Economy Of Vietnam

The economy of Vietnam is distinguished by its classification as a developing mixed socialist-oriented market economy, a distinctive system that integrates elements of socialism with market-based mechanisms. This hybrid model reflects the country’s efforts to balance state control and planning with the efficiencies and dynamism of market forces. The socialist orientation manifests in the continued role of the Communist Party of Vietnam in guiding economic policy and strategic sectors, while market mechanisms facilitate private enterprise, foreign investment, and international trade. This duality has allowed Vietnam to harness the benefits of both centralized planning and competitive markets, fostering economic modernization and growth. In terms of global economic rankings, Vietnam holds a significant position. It is recognized as the 33rd-largest economy worldwide when measured by nominal gross domestic product (GDP), a metric that calculates economic output based on current market exchange rates without adjustments for cost of living differences. When assessed by purchasing power parity (PPP), which accounts for relative price levels and provides a more accurate measure of living standards and economic productivity, Vietnam ranks even higher as the 26th-largest economy globally. These rankings underscore the country’s substantial economic scale and its growing influence in the international economic arena. Vietnam is classified as a lower-middle-income country by the World Bank, a designation that reflects its per capita income relative to global standards. This classification is accompanied by a relatively low cost of living, which has contributed to the country’s attractiveness for both domestic consumption and foreign investment. The affordability of goods and services supports a growing middle class and expanding consumer market, while also providing a competitive advantage in labor-intensive industries and export-oriented manufacturing. Vietnam’s integration into the global economy is further evidenced by its active membership in several major international economic organizations. The country is a member of the Asia-Pacific Economic Cooperation (APEC), a forum that promotes free trade and economic cooperation throughout the Asia-Pacific region. Additionally, Vietnam is part of the Association of Southeast Asian Nations (ASEAN), a regional intergovernmental organization aimed at accelerating economic growth, social progress, and cultural development among its ten member states. Vietnam also joined the World Trade Organization (WTO) in 2007, a milestone that facilitated its deeper integration into the global trading system by committing to international trade rules and reducing trade barriers. These memberships have enabled Vietnam to expand its trade networks, attract foreign direct investment, and participate actively in regional and global economic governance. The transformation of Vietnam’s economy since the mid-1980s is closely linked to the Đổi Mới (“Renovation”) reform period, which marked a pivotal shift from a highly centralized planned economy to a mixed economy incorporating market-oriented reforms. Prior to Đổi Mới, the Vietnamese economy operated under a command system characterized by state ownership of production means, centralized decision-making, and limited private enterprise. The reforms introduced in 1986 aimed to liberalize the economy by encouraging private business development, decentralizing economic management, promoting export-led growth, and opening the country to foreign investment. This gradual transition facilitated increased productivity, diversification of the economy, and integration into global markets, setting the foundation for rapid economic expansion in subsequent decades. Historically, the economic trajectories of North and South Vietnam diverged significantly prior to reunification in 1975. South Vietnam’s economy was heavily dependent on aid from the United States, which provided substantial financial and military support during the Vietnam War era. This aid underpinned South Vietnam’s relatively market-oriented economy, which included private enterprise and foreign investment. In contrast, North Vietnam operated under a centrally planned socialist economy, relying extensively on aid from communist allies such as the Soviet Union, China, and other Eastern Bloc countries. Following reunification, the entire country adopted a socialist economic model, continuing to depend on communist aid until the dissolution of the Soviet Union in 1991. The loss of this support was a catalyst for the economic reforms embodied in Đổi Mới, as Vietnam sought new pathways for development and international engagement. Vietnam’s economic management employs a blend of directive and indicative planning methods, primarily through the implementation of five-year plans. These plans outline national economic and social development goals, guiding investment priorities, sectoral targets, and resource allocation. Directive planning involves the government setting binding targets and policies for key industries and state-owned enterprises, while indicative planning provides guidance and forecasts to inform market participants without mandating specific outcomes. This dual approach allows the Vietnamese government to maintain strategic oversight and long-term vision, while accommodating the flexibility and responsiveness of an open market-based economy. The five-year plans serve as important instruments for coordinating public and private sector activities, fostering sustainable growth, and addressing socio-economic challenges. Over recent decades, Vietnam’s economy has experienced rapid growth and increasing integration into the global economy, particularly throughout the 21st century. Economic liberalization, export-oriented industrialization, and improvements in infrastructure and human capital have contributed to sustained high growth rates. The country has become a major player in global supply chains, especially in manufacturing sectors such as textiles, electronics, and footwear. Vietnam’s participation in numerous free trade agreements and regional partnerships has further enhanced its access to international markets. This dynamic growth has lifted millions out of poverty, expanded the middle class, and transformed Vietnam into one of the most vibrant emerging economies in Southeast Asia. The vast majority of Vietnamese enterprises are small and medium enterprises (SMEs), which constitute the backbone of the national economy. SMEs play a critical role in employment generation, innovation, and economic diversification. They operate across various sectors including agriculture, manufacturing, services, and trade, often serving as suppliers and subcontractors to larger firms. Despite challenges such as limited access to finance and technology, SMEs contribute substantially to domestic economic activity and export performance. The government has implemented policies aimed at supporting SME development through improved regulatory frameworks, capacity building, and enhanced access to credit, recognizing their importance in sustaining inclusive economic growth. Vietnam has emerged as a leading exporter in agriculture, leveraging its favorable climate, abundant labor force, and government support to become one of the world’s largest producers and exporters of commodities such as rice, coffee, cashew nuts, pepper, and seafood. Agricultural exports form a significant component of the country’s trade balance and rural livelihoods. Concurrently, Vietnam has become an attractive destination for foreign direct investment (FDI) within Southeast Asia, driven by factors including political stability, competitive labor costs, strategic geographic location, and a growing domestic market. FDI inflows have been concentrated in manufacturing, real estate, telecommunications, and energy sectors, contributing to technology transfer, infrastructure development, and export capacity expansion. A forecast by PricewaterhouseCoopers (PwC) in February 2017 projected that Vietnam could become the fastest-growing economy worldwide, with a potential annual GDP growth rate of approximately 5.1 percent. This optimistic outlook was based on factors such as ongoing economic reforms, demographic advantages including a young and increasingly skilled workforce, rising domestic consumption, and expanding export markets. The forecast highlighted Vietnam’s capacity to sustain high growth rates over the medium to long term, positioning it as a key emerging market with significant investment opportunities. Building on this growth trajectory, PwC anticipated that Vietnam’s economy could ascend to become the 10th-largest in the world by 2050. This projection reflected expectations of continued structural transformation, technological adoption, and integration into global value chains. The forecast underscored Vietnam’s potential to transition from a lower-middle-income country to an upper-middle or high-income economy within several decades, driven by productivity gains, urbanization, and enhanced human capital development. Vietnam is recognized as part of the “Next Eleven” group of emerging economies, a classification coined by Goldman Sachs to identify countries with high potential for rapid economic development and significant contributions to global economic growth. In addition to this designation, Vietnam is included among the CIVETS countries, an acronym representing Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa, which share characteristics such as dynamic populations, diversified economies, and improving business environments. These classifications highlight Vietnam’s strategic importance as an emerging market with favorable demographic trends, reform momentum, and increasing integration into the global economy, suggesting a promising outlook for sustained economic advancement.

