Vietnam and Economic Growth

Prior to 1986, Vietnam's economy was primarily agrarian and village-oriented until French colonization in the mid-19th century. The period following reunification in 1975 saw limited economic growth due to closed economic policies.

However, 1986 served as a transformative year for Vietnam, as Vietnam launched the "Doi Moi" (renovation) policy, marking a shift from a centrally planned economy to a "socialist-oriented market economy." This reform opened up the country to foreign investment and private business.

In the 1990s - 2000s:, the success of Doi Moi became evident with over 30,000 private businesses created and the economy growing at an annual rate of more than 7%. In the 21st century, Vietnam experienced consistent GDP growth, averaging around 6-7% annually. The country transformed from a crop importer to an exporter of various agricultural products. Furthermore, even in recent years, despite global challenges like the COVID-19 pandemic and trade tensions, Vietnam has emerged as one of Asia's top-performing economies, with an average growth of 6.2% (faster than any other Asian country except China).

In fact, Vietnam aims to become a high-income country by 2045, which would require an annual average growth rate of about 6% per capita for the next 25 years.

Vietnam's rapid economic growth could be attributed to its quality and quantity of human and physical capital. First, the Communist Party of Vietnam's consistent leadership has provided a stable political environment, which has been conducive to economic growth and foreign investment. They have also implemented measures to increase education levels and workplace efficiency. The governments efforts were not fruitless; we often see "Made in Vietnam" as Vietnam has become an attractive destination for foreign manufacturers, particularly in electronics. The manufacturing sector now accounts for 38% of Vietnam's exports (up from 14% in 2010.