A8 - Vietnam: a rising Asian tiger?

Summary

Since the start of economic reform or ‘doi moi’ in 1986, Vietnam has been on a steady path of integration into the international economy, entering the World Trade Organization (WTO) in January 2007. From 1989, Vietnam recorded remarkable economic growth that averaged 7.4% annually, bringing the poverty rate – those living on less than US$1 a day – down from more than 60% to less than 15% by the end of 2008. This remarkable record of growth and poverty reduction is bringing Vietnam into the ranks of middle-income countries, with a gross national income (GNI) per capita of just over US$1,000. Today Vietnam is one of the world's largest exporters of rice, coffee beans and cashew nuts. Further, A. T. Kearney's Global Services Location Index, a ranking of the most attractive countries for outsourcing, includes Vietnam in its top ten in 2009.

Economic reforms promoting private business and foreign investment have been key components of this growth, first initiating large corporate investment inflows in the mid 1990s from companies such as Canon, Nike and 3M. The 2000 Enterprise Law, which facilitated business registration, marshalled billions of dollars of investment capital and millions of jobs into the growing private sector. In 2007, entry into the WTO precipitated a surge of capital inflows that accounted for a striking 30 per cent of Vietnam's gross domestic product (GDP).