Vietnamese civilization was fundamentally agrarian, with its economy and social structure deeply rooted in agriculture. Throughout its history, feudal dynasties consistently regarded agriculture as the primary economic foundation, shaping their governance and economic philosophies around this principle. The dominant economic thought was heavily influenced by physiocracy, a doctrine that emphasized the importance of land and agricultural production as the source of all wealth. This perspective underscored the centrality of farming in sustaining the state and its population, guiding policies that prioritized the development and protection of agricultural resources. Land ownership in Vietnam was systematically regulated by the ruling authorities to ensure efficient agricultural production and social order. The state implemented laws and customs to manage the distribution and use of land, often reinforcing the rights of peasant farmers while maintaining the control of the aristocracy and royal family over large estates. To support the intensive cultivation of wet rice, particularly in the fertile Red River Delta, the Vietnamese undertook large-scale infrastructure projects. These included the construction and maintenance of extensive dyke systems designed to control flooding and irrigation, which were crucial for maximizing rice yields in this low-lying and water-rich region. The success of these hydraulic works not only enhanced agricultural productivity but also demonstrated the state’s commitment to sustaining its agrarian economy. During periods of peace, the Vietnamese military adopted a unique approach that reflected the agrarian focus of society. Soldiers were often demobilized and sent back to their villages to engage in farming activities, integrating military service with agricultural labor. This practice ensured that the population remained productive and that the agricultural sector was not neglected even in times of reduced conflict. It also reinforced the close connection between the military and rural communities, as soldiers maintained their ties to the land and contributed to the economic well-being of their localities. The royal court took several measures to emphasize the importance of agriculture and protect its essential resources. One notable policy was the prohibition of slaughtering water buffalo and cattle, animals that were indispensable for plowing fields and performing other agricultural tasks. By safeguarding these draft animals, the state ensured the continuity and efficiency of farming operations. Furthermore, the monarchy conducted numerous ceremonies and rituals related to agriculture, which served both religious and political purposes. These ceremonies reinforced the symbolic significance of farming in Vietnamese society and highlighted the ruler’s role as the protector and promoter of agricultural prosperity. While handicrafts and the arts were highly esteemed in Vietnamese culture, commerce occupied a less favorable position. Merchants were often looked down upon and referred to by the derogatory term con buôn, reflecting a social hierarchy that placed agricultural producers and artisans above traders. This disdain for commerce was rooted in Confucian values that prioritized self-sufficiency and moral integrity over profit-seeking activities. Despite this social stigma, commercial activities did exist and contributed to the economy, albeit in a more subdued and regulated manner compared to agriculture and handicrafts. Thang Long, known today as Hanoi, emerged as the principal center for handicraft manufacturing in Vietnam. The city became a hub for skilled artisans producing a wide range of goods, from textiles to metalwork, which supported both local consumption and trade. The concentration of handicraft production in Thang Long reflected its status as a political and cultural capital, attracting craftsmen and fostering the development of specialized industries. This manufacturing base complemented the agricultural economy and provided additional sources of livelihood for the urban population. Chinese observers during various historical periods noted that Vietnamese commercial practices bore a resemblance to those of the Chinese Song dynasty, indicating a sophisticated level of trade and business activity. This comparison suggests that Vietnamese merchants and traders employed advanced techniques and organizational structures similar to those found in one of China’s most economically vibrant eras. The adoption and adaptation of such practices facilitated the integration of Vietnam into regional trade networks and enhanced the efficiency of its commercial exchanges. Between the 9th and 13th centuries, Vietnam actively engaged in trade involving ceramics and silks with several regional powers, including China, Champa, Western Xia, and Java. These exchanges not only brought valuable goods into Vietnam but also allowed Vietnamese products to reach distant markets, fostering economic and cultural interactions across East and Southeast Asia. The trade in ceramics and silks was particularly significant, as these items were highly prized for their quality and artistic merit. This period of commercial activity reflects Vietnam’s participation in the broader maritime and overland trade routes that connected diverse civilizations. Archaeological discoveries have provided tangible evidence of Vietnam’s historical trade connections and the presence of foreign communities within its territory. For instance, Muslim ceramics unearthed in Hanoi’s Old Quarter indicate that Muslim traders resided in the city from approximately the 9th to 10th centuries. These findings highlight the cosmopolitan nature of Thang Long as a trading port and cultural crossroads, where merchants from different parts of Asia converged to conduct business. The presence of Muslim traders also underscores the early integration of Vietnam into the Indian Ocean trade network and the spread of Islamic commercial influence. From the 16th century onward, the influence of Confucianism in Vietnamese society began to wane, coinciding with the emergence of a monetary pre-capitalist economy. This transition marked a shift away from the strictly agrarian and hierarchical social order towards a more dynamic economic environment characterized by increased use of currency and the growth of market activities. The decline of Confucian dominance allowed for greater flexibility in economic practices and the rise of new social classes involved in commerce and industry. This period set the stage for the gradual modernization of Vietnam’s economy and the expansion of its trade networks. During the Lê–Mạc period, the Vietnamese state took active measures to promote semi-industrial businesses and maritime trade, recognizing their potential to strengthen the economy. The government supported the development of industries such as shipbuilding, salt production, and textile manufacturing, which complemented the traditional agricultural base. Maritime trade was particularly emphasized, as Vietnam sought to expand its commercial reach and engage with regional and international markets. These initiatives laid the economic foundations that would sustain the country for the next 250 years, fostering a more diversified and outward-looking economy. Urban centers such as Đông Kinh (the historical name for Hanoi) and Hội An experienced rapid growth during this era due to accelerated urbanization driven by increased trade and industrial activity. These cities became vibrant hubs of commerce, culture, and manufacturing, attracting merchants, artisans, and laborers from across the region. However, this expansion was later curtailed as foreign powers began to perceive these thriving urban centers as economic threats to their own interests. Consequently, restrictions were imposed to limit the growth and influence of these cities, reflecting the geopolitical tensions and competitive dynamics of the period. By the 17th century, Vietnam’s economy had reached its zenith, positioning the country as the third-largest economic power in East Asia and Southeast Asia. This remarkable achievement was the result of sustained agricultural productivity, flourishing handicraft industries, and robust trade networks that connected Vietnam to major regional markets. The country’s economic prominence during this time underscored its strategic importance and the effectiveness of its economic policies in fostering growth and stability. The late 18th century, however, brought significant economic decline to Vietnam. This downturn was precipitated by a combination of devastating epidemics, natural disasters, and the widespread destruction caused by the Tây Sơn peasant rebellion. The rebellion, which challenged the existing feudal order, resulted in considerable damage to agricultural lands, infrastructure, and urban centers, severely disrupting economic activities. The compounded effects of these crises weakened the country’s economic foundation and contributed to social and political instability. In 1806, Emperor Gia Long of the Nguyễn dynasty implemented the “Sea Ban policy,” a restrictive measure that prohibited all Vietnamese overseas trade and barred Western merchants from entering the country. This policy aimed to control foreign influence and protect domestic interests by limiting external commercial interactions. However, the ban on maritime trade effectively isolated Vietnam from expanding global trade networks at a time when other nations were increasingly engaging in international commerce. The policy reflected a conservative approach to economic management, prioritizing security and sovereignty over economic openness. The “Sea Ban policy” contributed to economic stagnation in early 19th-century Vietnam by curtailing opportunities for trade expansion and technological exchange. Many historians consider this policy a factor that led to the country’s eventual colonization by France, as the lack of economic dynamism weakened Vietnam’s ability to resist foreign domination. Nevertheless, the causation remains subject to debate and verification, with some scholars arguing that other political, social, and military factors played more decisive roles in the colonial conquest. Regardless, the policy’s impact on Vietnam’s economic trajectory during this period is widely acknowledged as significant.

