Vietnam's notable economic achievements after 30 years of Doi Moi

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. My Tho city (Photo: Thai Thien). The past three decades have seen fairly strong economic growth, improved living standards and a multiplying in the number of entrepreneurs playing an increasingly important role in national industrialisation and modernisation. Growth in the past 30 years was much higher than the pre-Doi Moi level. After posting average growth of 4.4% in the early years of reform from 1986 to 1990, Vietnam’s economy experienced impressive growth in the next two decades. Growth averaged 8.2% during the 1991-1995 period, followed by 7.6% in the next five years despite negative impacts from the regional financial crisis. Growth slowed down to 7.34% during the first five years of the 21st century and further to 6.32% during the 2006-2010 period as a result of a global economic downturn. In the subsequent years, due to the global financial crisis and the European sovereign debt crisis, Vietnam’s economic growth fell to an average of 5.9% during the 2011-2015 period but was still among the best performers in the region and the world at large. The per capita income has also risen sharply from US$471 in 2003 to nearly US$2,300 in 2015. Vietnam’s economic output is now estimated at US$204 billion. The country’s working force has also seen improvements in both number and quality. The contribution of total-factor productivity (TFP) to growth increased to 28.94% during the 2011-2015 period from 21.4% during the 2001-2005 period. The macroeconomy has been kept stable and inflation in check. Reform efforts in the past 30 years have constantly improved the business climate, thereby attracting more investment for development. Vietnam’s economic structure is shifting towards modernisation with a shrinking share of agriculture and an increasing contribution of services and industrial production. Vietnam now sees a wide range of economic sectors at play, in addition to State-owned enterprises. Exports have frequently experienced double-digit growth, hitting an average of 18% over the last five years, and have been diversified with a growing proportion of manufactured goods and a declining ratio of agricultural goods and raw materials. Key economic regions and concentrated industrial parks have become a driver of economic growth, etc... 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. Over the past 30 years, Vietnam has amended the constitutions three times, as well as revising and promulgating more than 150 codes and laws and over 70 ordinances. Recently, the National Assembly adopted the 2013 Constitution and a range of laws to concretise articles enshrined in the Constitution, laying the legal framework for forming and perfecting the socialist-oriented market institutions. These laws assert that the economy has many forms of ownership and distribution; and the State regulates the economy by market principles. Over the past 30 years or Doi Moi, Vietnam has gradually formed the complete market factors and market types with smooth operations in line with the regional and international market. The goods and service market has also seen strides with the improvements in scale and structure. In the past 30 years, the economic growth has been in harmony with cultural development, social progress and justice, and natural resources and environment protection. Social security and welfare have developed fairly, particularly in poverty reduction, job creation, social insurance, policy towards national contributors and health insurance policy. In the context of economic difficulties, Vietnam has increased the budget and mobilised resources to implement social policies and has completed many United Nations Millennium Development Goals ahead of schedule. Vietnam has signed ten regional and bilateral free trade agreements (FTAs) including six FTAs signed as an ASEAN member country and four FTAs signed as an independent party, and has recently completed the negotiations of two FTAs including the Vietnam-EU FTA and Trans-Pacific Partnership Agreement. Vietnam is also actively negotiating three other FTAs - ASEAN-Hong Kong FTA, Vietnam-EFTA (the European Free Trade Association), and Vietnam-RCEP (Regional Comprehensive Economic Partnership). These achievements were attributed to the changes in the mind-set of the Party on the inevitability of the development of a market economy and the decision to move from a centrally planned economy to a socialist-oriented market economy which identifies economic development as a key task. 2015 marked the final year of the journey of the 30-year Doi Moi reform and the final year to implement the five-year socio-economic development plan in the 2011-2015 period. 2015 was also an important year with the implementation of the ASEAN Community, carrying out bilateral and multilateral FTAs, and organising Party Congress at all levels in preparation for the National Party Congress in 2016. With the deep belief in the sound policies of the Party, State, National Assembly and Government and the efforts of ministries, sectors, localities and people, we always trust in the prosperity of the country in the proce. (Source: NDO)