Issues and Aspects of Development, Growth, Trade and Investment
Edited by Tran Van Hoa
Chapter 7: Vietnam: economic recovery and social issues
The Dzung Nguyen 1 INTRODUCTION Contrary to many other transition economies, Vietnam was able to attain a spectacular economic growth, macroeconomic stability and a remarkable improvement of living standards of its population during the period 1991 to 1996. However, since then this growth has been steadily slowing down. The tendency was exaggerated during the recent Asian financial crisis, halving Korea’s annual GDP growth from 9·5 per cent in 1995 to 4·8 per cent in 1998/99. Signals of the country’s economic recovery came in late 1999, later than in other Asian economies, and became stronger in the first half of 2000. But the recovery appears to be a long and slow process and the country has to revise its growth targets. The slowdown has unveiled the volatility of Vietnam’s recent social achievements and stressed the urgent need to address its crucial social issues, including widespread poverty, unsustainable development, increasing inequality, growing unemployment pressures, access to and quality of social services, and the lack of an equitable social protection system. This chapter argues that the underlying driving force of the development in Vietnam was and remains the process of economic reform – often called ‘doi moi’ (renovation) – which the country has embarked upon since 1986. The reform has dramatically reshaped the country’s social sector and changed the way social issues are tackled, from the ‘support-led’ pattern to the ‘growthmediated’ one. Therefore, being also influenced by the performance of the global economy and the economic recovery in the other Asian economies, the...
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