Banking reform in Vietnam: persistence of the state?

To resuscitate its ailing and isolated economy, Vietnam implemented the doi moi (renovation) reforms in the late 1980s. Designed to create a modern economy, doi moi also sought to reintegrate Vietnam into the international economic system. As a result, the Southeast Asian country signed several landmark economic treaties with regional and international bodies such as the Association of Southeast Asian Nations (ASEAN) and the World Trade Organization (WTO). Such treaties have opened up new export markets for Vietnamese firms but have also compelled the state to ease, and even dismantle, protectionist policies in order to draw foreign firms into the domestic economy. Vietnam has been amenable to such neoliberal arrangements, and has recorded stellar economic growth as a result; this commitment to openness has also earned praise from international institutions and analysts. However, a closer examination of the Vietnamese banking industry – earmarked for reform in the aftermath of doi moi – tells a different story. Presenting an analysis of continuity and change in the Vietnamese banking industry, this chapter examines the fate of neoliberal ideas about development when they encounter the very different political context of a transition economy.