Vietnam’s Economic Development Strategy: Policies for Sustained Growth

From Chapter 3 it is apparent that Vietnam has recently undertaken a major change in direction with respect to its economic development. It has moved away from a centrally planned economy with its emphasis upon collectivised agriculture, heavy industry, state control over prices, interest rates and the exchange rate, monopoly control over trade and bias against the private sector, to a market driven economy. Since 1989 this process was further confirmed by the introduction of even more comprehensive reforms, such as: price liberalisation; external sector reform; de-collectivisation and other major reform of the agriculture sector; state-owned enterprise sector reform; financial sector reform; labour market reform; and legal reform, which have set the economy on an unambiguous adjustment phase towards a market economy. As a result of these reforms a number of the most fundamental economic prerequisites for a market economy such as generally unregulated marketdetermined prices, a legal basis for property rights and commercial transactions, and a significant role for the non-state sector, have been established. This change in the economic development strategy has unleashed potential within the economy that was restrained by the former economic system, and has enabled the economy to achieve impressive economic outcomes in terms of GDP growth, inflation, exports, foreign direct investment, to name but a few.