From a planned economy to a market economy

In 1986, the Vietnamese communist party undertook a reform process (renovation policy “Doi Moi”) aimed at progressive market liberalisation to favour an increase in productivity and the growth of exports. Since then, Vietnam has developed itself in a phenomenal fashion and has achieved enormous progress in the eradication of poverty. The country has switched from survival agriculture to export agriculture. 52% of the active population works in this sector. Its economy has also become more diversified. The part of GDP generated by the agricultural sector has reduced from 42% in 1989 to less than 20% in 2008. Although the private sector is expanding, state companies still oversee the majority of industrial production, which represents over 40% of GDP.

There is still a lot of progress left to be made before Vietnam catches up with the more developed ASEAN countries. Nevertheless, its membership of the ASEAN free-trade agreement (AFTA) since 1995 and more recently of the WTO shows the willingness of the authorities to stabilise its economy.

Source: Economist Intelligence Unit