Vietnam under reform

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Vietnam under reform

• Prof. Dr. NGUYEN QUANG THAI
• General Secretary of
• Vietnam Economic Association

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Vietnam under reform

• Area 329314.5 km2
• Population 83.1 Mill. Pers
• Density 252 person/km2
• Six main regions
• Red River Delta
• North Mountain Area
• North Central and Central Coast
• Central Highlands
• South East
• Mekong Delta

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Vietnam under reform

• Main Achivement
• 1- Growth rate more than 7/year (by VND), and
  GDP-per capita in
• 1974 78
• (in war conditions,
• by Tran Van Tho Prof.)
• 1976 101
• 1980 91
• 1990 124
• 1997 320
• 2003 480 (165 in the world)
• 2004 550 (

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Vietnam under reform

• Growth rate (cont.)

Annual Growth Rate GDP per-capita by
USD 1976-80 1980-97 1997-2005 GDP
per-capita -2.6/year 7.7/year 9,0/year GDP -0.
4/year 9.8/year 10.5/year GDP growth rate
1976-1990 is 3.6/year GDP growth rate 1990-2005
is 13.3/year GDP growth rate 1976-2005 is
8.5/year
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Vietnam under reform

• 2- Changing in Structure Changing in Structure of
  Economy is quickly (GDP)
• 1976 1990 2005
• Agriculture 49 38.7 20.9
• Industry 31 22.7 41.0
• Service 20 38.6 38.1

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Vietnam under reform

• Changing in Structure (cont.)
• Structure of labor ()
• 1990 2005 Delta
• Agriculture 73.1 56.7 -16.4
• Industry 11.2 17.9 6.7
• Service 15.7 25.4 9.7

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Vietnam under reform

• 3- Poverty Reduction
• General poverty rate is reducing
• 1976-1990 more than 60
• 1992-1993 58.1
• 1997-1998 37.4
• 2001-2002 28.9
• 2005 about 22.0

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Vietnam under reform

• Poverty Reduction (cont.)
• GINI is about 40 (from 0.36-0.42), less than
  China (0,447-2001), Malaysia (0,492-1997),Thailand
  (0,432-2000) but is increasing
• The gap between 20 Richest and 20 poorest
  less than 10 times

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Vietnam under reform

• 4- Open-door
• Trading with more 170 countries
• There are 7 commodities with export value more
  than 1 billion USD (crude-oil, textile,
• footwear, fishery products, electronic parts,
  wood products and rice)
• Share of export to GDP is 60 and increasing
  with more 50 of export value from manufactured
  goods
• Vietnam-member of AFTA and will joint WTO this
  year

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Vietnam under reform

• Open-door policy (cont.)
• ODA (from 1993) more than 32 billons USD,
  contribute to infrastructure, poverty reduction,
  human resources improving and legal framework
• FDI (from 1988) more than 6000 projects and 60
  billions USD 37 industrial value 56 export
  more than 1 mill labor 15 GDP

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Vietnam under reform

• 5- Forwards to sustainable development
• (Draft of X National Congress of Communist Party
  of Vietnam)
• Economic Quick Growth, effective, sustainable
  and competitiveness
• Social and cultural improving living standard,
  job creation, poverty reduction,
• Environment and natural resources protection
• Legal Framework and networking for SD

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Vietnam under reform

• Main Weakness
• 1- Quality of Growth is in low level
• TFP factor take 51 from 1980 to 2000 (by APO,
  2005), but from some last year only 22 (by CIEM,
  2003)

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Vietnam under reform

• Quality of Growth (cont.)
• ICOR increasing from 3.3-3.5 (1995) to 5-6
  (2005), therefore investment rate increasing to
  38GDP but annual GDP growth rate 2001-2005 only
  7.5

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Vietnam under reform

• Quality of Growth (cont.)
• Productivity is fast increasing. Due-to mainly
  labor force in service and industry increasing,
  productivity from these sectors increase not very
  high

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Vietnam under reform

• Quality of Growth (cont.)
• CGI - Growth Competitiveness Index for Vietnam
  change not clear, technology component index is
  low level.

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Vietnam under reform

• Quality of Growth (cont.)
• Only 50 of export value is manufactures goods
  and 2 is high-tech goods.
• International reserve is small (enough for about
  10-12 week import)
• International import is surplus (about 15 import
  value)

• Economic Structure change in sectors with row
  material expenditures are high
• Industrial output increase 16-17, but MVA
  increase only 10
• Agricultural output increase 5-6, but value
  added increase only 3-4

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Vietnam under reform

• Quality of Growth (cont.)
• The gap between Vietnam and neighbors in bigger
• 1976 1979 2004
• VN 101 320 550
• Thai 380 2700 2540
• Gap 279 2380 1990

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Vietnam under reform

• 2- Many critical issues in social matters
• GINI increasing from 0.36 in 1995 to 0.42 in
  2004
• The gap between Income of 20 richest and 20
  poorest is larger and now about 8-10 times

• Under conditions Vietnam is low income country,
  the rate of poor people is high (2PPP/day)
• 1990 87.0
• 1996 69.4
• 2000 63.5
• 2002 58.2
• 2004 53.4

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Vietnam under reform

• Poverty rate is reduced, but the gap between
  regions is large

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Vietnam under reform

• Environment issues
• 1- Rural population is decreasing
• 1980 81 and 2002 75
• 2- Forest area 2000 30,2, 2005 38
• 3- Energy use CO2
• 1990 24.7 mil TOE 22.5 mil T of CO2 and
• 2001 39.4 mil TOE 57.5 mil T of CO2
• 4- Irrigated land
• 1989-91 44.8
• 2000-02 34.8

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Vietnam under reform

• Main targets to 2010
• - GDP per-capita over 1000 by the year 2010,
  with agriculture share of GDP will less than 15
  percent
• Share of agriculture in labor force is 50 percent
• Forestry cover rate is more 42-43 percent

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Vietnam under reform

• Directions for the future
• Comprehensive Reform
• Economic,
• Social and cultural
• Environment and natural resources protection
• follow sustainable development

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Vietnam under reform

• Directions for the future
• Institutional Reform follow market-economy
  directions under globalization
• framework

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Vietnam under reform

• Directions for the future
• Administrative Reform
• Organization,
• Hunan resources,
• Legal framework

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Vietnam under reform
Thank you