Systemic Change and Economic Reform in Vietnam

Abstract

A 1999 World Bank report on Vietnam’s economy argued that ‘Eighteen months ago, Vietnam’s economy was “coasting downwind”, spurred by 25 per cent annual growth in its exports, and plentiful foreign savings looking for investment opportunities. The situation today could hardly be more different’ (World Bank, 1998).¹ It further argued that the business environment ‘is seen by investors as increasingly hostile’. A 1999 Reuters report maintained that Vietnam ‘has gone from being an E1 Dorado to an investment backwater in less than a decade…’ (Reuters, 19 February 1999). This scepticism was despite Vietnam experiencing an average annual GNP growth rate of around 8.5 per cent from 1991 to 1998, and average annual export growth of more than 26 per cent over the same period. Inflation remained under 10 per cent in the late 1990s. As a ratio of GDP, foreign investment inflows were amongst the highest in Southeast Asia during the mid-1990s.