| Date - Field | Vietnam - Economy - overview |
2008 January
Economy - overview | Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and significantly reducing poverty. Growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and temporarily allowed opponents of reform to slow progress toward a market-oriented economy. GDP growth averaged 6.8% per year from 1997 to 2004 even against the background of the Asian financial crisis and a global recession. Since 2001, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. The economy grew at an average annual rate of 8% in 2005-07. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US increased 800% from 2001 to 2006. Vietnam joined the WTO in January 2007, following over a decade long negotiation process. This should provide an important boost to the economy and should help to ensure the continuation of liberalizing reforms. Among other benefits, accession allows Vietnam to take advantage of the phase-out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005. Agriculture's share of economic output has continued to shrink, from about 25% in 2000 to 20% in 2006. Deep poverty, defined as a percent of the population living under $1 per day, has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than 1 million people every year. Vietnamese authorities have tightened monetary and fiscal policies to stem high inflation. Hanoi is targeting an economic growth rate of 7.5-8% during the next four years. |
2007 January
Economy - overview | Vietnam is a densely-populated, developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and significantly reducing poverty. Growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and temporarily allowed opponents of reform to slow progress toward a market-oriented economy. GDP growth averaged 6.8% per year from 1997 to 2004 even against the background of the Asian financial crisis and a global recession, and growth hit 8% in 2005 and 7.8% in 2006. Since 2001, however, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US doubled in 2002 and again in 2003. Vietnam joined the World Trade Organization in January 2007. This should provide an important boost to the economy and should help to ensure the continuation of liberalizing reforms. Among other benefits, accession will allow Vietnam to take advantage of the phase out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005. Agriculture's share of economic output has continued to shrink, from about 25% in 2000 to 20% in 2006. Deep poverty, defined as a percent of the population living under $1 per day, has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is working to promote job creation to keep up with the country's high population growth rate. However, high levels of inflation have prompted Vietnamese authorities to tighten monetary and fiscal policies. Hanoi is targeting an economic growth rate between 7.5 and 8% over the next five years. |
2006 January
Economy - overview | Vietnam is a densely-populated, developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and significantly reducing poverty. Growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and temporarily allowed opponents of reform to slow progress towards a market oriented economy. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth then rose to 7% in 2000-04 even against the background of global recession. Since 2001, however, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. However, equitization of state-owned enterprises and reduction in the proportion of non-performing loans has fallen behind schedule. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US doubled in 2002 and again in 2003. Vietnam is working toward accession to the WTO in 2005. Among other benefits, accession will allow Vietnam to take advantage of the phase out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005. Vietnam is working to promote job creation to keep up with the country's high population growth rate. However, in 2004, high levels of inflation prompted Vietnamese authorities to tighten monetary and fiscal policies. |
2005 January
Economy - overview | Vietnam is a densely-populated, developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and significantly reducing poverty. Growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and temporarily allowed opponents of reform to slow progress towards a market oriented economy. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth then rose to 7% in 2000-04 even against the background of global recession. Since 2001, however, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. However, equitization of state-owned enterprises and reduction in the proportion of non-performing loans has fallen behind schedule. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US doubled in 2002 and again in 2003. Vietnam is working toward accession to the WTO in 2005. Among other benefits, accession will allow Vietnam to take advantage of the phase out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005. Vietnam is working to promote job creation to keep up with the country's high population growth rate. However, in 2004, high levels of inflation prompted Vietnamese authorities to tighten monetary and fiscal policies. |
2004 January
Economy - overview | Vietnam is a poor, densely-populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy, but rather than prompting reform, reaffirmed the government's belief that shifting to a market-oriented economy would lead to disaster. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth then rose to 6% to 7% in 2000-02 even against the background of global recession. These numbers mask some major difficulties in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Since the Party elected new leadership in 2001, Vietnamese authorities have reaffirmed their commitment to economic liberalization and have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. The US-Vietnam Bilateral Trade Agreement entered into force near the end of 2001 and is expected to significantly increase Vietnam's exports to the US. The US is assisting Vietnam with implementing the legal and structural reforms called for in the agreement. |
2003 January
Economy - overview | Vietnam is a poor, densely-populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market-oriented economy would lead to disaster. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth then rose to 6% TO 7% in 200002 even against the background of global recession. These numbers mask some major difficulties in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Meanwhile, Vietnamese authorities have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. The US-Vietnam Bilateral Trade Agreement entered into force near the end of 2001 and is expected to significantly increase Vietnam's exports to the US. The US is assisting Vietnam with implementing the legal and structural reforms called for in the agreement. |
2002 January
Economy - overview | Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market oriented economy leads to disaster. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth then rose to 6.8% in 2000 and dropped back to 4.7% in 2001 against the background of global recession. These numbers mask some major difficulties in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Meanwhile, Vietnamese authorities have moved slowly in implementing the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries. The US-Vietnam Bilateral Trade Agreement entered into force near the end of 2001 and is expected to significantly increase Vietnam's exports to the US. The US is assisting Vietnam with implementing the legal and structural reforms called for in the agreement. |
2001 January
Economy - overview | Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems existing in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market oriented economy leads to disaster. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth continued at the moderately strong level of 5.5%, a level that should be matched in 2001. These numbers mask some major difficulties in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers; this problem apparently eased in 2000. Foreign direct investment fell dramatically, from $8.3 billion in 1996 to about $1.6 billion in 1999. Meanwhile, Vietnamese authorities have moved slowly in implementing the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries. |
2000 January
Economy - overview | Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems existing in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market oriented economy leads to disaster. GDP growth of 8.5% in 1997 fell to 4% in 1998 and rose slightly to an estimated 4.8% in 1999. These numbers masked some major difficulties that are emerging in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Foreign direct investment has fallen dramatically, from $8.3 billion in 1996 to about $1.6 billion in 1999. Meanwhile, Vietnamese authorities have slowed implementation of the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries. Privatization of state enterprises remains bogged down in political controversy, while the country's dynamic private sector is denied both financing and access to markets. Reform of the banking sector - considered one of the riskiest in the world - is proceeding slowly, raising concerns that the country will be unable to tap sufficient domestic savings to finance growth. Administrative and legal barriers are also causing costly delays for foreign investors and are raising similar doubts about Vietnam's ability to attract additional foreign capital. |
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This page was last updated on 23 July, 2008 |
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