During the past years, Vietnam economy has made a number of significant achievements. Since the beginning of the cause of renovation (Doi Moi) initiated by the Communist Party, the country's state has changed substantially compared to the period of pre-renovation. The economy has recorded high growth rates for several years in a row. People's living standards have been considerably improved. Since the market opening-up, the number of foreign investors rushing to Vietnam has risen surprisingly, resulting in a huge increase in Foreign Direct Investment (FDI). In 2006, Vietnam has successfully fulfilled and exceeded almost all development targets set by the National Assembly. The economic growth rate is 8.17%; that of industry is 17%; the service sector has posted a high development rate, especially retail industry; high export value has been maintained, reaching $ 39.6 billion; there has been a reduction in trade deficit in terms of net value and proportion of import and export. FDI and ODA attraction remains strong. Vietnam's accession to WTO and hosting of APEC demonstrate successful diplomatic and economic activities. The approval of the Permanent Normal Trade Relation by the US Congress is an evidence of Vietnam's increasing importance in the world stage. The development of Vietnam's Stock Exchange with its vibrant activities in recent months is also a positive sign to some extent. All of those accomplishments prove that the country is initially integrating into the world economy successfully. However, Vietnam's continuous high growth rates for many years raise a question over the viability of the development. Could the economy maintain such a vigorous development in the coming years ? Or heating development will be followed by a severe collapse due to implicit problems ? This document is to be divided into three sections to discuss the economic issues of Vietnam economy in the stage of integration and globalization. - Part 1: Vietnam economy at a glance.
- Part 2: Vietnam economic issues assessment.
- Part 3: Solutions to the issues.
A. OVERVIEW OF VIETNAM ECONOMY OVER THE PAST YEARS.
1. Domestic policy.
Viet Nam embarked on the Doi Moi policy in 1986. Since then, the country has seen dramatic changes, first and foremost in the economic thinking. The centrally-planned economy was replaced by the socialist-oriented market economy; national industrialization and modernization were initiated together with the policy of multilateralization and diversification of external economic relations, opening-up and international integration.
The 1987 Foreign Investment Law was the first legal document that helped form the legal framework for the Vietnamese market economy. In 1991, the Private Enterprise Law and Corporate Law were introduced. The amended 1992 Constitution affirmed the existence and development of a multi-sector economy under a market mechanism, including the foreign-invested sector. This was followed by the promulgation of a number of laws essential for the formation of the market economy, including Land Law, Tax Law, Bankruptcy Law, Environment Law, and Labour Code etc. Hundreds of ordinances and decrees were enacted by the Government to guide the implementation of these laws, which help ensure national socio-economic development.
Along with the law-making process, market economy institutions have also been established. Government policy advocates the elimination the central planning mechanism, the emphasis on monetary - market relations, the focus on economic management measures and the establishment of a wide range of financial institutions, banks and basic markets for money, labour, goods and land, etc. The administrative reform was also promoted by the authorities.
Overall, tremendous economic reforms taking place over nearly two decades of Doi Moi have yielded encouraging results. External economic relations have been expanded and the flow of foreign direct investment has increased....
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