The past three decades have seen fairly strong economic growth, improved living standards and a multiplying in the number of entrepreneurs playing an increasingly important role in national industrialisation and modernisation.
Growth in the past 30 years was much higher than the pre-Doi Moi level. After posting average growth of 4.4% in the early years of reform from 1986 to 1990, Vietnam’s economy experienced impressive growth in the next two decades. Growth averaged 8.2% during the 1991-1995 period, followed by 7.6% in the next five years despite negative impacts from the regional financial crisis. Growth slowed down to 7.34% during the first five years of the 21st century and further to 6.32% during the 2006-2010 period as a result of a global economic downturn. In the subsequent years, due to the global financial crisis and the European sovereign debt crisis, Vietnam’s economic growth fell to an average of 5.9% during the 2011-2015 period but was still among the best performers in the region and the world at large.
The per capita income has also risen sharply from US$471 in 2003 to nearly US$2,300 in 2015. Vietnam’s economic output is now estimated at US$204 billion. The country’s working force has also seen improvements in both number and quality. The contribution of total-factor productivity (TFP) to growth increased to 28.94% during the 2011-2015 period from 21.4% during the 2001-2005 period. The macroeconomy has been kept stable and inflation in check.
Reform efforts in the past 30 years have constantly improved the business climate, thereby attracting more investment for development. Vietnam’s economic structure is shifting towards modernisation with a shrinking share of agriculture and an increasing contribution of services and industrial production. Vietnam now sees a wide range of economic sectors at play, in addition to State-owned enterprises. Exports have frequently experienced double-digit growth, hitting an average of 18% over the last five years, and have been diversified with a growing proportion of manufactured goods and a declining ratio of agricultural goods and raw materials. Key economic regions and concentrated industrial parks have become a driver of economic growth.
Industrial production and construction have maintained solid growth, creating a great diversity of products. Vietnamese goods have seen a gradual improvement in quality and have become more popular in both domestic and international markets. The country has also focused on developing a number of new and advanced technologies. Agriculture has undergone significant changes, transforming Vietnam from a food-hungry country to one of the world’s largest exporters of rice, coffee, rubber, cashew, pepper and seafood. Services have flourished from tourism and telecommunications to banking, finance and legal counselling to meet the growing demand of both businesses and individuals. The extraction of natural resources and environmental protection have been aligned with sustainable development goals to produce initial encouraging results. Significant improvements have been made to transport, power, information, telecommunications, and urban, education and healthcare infrastructure. Vietnam has taken steps to promote the application of advanced technology as a foundation for a transition to a knowledge-based economy.
Under the leadership of the Communist Party, Vietnam has gradually fine-tuned the socialist-oriented market institutions as realised in various laws to create a legal framework for the economy to work effectively. Over the past 30 years, Vietnam has amended the constitutions three times, as well as revising and promulgating more than 150 codes and laws and over 70 ordinances. Recently, the National Assembly adopted the 2013 Constitution and a range of laws to concretise articles enshrined in the Constitution, laying the legal framework for forming and perfecting the socialist-oriented market institutions. These laws assert that the economy has many forms of ownership and distribution; and the State regulates the economy by market principles.
Three decades of economic reform have also seen a more active role of different economic sectors and a better environment for business activities. State-owned enterprises are being restructured with their number falling sharply. Collective economic entities have adopted new forms of cooperation more appropriate with market institutions. The private sector is also witnessing a rapid rise in the number of enterprises and an improved performance, creating many jobs and making a growing contribution to gross domestic product. Foreign-invested companies are also stimulated and have made significant contributions to job creation and export growth.
Social and professional organisations have constantly developed and promoted their vital role in the national economy. The law-governed socialist State under the leadership of the Communist Party of Vietnam is being improved with the streamlined State management apparatus and renewed State management over the economy in accordance with the market mechanism.
Over the past 30 years or Doi Moi, Vietnam has gradually formed the complete market factors and market types with smooth operations in line with the regional and international market. The goods and service market has also seen strides with the improvements in scale and structure.
The financial and monetary market has developed strongly and vibrantly. Along with the banking system, the stock market was formed, contributing to diversifying investment capital sources. In the meantime, the operation of the insurance market has contributed positively to stabilising production and people's lives as well as mobilising capital for the national cause of industrialisation and modernisation. The real estate market has developed rapidly while the labour market has been formed on a national scale.
The science and technology market is taking shape and is under development with considerable progress in the number and value of technology transactions in recent years. The market of basic public services including health and education has made a new development step which can mobilise the participation of non-state resources.
In the past 30 years, the economic growth has been in harmony with cultural development, social progress and justice, and natural resources and environment protection. Social security and welfare have developed fairly, particularly in poverty reduction, job creation, social insurance, policy towards national contributors and health insurance policy. In the context of economic difficulties, Vietnam has increased the budget and mobilised resources to implement social policies and has completed many United Nations Millennium Development Goals ahead of schedule.
Thirty years of Doi Moi has been a journey of deep integration into the world economy in diversified levels, conforming with global principles and standards. Vietnam has established many economic strategic partnerships. The country has also actively built the ASEAN Community 2015 and completed the domestic market under the WTO commitments. To date, 59 countries have recognised Vietnam's market economy including many large trade partners of Vietnam.
Vietnam has signed ten regional and bilateral free trade agreements (FTAs) including six FTAs signed as an ASEAN member country and four FTAs signed as an independent party, and has recently completed the negotiations of two FTAs including the Vietnam-EU FTA and Trans-Pacific Partnership Agreement. Vietnam is also actively negotiating three other FTAs - ASEAN-Hong Kong FTA, Vietnam-EFTA (the European Free Trade Association), and Vietnam-RCEP (Regional Comprehensive Economic Partnership).
Vietnam has participated in three value chains which are very important to the global economy - the value chain of food and food security, the value chain of energy and energy security and the value chain of garments, textiles and footwear.
These achievements were attributed to the changes in the mind-set of the Party on the inevitability of the development of a market economy and the decision to move from a centrally planned economy to a socialist-oriented market economy which identifies economic development as a key task.
Thirty years of Doi Moi was an important historical period with great significance for the cause of national development, marking the maturity in all aspects of the Party, State and the people. This was a profound, comprehensive and thorough transformation and a great revolutionary cause of the entire Party and people for the goals of a prosperous people, powerful country and democratic, equal and civilised society.
The improvements of the socialist-oriented market economy and investment environment have helped raised Vietnam’s position in the international arena, creating an important premise for accelerating national industrialisation and modernisation and improving the quality of life. At the same time, Vietnam is also aware of the limitations and challenges to the economy, requiring sound policies to make the country develop rapidly and sustainably in the coming time.
2015 marked the final year of the journey of the 30-year Doi Moi reform and the final year to implement the five-year socio-economic development plan in the 2011-2015 period. 2015 was also an important year with the implementation of the ASEAN Community, carrying out bilateral and multilateral FTAs, and organising Party Congress at all levels in preparation for the National Party Congress in 2016. With the deep belief in the sound policies of the Party, State, National Assembly and Government and the efforts of ministries, sectors, localities and people, we always trust in the prosperity of the country in the process of integration.
