Vietnam's Economic Development

Vietnam's economic development: Opportunities and challenges towards the integration tendency

Prof.,Dr. Nguyen Thi Ngoc Huyen and Prof.,Dr. Bui Anh Tuan National Economics University, Hanoi, Vietnam

Abstract

Thanks to the comprehensive economic reform, the transformation from a centrally planned economy into a market economy and the implementation of open door policies, Vietnam has gained remarkable achievements in economic development. In the period 1991 - 2003, annual economic growth rate is 7.46%, per capita income (in US$) increases more than three times, economic structure shifts towards reducing the share of agriculture and increasing the share of industry and service. Foreign trade and investment have increasingly influenced economic development. These achievements, however, have yet to meet the requirements of development, and yet to correspond to the national potentiality and great opportunities brought by globalization. In order to fulfill the ambitious and ultimate goals defined in the Socioeconomic Development Strategy for 2001 - 2010 period, the Vietnamese Government should control the integration process to take more advantages of opportunities brought by globalization process and reduce the cost for internal and external

challenges. Fundamental policies that should be put in priority are: (1) Develop enterprises towards abolishing the monopoly of state owned enterprises; expand and strengthen the relationship between distributors, manufacturers, and suppliers in the value chain; (2) Give incentives to shift investment preference from import substitute industries to export oriented ones; (3) Promote production factor markets; (4) Broaden foreign trade and actively integrate into the world's economy; and (5) Modernize the state administration process. This paper will focus on (i) evaluating the economic change of Vietnam towards the integration tendency and (ii) analyzing fundamental policies of the Government to cope with challenges.

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