Prior to French colonization in the mid-19th century, Vietnam’s economy was predominantly agrarian and subsistence-based, deeply rooted in village life and traditional agricultural practices. The vast majority of the population engaged in small-scale farming, primarily cultivating rice, which served as the staple food and the foundation of rural livelihoods. Economic activities were largely localized, with limited commercialization or integration into broader markets, and the economy functioned within a self-sufficient framework where villages produced most of what they consumed. Artisanal crafts and small-scale handicrafts supplemented agricultural production, but large-scale industrial or commercial enterprises were virtually nonexistent, reflecting the pre-colonial Vietnamese economy’s reliance on natural resources and manual labor. With the advent of French colonial rule, the administration implemented deliberate policies to reshape Vietnam’s economic landscape according to colonial interests, resulting in a marked regional differentiation in economic development. The French designated the southern region, known as Cochinchina, as the primary area for agricultural production, capitalizing on its fertile soil and favorable climate for farming. Conversely, the northern region, Tonkin, was developed as the center for manufacturing and industrial activities due to its abundant mineral resources, including coal and iron ore. This strategic division was intended to optimize the extraction and export of raw materials while facilitating the importation of French manufactured goods, thereby integrating Vietnam into the global colonial economy as a supplier of primary commodities and a consumer of European products. Although the regional economic division imposed by the French exaggerated existing differences, it led to the emergence of key export commodities that shaped Vietnam’s economic profile during the colonial period. Coal mining in the North became a significant industry, with the extraction of this vital energy resource supporting both local manufacturing and export demands. In the South, rice cultivation expanded considerably, becoming a major export crop alongside the introduction of plantation agriculture. The importation of French manufactured goods stimulated domestic commerce, creating a market for consumer products and fostering the growth of trade networks, particularly in urban centers. However, this imposed separation distorted the traditional Vietnamese economy by overemphasizing regional specialization and disrupting the integrated nature of pre-colonial economic activities. In southern Vietnam, irrigated rice continued to serve as the principal subsistence crop for the rural population, sustaining local food security and traditional farming practices. Nevertheless, the French colonial administration introduced plantation agriculture on a larger scale, cultivating cash crops such as tea, cotton, and tobacco to meet international market demands. These plantations often relied on forced labor or exploitative labor arrangements, reflecting the colonial imperative to maximize profits from agricultural exports. The expansion of plantation agriculture altered land use patterns and social relations in the countryside, contributing to economic disparities and transforming the rural landscape. The colonial government also prioritized the development of extractive industries to exploit Vietnam’s mineral wealth, focusing on the mining of coal, iron, and nonferrous metals. These industries were instrumental in supplying raw materials for both local industrial activities and exports to France and other markets. Mining operations were concentrated in the northern and central regions, where mineral deposits were most abundant. The growth of extractive industries necessitated the establishment of infrastructure such as railroads and ports to facilitate the transportation of minerals, further integrating Vietnam into the colonial economy and enabling the expansion of industrial activities. Industrial development under French rule included the establishment of a shipbuilding industry in Hanoi, which served both military and commercial purposes. The construction of railroads, roads, power stations, and hydraulic works represented significant investments in infrastructure aimed at supporting economic growth and colonial administration. Railroads connected key economic regions, facilitating the movement of goods and labor, while power stations and hydraulic projects improved energy supply and agricultural productivity through irrigation and flood control. These developments contributed to the modernization of Vietnam’s economy but were primarily designed to serve colonial extraction and control rather than indigenous economic advancement. Agricultural development in the South remained heavily focused on rice cultivation, which continued to dominate land use and labor allocation. Rice and rubber emerged as the main national export commodities, with rubber plantations expanding rapidly to meet global demand for this industrial raw material. The cultivation of rubber, alongside rice, became a cornerstone of the southern economy, attracting foreign investment and increasing Vietnam’s integration into international markets. The emphasis on export-oriented agriculture reinforced the region’s role as the colonial economic hinterland, supplying raw materials to global industries while relying on imported manufactured goods. Domestic and foreign trade activities were concentrated in the Saigon-Cholon area, which developed into the commercial and financial hub of southern Vietnam. Saigon, as the colonial capital of Cochinchina, hosted a vibrant market economy with numerous trading firms, banks, and commercial enterprises facilitating the exchange of goods both within Vietnam and with international partners. The concentration of trade in this urban center reflected the colonial economic structure that prioritized export production and the importation of consumer goods. The commercial dynamism of Saigon-Cholon attracted migrants and entrepreneurs, contributing to urban growth and the diversification of economic activities beyond agriculture. Industrial activity in the South primarily consisted of food-processing plants and factories producing consumer goods, which catered to the growing urban population and the demands of the colonial administration. These industries included rice milling, sugar refining, and the processing of rubber and other agricultural products, adding value to raw materials before export or domestic consumption. Factories producing textiles, tobacco products, and other consumer goods also emerged, reflecting the increasing commercialization of the southern economy. However, industrial development remained limited in scale and largely dependent on imported machinery and capital, with most profits flowing to French colonial enterprises. Following the political division of Vietnam in 1954, the North and South adopted fundamentally different economic systems reflective of their respective political ideologies. The Democratic Republic of Vietnam (North Vietnam) implemented a socialist economic model characterized by state ownership of the means of production, centralized planning, and collectivization of agriculture. In contrast, the Republic of Vietnam (South Vietnam) pursued a capitalist economic system that emphasized private enterprise, market mechanisms, and foreign investment, particularly from the United States and its allies. This divergence in economic organization shaped the development trajectories of the two regions and influenced their responses to the challenges posed by ongoing conflict and reconstruction. The Second Indochina War, which lasted from 1955 to 1975, imposed severe economic strain on both North and South Vietnam due to widespread destruction of infrastructure, disruption of agricultural production, and diversion of resources to military efforts. The protracted conflict devastated urban centers, transportation networks, and industrial facilities, undermining economic stability and growth. Agricultural output declined as rural areas became battlegrounds or were abandoned, leading to food shortages and increased dependence on external aid. The war’s economic toll was compounded by the need to sustain large military forces and support populations displaced by fighting. The human cost of the war further exacerbated Vietnam’s economic difficulties, with approximately 1.5 million military and civilian deaths resulting from combat, bombings, and related hardships. This massive loss of life not only reduced the labor force but also inflicted profound social and psychological damage on communities, hindering economic recovery and development. The destruction of human capital, alongside physical infrastructure, created long-term challenges for post-war reconstruction and the reestablishment of productive economic activity. In addition to casualties, the conflict triggered an exodus of about 1 million refugees, including tens of thousands of professionals, intellectuals, technicians, and skilled workers who fled the country. This brain drain significantly weakened the economy by depriving it of essential human resources needed for administration, education, industry, and technical innovation. The departure of educated and skilled individuals undermined institutional capacity and slowed efforts to rebuild and modernize the economy, particularly in the South, where many refugees sought asylum in Western countries. Economic data from the period between 1956 and 1974 illustrate the divergent trends in GDP per capita for the two regions, reflecting the impact of political division and war on economic performance. In the Republic of Vietnam (South Vietnam), GDP per capita in US dollars per year was recorded as 62 in 1956, increasing to 88 in 1958 and 105 in 1960. However, this growth was uneven, with fluctuations including a decline to 100 in 1962, a rise to 118 in 1964, followed by decreases to 100 in 1966, 85 in 1968, and 81 in 1970. A modest recovery to 90 occurred in 1972 before a sharp drop to 65 in 1974, indicating economic instability exacerbated by the intensification of the war and political turmoil. In contrast, the Democratic Republic of Vietnam (North Vietnam) experienced a more gradual and modest increase in GDP per capita during the same period. Starting at 40 US dollars in 1956, the figure rose to 50 in 1958 and 51 in 1960, followed by a more notable increase to 68 in 1962. Subsequent years saw fluctuations with a decline to 59 in 1964, a slight rise to 60 in 1966, a fall to 55 in 1968, and stabilization around 60 from 1970 to 1972. By 1974, GDP per capita reached 65, reflecting the North’s ability to maintain economic output despite the war’s hardships and the implementation of socialist economic policies. These data underscore the contrasting economic experiences of the two regions during a period marked by conflict, political division, and differing economic systems.

