Viet Nam Human Rights
Review on Vietnam’s economy after the Doi Moi
2/1/17
After 30 years of the ‘Doi Moi’ (Renewal)
process, Vietnam has emerged from a backward country with 90 percent of its
population working in the agricultural sector, to one that is well on its way
towards industrialization and modernization.
The country has built material and technical
facilities and socio-economic infrastructure, thus attracting financial and
human resources for national development. During the reform period, Vietnam
posted a markedly increased economic growth rate, compared with the previous
era.
According to the official, after generating an
annual gross domestic product (GDP) growth rate of just 4.4 percent in the
early years of reform from 1986-1990, Vietnam’s economy experienced an impressive
pace in the next nearly two decades, with 8.2 percent from 1991-1995, 7.6
percent from 1996-2000, 7.34 percent from 2001-2005 and 6.32 percent from
2006-2010.
During 2011-2015, due to impacts from the global
financial downturn in 2008, and the European sovereign debt crisis in 2010, the
country’s economic growth fell to 5.9 percent. But it was still much higher
than that recorded by most other countries in the region and the world. Vietnam’s
per capita income rose sharply from 471 USD in 2001 -16 years after the ‘Doi
Moi’ policy was initiated - to 2,300 USD in 2015. The country’s economic output
was about 204 billion USD last year.
The macro economy has remained stable and
inflation has been under control. Vietnam’s economic structure has been shifted
towards modernization, with the percentage of contributions by agriculture to
the overall economy decreasing and those of services and industrial production
increasing.
Over the past three decades, all economic sectors
have made big strides. Industry and construction have maintained their noted
growth thanks to the application of scientific and technological advances, and
the development of new industries and high technologies. Agriculture
has experienced significant changes, transforming Vietnam from a food-hungry
country to one of the world’s largest exporters of rice, coffee, rubber, cashew
nuts and fisheries products. The service sector has also flourished with a
range of products like tourism, telecommunications, finance, banking and legal
consultation. The exploitation of natural resources and environmental
protection have been aligned with sustainable development, producing initial
good results.
Significant improvements have been seen in
socio-economic infrastructure development, particularly in transport,
electricity, telecommunications, urban areas, education and health
care. It can be said that the application of scientific and technological
advances has created a foundation for the transition towards a knowledge-based
economy.
During the reviewed period, under the leadership
of the Party, the policy of developing the socialist-oriented market economy
has been institutionalized in various laws, which create a legal corridor for
the economy to work effectively.
The laws testify that the economy has many forms
of ownership and distribution, and that the State regulates the economy by
market principles. They also assert that Vietnam advocates ensuring
social progress and equality - through socio-economic and environmental
protection policies, as well as the country’s openness to regional and
international integration.
State-owned enterprises have been restructured in
line with the Corporate Law, resulting in a sharp fall in their number.
Collective economic entities have adopted new forms of cooperation more suited
to the market mechanism. Meanwhile, the private economic sector has witnessed a
rapid rise in the number of enterprises and an improved performance,
significantly contributing to job generation and national GDP. Foreign-invested
companies have also been stimulated and have made significant contributions to
the fulfillment of socio-economic development, job creation and export targets. The
financial and monetary markets have developed strongly and vibrantly. Along
with the banking system, the birth of the stock market has contributed to
diversifying investment capital resources.
Thirty years of ‘Doi Moi’ has been seen as a
journey of deep integration into the world economy at various levels and in
tune with global principles and standards. Vietnam has established
relations with many economic strategic partners, constructively built the ASEAN
Community and completed the domestic market in conformity with its commitments
to the World Trade Organisation (WTO). The country has signed ten regional and
bilateral free trade agreements (FTAs), including six signed in its capacity as
an ASEAN member country and four inked as an independent party. It has recently
completed negotiations of two deals – the Vietnam-EU FTA, and the Trans-Pacific
Partnership (TPP) agreement. It is also actively negotiating three other FTAs,
including those between ASEAN and Hong Kong (China) and between ASEAN and the
European Free Trade Association (EFTA), and the Regional Comprehensive Economic
Partnership (RCEP). As a result, 59 countries, including many large trade
partners, have to date recognised Vietnam’s market economy.
The impressive achievements gained by the
Vietnam economy has been recognized by international institutions. Bloomberg,
while highly appreciating Vietnam economy prospects, has predicted Vietnam
would be the second fastest growing economy in 2016./.
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All comments [ 7 ]
The country’s workforce has also made progresses in terms of both quantity and quality, adding that contributions made by the ‘total-factor productivity’ to the national economic growth.
Together with the impressive economic achievements, Vietnam also saw its diplomatic and political status constantly improved in the international arena.
From 2007 to present, the government’s policies to use state-run conglomerates as the chief force to propel Vietnam's economy have degraded into problems of crony capitalism, interest groups and corruption.
After 30 years of the Doi Moi reform, Vietnam has recorded significant achievements, emerging from a backward country with 90% of the population working in the agricultural sector to one of the most dynamic economies in Asia.
As analysis, the per capita income has also risen sharply from US$471 in 2003 to nearly US$2,500 in 2016.
Reform efforts in the past 30 years have constantly improved the business climate, thereby attracting more investment for development.
Under the leadership of the Communist Party, Vietnam has gradually fine-tuned the socialist-oriented market institutions as realised in various laws to create a legal framework for the economy to work effectively.
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