result of abuse in custody. Prisons usually required inmates to work for little compensation and no wages. The judiciary was not independent, and the Government denied some citizens the right to fair and expeditious trials. The Government continued to hold a number of political prisoners. The Government restricted citizens' privacy rights, although the trend toward reduced government interference in the daily lives of most citizens continued. The Government significantly restricted freedom of speech, freedom of the press, freedom of assembly, and freedom of association. The Government continued its longstanding policy of not tolerating most types of public dissent and stepped up efforts to control dissent on the Internet. Security forces continued to enforce restrictions on public gatherings and travel in some parts of the country, primarily in the Central Highlands and the Northwest Highlands. The Government allowed elected officials and ordinary citizens in approved forums somewhat greater freedom of expression and freedom of assembly to express grievances. The Government prohibited independent political, labor, and social organizations; such organizations existed only under the control of the VFF. The Government restricted freedom of religion and operation of religious organizations other than those approved by the State. In particular, Buddhists, Hoa Hao, and Protestants active in unregistered organizations faced harassment as well as possible detention by authorities. The Government imposed some limits on freedom of movement of particular individuals whom it deemed threatening to its rule. Access to the Central Highlands by foreign observers improved from 2002, but visitors to the area were generally monitored and often accompanied by security officials. The Government continued to restrict significantly civil liberties on grounds of national security and societal stability. The CPV continued its efforts to strengthen the mechanism for citizens to petition the Government and for victims of injustice to obtain compensation. The Government did not permit human rights organizations to form or operate. Violence and societal discrimination against women remained problems. Child prostitution was a problem. Government and societal discrimination against some ethnic minorities continued to be problems. The Government restricted some core worker rights, such as freedom of association, although the Government cooperated with the International Labor Organization (ILO) and international donors to improve implementation of the Labor Law. There were reports that children worked in exploitative situations. The Government recognized child labor as a problem and attempted to address it. Trafficking in women and children for the purpose of prostitution within the country and abroad continued to a serious problem, and there were reports of the trafficking of women to China and Taiwan for arranged and forced marriages.