The Vietnamese government’s Second Five-Year Plan, spanning from 1976 to 1981, set forth ambitious objectives aimed at achieving high annual growth rates across both industrial and agricultural sectors, alongside a significant increase in national income. This plan also prioritized the economic integration of North and South Vietnam following reunification in 1975, envisioning a unified economic framework that would harmonize production and development strategies across the formerly divided regions. However, these lofty goals were not realized during the plan’s implementation period. The economy struggled to meet the targeted growth rates due to a variety of structural and systemic challenges that impeded progress. The envisioned rapid industrialization and agricultural expansion failed to materialize as planned, and the hoped-for integration between the north and south’s economic systems encountered numerous obstacles stemming from differing regional legacies and resource disparities. Throughout this period, Vietnam’s economy remained predominantly characterized by small-scale production units, which limited economies of scale and constrained productivity improvements. Labor productivity was notably low, reflecting both the limited technological advancement and the scarcity of modern equipment and inputs necessary for efficient production. The economy also suffered from chronic shortages of essential materials and outdated technology, which further hampered efforts to modernize industrial and agricultural output. These shortages extended to the consumer sector, where there was a persistent insufficiency in the supply of food and other consumer goods, resulting in widespread scarcity and dissatisfaction among the population. The inability to adequately supply basic necessities underscored the broader inefficiencies within the centrally planned economic system and highlighted the challenges of transitioning from a wartime economy to peacetime reconstruction. In response to the underperformance of the Second Five-Year Plan, the Third Five-Year Plan, covering 1981 to 1985, adopted more modest and pragmatic goals. This plan represented a compromise between ideological hardliners who favored strict centralized control and reform-minded pragmatists advocating for more flexible economic management. The Third Plan emphasized balanced development in both agriculture and industry, recognizing the need to boost agricultural productivity to ensure food security while simultaneously fostering industrial growth. A key feature of this plan was the decentralization of economic planning, which aimed to grant greater autonomy to local and regional authorities in decision-making processes. Additionally, the plan sought to improve the managerial skills of government officials responsible for economic administration, addressing the widespread bureaucratic inefficiencies that had previously hindered effective policy implementation. These reforms were intended to create a more responsive and adaptive economic system capable of overcoming the stagnation experienced during the previous plan. Following the reunification of Vietnam in 1975, the economy encountered severe difficulties that compounded the challenges inherited from wartime disruption. Production faced numerous obstacles, including damaged infrastructure, a lack of capital, and limited technological capacity. There was a pronounced imbalance between supply and demand, with the economy unable to produce sufficient goods to meet the needs of the population. Inefficiencies in distribution and circulation systems further exacerbated shortages, as goods were often delayed or failed to reach intended markets. Inflation soared during this period, eroding purchasing power and destabilizing the economy. Concurrently, the government’s external debt increased, placing additional strain on financial resources and limiting the capacity for investment in reconstruction and development. These combined factors created a precarious economic environment that hindered recovery and growth. Vietnam experienced a rare and severe economic deterioration during its postwar reconstruction period, a phenomenon uncommon among countries emerging from conflict. This downturn resulted in Vietnam becoming one of the poorest peacetime economies globally, with national output growth stagnating or even contracting. Both agricultural and industrial sectors suffered from negative to very slow growth rates, reflecting the systemic challenges that constrained productivity and development. The country’s economic malaise was marked by widespread poverty, food insecurity, and limited access to consumer goods, which collectively undermined social stability and development prospects. This period of economic hardship underscored the difficulties of transitioning from a war-torn economy to a stable and growing one, particularly under the constraints of a centrally planned socialist model. By 1984, Vietnam’s gross domestic product (GDP) was valued at approximately US$18.1 billion, reflecting the limited scale and productivity of the economy at the time. Per capita income was estimated to be between US$200 and US$300 annually, indicating a low standard of living for the average Vietnamese citizen. These figures highlighted the country’s economic underdevelopment and the significant gap between Vietnam and more industrialized nations. The low per capita income also reflected the widespread poverty and limited economic opportunities available to the population during this period. Several factors contributed to the poor economic performance experienced by Vietnam in the late 1970s and early 1980s. Severe climatic conditions, including droughts and floods, adversely affected agricultural output, which was a critical sector for food security and export earnings. Bureaucratic mismanagement and inefficiencies within the centrally planned system hindered effective resource allocation and economic coordination. The government’s elimination of private ownership and the suppression of market mechanisms led to the extinction of entrepreneurial classes, particularly in the South, which had previously been a source of economic dynamism and innovation. Additionally, Vietnam’s military occupation of Cambodia from 1978 to 1989 resulted in international isolation and the cutoff of reconstruction aid from Western and other donor countries, further exacerbating economic difficulties. This combination of adverse factors created a challenging environment for economic recovery and growth. From the late 1970s through the early 1990s, Vietnam was a member of the Council for Mutual Economic Assistance (Comecon), an economic organization led by the Soviet Union that coordinated trade and economic policies among socialist countries. During this period, Vietnam’s economy became heavily dependent on trade with the Soviet Union and its Eastern Bloc allies. This dependence provided Vietnam with access to markets for its exports and sources of essential imports, including machinery, technology, and fuel. However, the reliance on Comecon trade also made Vietnam vulnerable to shifts in the geopolitical landscape and the economic health of its socialist partners. The dissolution of Comecon in the early 1990s and the subsequent collapse of the Soviet Union removed this critical support network, forcing Vietnam to reconsider its economic strategy and trading relationships. Following the disintegration of Comecon and the loss of traditional trading partners, Vietnam undertook significant economic liberalization measures. The government liberalized trade policies to encourage greater integration with global markets and reduce reliance on a narrow set of partners. Exchange rates were devalued strategically to boost export competitiveness, making Vietnamese goods more attractive on the international market. Concurrently, Vietnam pursued broader economic development policies aimed at stimulating growth through increased foreign investment, private sector participation, and market-oriented reforms. These