Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
Mai Thi Thanh Thai and Narendra M. Agrawal 1 Introduction to Vietnam The entire national economy of Vietnam had a long period of inertia when it implemented a centrally planned economic system modeled after that of the Communist bloc. Its annual growth rate stopped at 0.4 percent while the population grew more than 2.3 percent per year, causing severe shortages in essential consumer goods and a trade deficit, with imports being four to five times greater than exports and hyperinflation which peaked at 774.7 percent in 1986 (CGVSF, 2006). This compelled Vietnam to start doi moi – literally means renovation – in 1986. Without overthrowing the socialist establishment, the doi moi involved ushering in entrepreneurship as a complement to state enterprises, rather than as a replacement of Marxist ideals (Dana, 1994). By the early 1990s, remarkable policy improvements had been made and it was only then that a considerable amount of financial assistance began to flow into Vietnam in a sustained way, although Vietnam no longer enjoyed economic aid from the Soviet bloc, which collapsed in 1991. Since then Vietnam has achieved striking economic growth. Its gross domestic product (GDP) real growth rate peaked at 9.5 percent in 1995 and has consistently been among the highest in the world over recent years (Table 44.1). Vietnam has also taken active steps to integrate into the world economy by normalizing its diplomatic relationship with the United States in 1994, which led to a bilateral trade agreement, joining the Association of Southeast Asian Nations in...
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