Vietnam economy is a developing planned economy and market economy. Since the mid-1980s, through the “New Chance” reform period, Vietnam has made a shift from a highly centralized planned economy to a socialist – oriented market economy which use both directive and indicative planning. Over that period, the economy has experienced rapid growth. Nowadays, Vietnam economy is in a period of being integrated into the global economy. Almost all Vietnamese enterprises are small and medium enterprises. Vietnam has become a leading agricultural exporter and served as an attractive destination for foreign investment in Southeast Asia. As the planning economy of Vietnam lost the momentum for productivity and sustainable growth, like most of the Communist economies in the world after the War period, nowadays the Vietnam economy relies largely on Foreign Dicrect Investment to attract the capital from overseas to support its continual economic rigorousness

Vietnam economy development:

Vietnam is a densely-populated developing country that has been transitioning from the rigidities of a centrally-planned economy since 1986. Vietnamese authorities have reaffirmed their commitment to economic modernization in recent years. Vietnam joined the World Trade Organization in January 2007, which has promoted more competitive, export-driven industries. Vietnam became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. Agriculture’s share of economic output has continued to shrink from about 25% in 2000 to less than 22% in 2012, while industry’s share increased from 36% to nearly 41% in the same period. State-owned enterprises account for roughly 40% of GDP. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. The global recession hurt Vietnam’s export-oriented economy, with GDP in 2012 growing at 5%, the slowest rate of growth since 1999. In 2012, however, exports increased by more than 18%, year-on-year; several administrative actions brought the trade deficit back into balance. Between 2008 and 2011, Vietnam’s managed currency, the dong, was devalued in excess of 20%, but its value remained stable in 2012. Foreign direct investment inflows fell 4.5% to $10.5 billion in 2012. Foreign donors have pledged $6.5 billion in new development assistance for 2013. Hanoi has oscillated between promoting growth and emphasizing macroeconomic stability in recent years. In February 2011, the government shifted from policies aimed at achieving a high rate of economic growth, which had stoked inflation, to those aimed at stabilizing the economy, through tighter monetary and fiscal control. Although Vietnam unveiled a broad, “three pillar” economic reform program in early 2012, proposing the restructuring of public investment, state-owned enterprises, and the banking sector, little perceptible progress had been made by early 2013. Vietnam’s economy continues to face challenges from an under capitalized banking sector. Non-performing loans weigh heavily on banks and businesses. In September 2012, the official bad debt ratio climbed to 8.8%, though some independent analysts believe it could be higher than 15%.

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