policy shifts marked a departure from the rigid centrally planned model and signaled Vietnam’s commitment to economic modernization and integration into the global economy. Between 1975 and 1994, the United States imposed a comprehensive trade embargo on Vietnam that lasted for nineteen years. This embargo prohibited any trade between the two countries throughout this period, severely limiting Vietnam’s access to one of the world’s largest markets and restricting opportunities for economic engagement with Western economies. The embargo was a significant obstacle to Vietnam’s economic development, contributing to its international isolation and constraining foreign investment and technology transfer. The embargo remained in place until diplomatic relations between the United States and Vietnam were normalized in the mid-1990s. In 1986, Vietnam launched the Đổi Mới (Renovation) campaign, a political and economic renewal initiative designed to transition the country from a strictly centralized economy to a “socialist-oriented market economy.” This reform program sought to combine the principles of socialism with the efficiency and dynamism of market mechanisms. Đổi Mới introduced a range of reforms, including the decentralization of economic decision-making, encouragement of private enterprise, and the promotion of foreign investment. The campaign marked a fundamental shift in economic policy, aiming to revitalize growth, improve living standards, and integrate Vietnam more fully into the global economy. Under Đổi Mới, the government combined centralized planning with free-market incentives, creating a hybrid economic model that retained socialist objectives while allowing market forces to play a greater role. The reforms encouraged the establishment of private businesses, which had been largely suppressed under previous policies, thereby fostering entrepreneurship and innovation. Foreign investment was actively promoted, including the establishment of foreign-owned enterprises, which brought capital, technology, and managerial expertise into the country. These measures helped to diversify the economy, increase productivity, and expand export capacity, laying the foundation for sustained economic growth. Alongside economic reforms, the Vietnamese government implemented a two-child policy aimed at lowering birth rates to support sustainable development. This population control measure was introduced in conjunction with efforts to develop economic and social rights, reflecting a holistic approach to national development. By managing population growth, the government sought to reduce pressure on resources, improve health and education outcomes, and enhance the overall quality of life for its citizens. The policy was part of a broader strategy to create favorable conditions for economic modernization and social progress. By the late 1990s, the Đổi Mới reforms had yielded significant positive outcomes. More than 30,000 private businesses had been established, reflecting a vibrant and expanding private sector. Annual economic growth rates consistently exceeded 7%, signaling a robust recovery and dynamic expansion of the Vietnamese economy. Poverty levels were nearly halved during this period, indicating substantial improvements in living standards and social welfare. These achievements underscored the effectiveness of the reform program in transforming Vietnam’s economic landscape and improving the well-being of its population. Since the early 1990s, Vietnam underwent a structural shift away from an economy dominated by agriculture, although this transition did not result in significant industrialization as traditionally defined. Instead, the country moved toward a service-oriented globalization model, with increasing integration into international trade and investment networks. This shift reflected changes in the global economy and Vietnam’s strategic adaptation to new opportunities in sectors such as tourism, telecommunications, finance, and logistics. The growing importance of services complemented ongoing developments in manufacturing and agriculture, contributing to a more diversified and resilient economic structure. In 1990, the Vietnamese government prioritized the state sector as the primary focus for industrialization efforts. This approach marked a transition away from the bottom-up commercialization processes that had characterized the 1980s, favoring a more coordinated and large-scale development strategy. The emphasis on state-led industrialization aimed to build supply capacity and develop key industries that could support broader economic growth. This strategy proved instrumental in creating the necessary infrastructure and production capabilities that helped Vietnam avoid severe economic shocks following the withdrawal of Soviet aid in the early 1990s. The supply capacity established through state-led industrialization enabled Vietnam to sustain rapid economic growth throughout the 1990s. The enhanced industrial base provided inputs and intermediate goods essential for expanding manufacturing and export activities. This foundation allowed the economy to absorb external shocks more effectively and maintain momentum in its development trajectory. The growth experienced during this decade reflected the combined effects of structural reforms, improved production capacity, and increased engagement with global markets. During the 1990s, Vietnam’s exports experienced significant growth, increasing by 20% to 30% in some years. By 1999, exports accounted for approximately 40% of the country’s gross domestic product, underscoring the growing importance of international trade to the Vietnamese economy. This export expansion occurred despite the Asian economic crisis that affected many neighboring countries, demonstrating Vietnam’s relative resilience and the effectiveness of its economic policies. The diversification of export markets and products contributed to this success, as did the country’s competitive labor costs and improving infrastructure. Vietnam joined the World Trade Organization (WTO) in 2007, a milestone that marked its full integration into the global trading system. WTO membership eliminated textile quotas that had been imposed by the Multi Fibre Arrangement (MFA), which was established in 1974 to restrict textile imports from developing countries. The removal of these quotas allowed Vietnamese textile exports to enter major markets without quantitative limitations, significantly enhancing the competitiveness of Vietnam’s garment industry. This development opened new opportunities for export growth and foreign investment in one of the country’s key manufacturing sectors. The textile quotas under the MFA expired for China and other WTO members at the end of 2004, following agreements reached during the 1994 Uruguay Round trade negotiations. The expiration of these quotas represented a major liberalization of global textile trade, allowing countries like Vietnam to compete on a more level playing field. The removal of restrictions facilitated the expansion of textile and garment exports from developing countries, contributing to shifts in global production patterns and trade flows. A 2019 study examining the impact of Vietnam’s WTO accession found that the country’s integration into the global trading system resulted in substantial productivity gains for private firms. These firms benefited from increased market access, technology transfer, and competitive pressures that incentivized efficiency improvements. However, the study noted that state-owned enterprises (SOEs) did not experience similar productivity gains, reflecting structural and institutional constraints within the state sector. The presence of SOEs moderated the overall productivity improvements; without the SOEs, the aggregate productivity gains following WTO accession would have been approximately 40% larger. This finding highlighted the ongoing challenges of reforming the state sector and the differential impact of globalization on various segments of the Vietnamese economy.

Following the 1997 Asian Financial Crisis, Vietnam adopted a cautious economic policy that prioritized macroeconomic stability over rapid growth. The government maintained strong control over key sectors such as banking, state-owned enterprises (SOEs), and foreign trade, reflecting a deliberate approach to safeguard the economy from external shocks and internal vulnerabilities. This strategy marked a departure from earlier periods of aggressive economic liberalization, emphasizing prudence and gradual reform to ensure sustainable development. By retaining significant state influence in critical areas, Vietnam sought to stabilize its financial system and prevent the kind of speculative excesses that had destabilized other economies in the region. As a consequence of this cautious policy stance, Vietnam’s GDP growth declined to 6% in 1998 and further slowed to 5% in 1999. These figures represented a significant slowdown compared to the rapid expansion of the early 1990s but were indicative of the broader regional economic malaise following the crisis. However, from 2000 onwards, Vietnam experienced a resurgence of economic growth, achieving continuous real GDP growth rates of at least 5% annually. This recovery reflected both the stabilization of the domestic economy and the gradual reintegration of Vietnam into the global economic system, supported by ongoing reforms and expanding trade relations. A pivotal moment in Vietnam’s economic development occurred on July 13, 2000, when Vietnam and the United States signed the Bilateral Trade Agreement (BTA). This agreement granted Vietnamese goods “normal trade relations” status in the U.S. market, effectively eliminating previous trade barriers and tariffs. The BTA was expected to accelerate Vietnam’s transition from an agrarian economy to a manufacturing-based, export-oriented economy. It also served as a catalyst for attracting foreign investment not only from the United States but also from Europe, Asia, and other regions, thereby integrating Vietnam more deeply into global supply chains and enhancing its export capacity. In 2001, the Communist Party of Vietnam approved a comprehensive 10-year economic plan that sought to increase the role of the private sector while reaffirming the primacy of the state in guiding economic development. This plan reflected a nuanced approach to reform, balancing market liberalization with state oversight. Between 2000 and 2002, Vietnam’s GDP growth rose to between 6% and 7%, despite a global recession that dampened economic activity worldwide. During this period, Vietnam emerged as the world’s second fastest-growing economy, underscoring the effectiveness of its reform strategy and its resilience in the face of external economic challenges. The period from 2000 to 2002 also witnessed a significant surge in investment and savings within Vietnam. Investment levels tripled, reflecting increased confidence from both domestic and foreign investors. Concurrently, domestic savings rose fivefold, signaling a strengthening of the country’s financial foundations and the accumulation of capital necessary for sustained economic expansion. This robust economic momentum provided the resources and stability needed to support ongoing reforms and infrastructure development. By 2003, the private sector had become a substantial contributor to Vietnam’s industrial output, accounting for more than 25% of total production. This marked a significant shift from the historically dominant role of state-owned enterprises. However, between 2003 and 2005, Vietnam’s ranking in the World Economic Forum’s global competitiveness report declined sharply. This decline was largely attributed to negative perceptions regarding the effectiveness of government institutions, which were seen as impediments to business development and economic efficiency. The report highlighted systemic weaknesses that undermined Vietnam’s ability to compete globally. Among the major challenges identified were endemic official corruption, weak property rights, inefficient market regulations, and slow progress in reforming labor and financial markets. These issues hindered the country’s competitiveness by creating uncertainty for investors and limiting the efficient allocation of resources. Corruption, in particular, was pervasive and eroded public trust in institutions, while inadequate legal protections for property rights discouraged entrepreneurial activity. Labor market rigidities and underdeveloped financial systems further constrained economic dynamism and productivity growth. Despite these challenges, Vietnam’s economy continued to grow at a rapid pace. From 2000 to 2004, the country achieved an average annual GDP growth rate of 7.1%. In 2005, growth accelerated to 8.4%, making it the second highest in Asia after China. The government projected continued strong performance, estimating GDP growth of 8.17% for 2006 and setting a target of approximately 8.5% for 2007. These optimistic forecasts reflected confidence in the country’s reform agenda and its expanding integration into the global economy. A landmark event in Vietnam’s economic integration occurred on November 7, 2006, when the World Trade Organization (WTO) General Council approved Vietnam’s accession package. After 11 years of preparation and eight years of negotiation, Vietnam officially became the WTO’s 149th member on January 11, 2007. WTO membership was expected to further liberalize Vietnam’s economy by committing it to international trade rules and reducing barriers to market access. This accession promised to expand trade opportunities and attract additional foreign investment by providing greater certainty and transparency to international partners. While WTO accession was anticipated to boost Vietnam’s economy by encouraging continued reforms and facilitating deeper integration into global markets, it also posed significant challenges. The opening of the economy to increased foreign competition threatened to expose domestic industries to pressures they had not previously faced. This necessitated further improvements in productivity, innovation, and regulatory frameworks to ensure that Vietnamese firms could compete effectively on the international stage. Despite the rapid economic growth exceeding 7% annually during this period, Vietnam’s economy started from a very low base. This was largely due to the long-term impacts of the Vietnam War, which lasted from the 1950s through the 1970s, as well as subsequent U.S. and allied embargoes that isolated the country economically. Post-war austerity measures and the destruction wrought by decades of conflict left Vietnam with significant structural challenges, including underdeveloped infrastructure, limited industrial capacity, and widespread poverty. These historical legacies shaped the trajectory of Vietnam’s economic development well into the 21st century. By 2012, the Communist Party publicly acknowledged economic mismanagement following widespread bankruptcies of state-owned enterprises and rising inflation. The banking sector faced significant difficulties, with bad debts reaching 15% of total loans. GDP growth was forecasted at a modest 5.2%, partly due to the lingering effects of the global economic crisis that had dampened demand and investment worldwide. This period underscored the vulnerabilities in Vietnam’s economic model and the need for renewed reform efforts to address structural weaknesses. In response to these challenges, the government initiated a series of economic reforms aimed at revitalizing growth and stabilizing the financial system. Key measures included raising the foreign ownership cap from 49% in certain sectors and partially privatizing state-owned enterprises. By the end of 2013, plans were in place to privatize between 25% and 50% of SOEs, while retaining state control only over essential public services and the military. These reforms sought to improve efficiency, attract foreign investment, and reduce the fiscal burden of loss-making enterprises on the state budget. The reform initiatives stimulated a significant boom in the Vietnamese stock market, reflecting renewed investor confidence in the country’s economic prospects. Increased market activity and rising share prices indicated optimism about the potential for higher returns and improved corporate governance. This financial market dynamism was a positive signal for the broader economy, suggesting that reforms were beginning to bear fruit and that Vietnam was becoming a more attractive destination for both domestic and international investors. Vietnam’s economic difficulties during this period sparked debates about a potential new phase in its political economy. Analysts and policymakers discussed the implications of the reform process for the country’s development model and governance structures. Nevertheless, poverty remained a primary concern as of 2018. According to the Provincial Governance and Public Administration Performance Index (PAPI), 28% of respondents identified poverty as their main problem, highlighting the ongoing challenges in achieving inclusive growth and improving living standards across the population. Most survey respondents agreed that poverty reduction was essential for Vietnam to become an advanced, developed country. The proportion of the poorest respondents who feared economic deterioration rose from 13% in 2016 to 26% in 2017, indicating growing anxieties about economic security among vulnerable groups. This sentiment underscored the importance of social policies and economic strategies focused on reducing inequality and enhancing resilience to economic shocks. Health insurance coverage in Vietnam increased significantly during this period, rising from 74% in 2016 to 81% in 2017. The most notable gains were observed among rural populations, who historically had lower access to healthcare services. This expansion of health coverage represented an important step toward improving social welfare and reducing the financial burden of medical expenses for disadvantaged communities. Despite these advances, corruption remained a significant issue in Vietnam’s public sector. Transparency International ranked the country 113th out of 176 countries and regions in 2017 for perceived corruption. In response, the government launched a crackdown on corruption in 2016 and 2017, prosecuting numerous bankers, businesspeople, and government officials. These efforts aimed to strengthen governance, enhance the rule of law, and improve the business environment by reducing corrupt practices. Data from the PAPI indicated improvements in public service delivery and governance outcomes. For example, bribery in public district hospital services decreased from 17% in 2016 to 9% in 2017, while reports of land seizures declined from about 9% before 2013 to less than 7% in 2017. These trends suggested progress in reducing some forms of petty corruption and abuse of power, although challenges remained. However, perceptions of fairness in land transactions deteriorated, with the percentage of respondents who believed their land was sold at fair market value dropping from 26% in 2014 to 21% in 2017. Land-use graft and petty corruption, including police bribery, continued to be common problems, reflecting ongoing weaknesses in property rights enforcement and public sector accountability. Journalist Ralph Jennings noted that Vietnam had been actively privatizing many state-owned operations as a strategy to reduce corruption and improve efficiency. This process was part of broader economic reforms aimed at transforming the role of the state in the economy, encouraging private sector development, and fostering a more competitive market environment. By March 2018, Vietnam’s economy continued its robust growth trajectory, achieving its best annual growth rate in over a decade. This strong performance prompted media speculation about Vietnam’s potential emergence as one of the “Asian Tigers,” a term historically used to describe the rapid industrialization and economic development of certain East Asian economies. The country’s dynamic growth and increasing integration into global markets positioned it as a rising economic power in the region. Projections by DBS Bank in 2019 suggested that Vietnam’s economy could grow at an annual rate of 6.0% to 6.5% through 2029. This forecast was based on expectations of sustained strong foreign investment inflows and productivity growth. The bank further predicted that Vietnam had the potential to surpass Singapore’s economy within the next decade, a milestone reportedly achieved just one year later. This rapid economic ascent highlighted Vietnam’s successful development strategy and its increasing significance in the global economic landscape. In the early 2020s, Vietnam faced multiple external challenges, including trade wars with major partners, the COVID-19 pandemic, and global trends toward deglobalization. Despite these headwinds, the country remained Asia’s top-performing economy, demonstrating resilience and adaptability. Vietnam’s ability to maintain growth amid global uncertainty underscored the strength of its economic fundamentals and the effectiveness of its policy responses. Since 2000, Vietnam had shifted its economic structure toward manufacturing higher-value goods, supported by a more skilled workforce. This transition enabled the creation of better-paying jobs and enhanced productivity. By 2020, electronics accounted for 38% of the country’s exports, a substantial increase from 14% in 2010. This shift reflected successful industrial upgrading and the integration of Vietnam into complex global value chains, particularly in technology-intensive sectors. Vietnam achieved an average economic growth rate of 6.2% in recent years, making it the second fastest-growing economy in Asia after China. This sustained expansion was driven by a combination of domestic reforms, foreign investment, export growth, and improvements in human capital. The country’s economic performance positioned it as a key player in the region’s development trajectory. Foreign investment in luxury hotels and resorts was expected to increase to support Vietnam’s expanding tourism industry. The growth of tourism contributed to economic diversification and created employment opportunities in services and hospitality. Investment in high-end tourism infrastructure was seen as a strategy to attract affluent visitors and enhance the country’s global tourism competitiveness.

The economic indicators of Vietnam from 1990 to 2023 reveal a dynamic trajectory marked by significant transformations in growth, inflation, unemployment, and fiscal management. The International Monetary Fund (IMF) staff provided estimations for the years 2021 through 2027, with particular emphasis on inflation rates below 5%, which are distinctly highlighted in green to denote periods of relative price stability. This comprehensive dataset offers a detailed perspective on Vietnam’s evolving economic landscape over more than three decades. In 1990, Vietnam’s economy was characterized by modest real GDP growth of 5.0%, reflecting the early stages of its transition from a centrally planned system to a more market-oriented one. The nominal GDP at that time stood at US$8.2 billion, while the GDP measured in purchasing power parity (PPP) terms was significantly higher at US$77.7 billion, indicating the lower cost of living and price levels in Vietnam relative to the United States. The GDP per capita in nominal terms was a mere US$121.7, whereas the GDP per capita on a PPP basis was US$1,151.2, underscoring the low average income levels despite the country’s relatively larger domestic purchasing power. Inflation was notably high at 36.0%, a legacy of economic instability and price liberalization efforts. Unemployment was also elevated at 12.3%, reflecting structural adjustments and labor market rigidities during this transitional period. Data on government debt was not available for this year, which is indicative of the limited fiscal transparency and record-keeping practices at the time. The inflationary pressures intensified in 1991, with the inflation rate reaching a peak of 81.8%, the highest recorded in the dataset. Despite this severe inflation, the economy maintained a real GDP growth rate of 5.8%, and nominal GDP increased to US$9.7 billion. This period was marked by hyperinflationary tendencies, which posed significant challenges for economic planning and investment. The government’s efforts to stabilize the economy were complicated by the legacy of war, structural inefficiencies, and the initial phases of market reforms under the Đổi Mới policy initiated in the late 1980s. Throughout the 1990s, Vietnam experienced robust economic growth, driven by reforms that liberalized trade, encouraged foreign direct investment, and improved agricultural productivity. The peak of this growth was observed in 1995, when real GDP expanded by an impressive 9.5%. Nominal GDP at this time had risen to US$26.4 billion, more than tripling since 1990, signaling rapid economic expansion and increased integration into the global economy. Inflation, although still elevated, had declined to 16.9%, reflecting the government’s gradual success in controlling price instability. This decade also saw improvements in employment and government fiscal management, laying the groundwork for more sustainable growth. A significant milestone was reached in 1997 when inflation rates dropped below 5% for the first time, registering at 3.1%. This marked a turning point in Vietnam’s macroeconomic stability, coinciding with a strong real GDP growth rate of 8.2% and a nominal GDP of US$34.1 billion. The reduction in inflation to single-digit levels was critical in fostering investor confidence and enabling more predictable economic planning. However, this period also coincided with the Asian financial crisis, which affected many regional economies, though Vietnam was relatively insulated due to its limited integration with international financial markets at the time. From the year 2000 onwards, data on government debt as a percentage of GDP became available, providing greater insight into Vietnam’s fiscal health. In 2000, government debt was recorded at 24.8% of GDP, a manageable level that reflected cautious fiscal policies amid ongoing economic reforms. The real GDP growth rate for that year was 6.8%, with nominal GDP reaching US$39.6 billion. This period marked Vietnam’s continued transition towards a more open economy, with increasing exports and foreign investment playing pivotal roles. Vietnam’s nominal GDP demonstrated steady growth in the following years, reaching US$98.4 billion by 2007. During this year, the economy grew by 7.1%, inflation was contained at 8.3%, and unemployment had fallen to 4.6%, indicating significant improvements in labor market conditions. Government debt had increased moderately to 32.2% of GDP, reflecting increased public spending to support infrastructure and social programs. This period was characterized by rapid industrialization and urbanization, as well as growing integration into global supply chains, particularly in manufacturing and export-oriented sectors. However, inflation surged again in 2008, peaking at 23.1%, despite a slowdown in GDP growth to 5.7%. Nominal GDP had risen to US$124.8 billion, reflecting continued economic expansion. The spike in inflation was largely driven by global commodity price increases and domestic supply constraints. This inflationary episode posed challenges to monetary policy and threatened to erode real incomes, prompting the government to implement measures to stabilize prices. Following the 2008 global financial crisis, Vietnam’s GDP growth stabilized within a range of 5.4% to 7.8% through 2011. Inflation rates fluctuated between 3.3% and 18.7% during this period, reflecting ongoing volatility in global markets and domestic price pressures. The government adopted counter-cyclical fiscal and monetary policies to sustain growth and control inflation, while also focusing on structural reforms to enhance competitiveness and resilience. Government debt as a percentage of GDP exhibited a rising trend from 24.8% in 2000, reaching a peak of 47.5% in 2016. This increase was partly attributable to expanded public investment in infrastructure and social welfare programs aimed at supporting economic development and poverty reduction. After 2016, government debt began to decline gradually, with projections indicating a reduction to 33.5% by 2024. This downward trend reflects improved fiscal discipline and efforts to maintain debt sustainability amid ongoing economic growth. Vietnam’s GDP per capita in nominal terms increased markedly from US$121.7 in 1990 to an estimated US$4,622.5 in 2024. This substantial rise indicates significant improvements in living standards and income levels over the period. Similarly, GDP per capita measured in PPP terms rose from US$1,151.2 in 1990 to an estimated US$15,469.9 in 2024, underscoring the country’s enhanced purchasing power and economic development. These gains were driven by sustained economic growth, structural transformation, and increased integration into the global economy. Unemployment rates exhibited a notable decline from 12.3% in 1990 to approximately 2.0%–2.3% in recent years, reflecting the expansion of labor-intensive industries and improved labor market conditions. However, the COVID-19 pandemic caused a temporary reversal, with unemployment rising to 3.2% in 2021 due to disruptions in economic activity and labor markets. This increase highlighted the vulnerability of certain sectors, such as tourism and manufacturing, to external shocks. Real GDP growth slowed to 2.6% in 2021 amid the pandemic’s impact, marking a significant deceleration compared to previous years. Nevertheless, the economy rebounded strongly in 2022, achieving an 8.0% growth rate, driven by recovery in domestic demand, export growth, and government stimulus measures. Projections for 2024 estimate a real GDP growth rate of 6.2%, indicating continued resilience and robust economic performance. Nominal GDP reached US$433.7 billion in 2023, reflecting the substantial expansion of the economy over the decades. It is projected to increase further to US$465.8 billion in 2024, signaling ongoing growth and economic diversification. This growth is supported by Vietnam’s strategic positioning in global value chains, expanding manufacturing base, and increasing foreign direct investment. Inflation rates have generally stabilized below 5% since 2014, with only minor fluctuations, demonstrating effective monetary policy and price stability. The inflation rate is projected to be 3.7% in 2024, consistent with the government’s inflation targeting framework and macroeconomic stability objectives. Overall, the data encapsulates Vietnam’s transition from a period of high inflation and unemployment in the early 1990s to an era of sustained economic growth, controlled inflation, reduced unemployment, and manageable government debt levels in recent years. This transformation reflects the success of economic reforms, prudent fiscal and monetary policies, and Vietnam’s increasing integration into the global economy.

Vietnam holds a prominent position in global agricultural production and exportation, particularly in rice cultivation, where it ranks as the world’s third-largest rice exporter. The country’s diverse topography includes the famous rice terraces of Sa Pa, located in the northern mountainous region, which not only contribute to the agricultural output but also represent a significant cultural and ecological landscape. Despite its high ranking in rice exports, the quality of Vietnamese rice faces challenges due to the predominance of small-scale farmers who often lack access to advanced agricultural technologies and sophisticated farming practices. This limitation affects the consistency and market competitiveness of Vietnam’s rice on the international stage. Coffee production is another cornerstone of Vietnam’s agricultural economy, with the country standing as the world’s second-largest coffee producer and exporter, trailing only Brazil. The robusta variety dominates Vietnamese coffee cultivation, thriving in the Central Highlands and contributing substantially to the national economy. This sector has experienced rapid growth since the 1990s, driven by expanding plantations and improving processing techniques, which have enabled Vietnam to become a key player in the global coffee market. Vietnam also leads the world in cashew nut production and exportation, reflecting the crop’s importance within the country’s agricultural portfolio. The favorable climate and soil conditions in southern Vietnam have facilitated the expansion of cashew cultivation, making the nation the largest global exporter of this commodity. The cashew industry supports numerous rural communities and contributes significantly to foreign exchange earnings. Forestry has historically been a vital component of Vietnam’s economy, but the sector has faced considerable challenges due to deforestation and forest degradation. In 2003, Vietnam produced an estimated 30.7 million cubic meters of wood, with sawn wood production accounting for 2,950 cubic meters. However, the rapid depletion of forest resources prompted the government to implement stringent measures to protect remaining forests. In 1992, a ban was imposed on the export of logs and raw timber to curb overexploitation and illegal logging activities. This policy was further tightened in 1997 when the export ban was extended to include all timber products except for wooden artifacts, aiming to promote sustainable forest management and encourage domestic processing industries. To address the decline in forest cover, Vietnam launched an ambitious tree-planting program during the 1990s, focusing on reforestation and afforestation efforts to reclaim degraded lands and restore ecological balance. This initiative sought not only to replenish forest resources but also to enhance biodiversity, prevent soil erosion, and improve the livelihoods of rural populations dependent on forest products. The fishing industry in Vietnam benefits from the country’s extensive coastline, which stretches over 3,200 kilometers, as well as its numerous rivers and lakes. This geographical advantage has fostered a diverse and productive fisheries sector, which has experienced moderate growth overall. In 2003, the total fish catch reached approximately 2.6 million tons, reflecting the sector’s significant contribution to food security and export revenues. Seafood exports saw remarkable expansion between 1990 and 2002, increasing fourfold to exceed US$2 billion. This surge was largely driven by the development of shrimp farms in the southern regions and the expansion of catfish production, which became major export commodities. Vietnamese catfish, scientifically distinct from American species, have been marketed in the United States under the same name, leading to trade disputes. The U.S. government imposed anti-dumping tariffs on Vietnamese catfish imports and considered similar measures on shrimp, citing concerns over unfair trade practices. These trade tensions prompted Vietnam’s seafood industry to adjust its strategy, and by 2005, there was a noticeable shift in focus toward meeting growing domestic demand as a means to offset declining exports. Despite being a leading rice exporter, Vietnam’s rice export quality is hampered by the limited sophistication of its predominantly small-scale farmers. This fragmentation in production scale often results in inconsistent quality and challenges in meeting the stringent standards of international markets. Nonetheless, rice remains a staple of the Vietnamese diet and a critical export commodity. In 2018, Vietnam’s agricultural production demonstrated considerable diversity and scale. The country produced 44.0 million tons of rice, ranking fifth globally behind China, India, Indonesia, and Bangladesh. Sugarcane production reached 17.9 million tons, placing Vietnam 16th worldwide. Vegetable production was substantial, totaling 14.8 million tons, while cassava production stood at 9.8 million tons, making Vietnam the seventh-largest producer globally. Maize production was recorded at 4.8 million tons, supporting both domestic consumption and animal feed industries. Cashew nut production in 2018 was 2.6 million tons, reaffirming Vietnam’s status as the largest producer worldwide. Banana production reached 2.0 million tons, ranking 20th globally, while coffee production totaled 1.6 million tons, maintaining the country’s position as the world’s second-largest producer after Brazil. Coconut production was 1.5 million tons, ranking sixth globally, and sweet potato production was 1.3 million tons, placing Vietnam ninth worldwide. Watermelon production amounted to 1.2 million tons, contributing to the country’s diverse fruit output. Natural rubber production was significant at 1.1 million tons, ranking Vietnam third globally, behind Thailand and Indonesia. Orange production reached 852 thousand tons, ranking 18th worldwide, while mango production—including mangosteen and guava—totaled 779 thousand tons. Pineapple production was 654 thousand tons, placing Vietnam 12th globally, and tea production was 270 thousand tons, ranking sixth worldwide. In addition to these major crops, Vietnam produces smaller quantities of various other agricultural products, reflecting the country’s varied agro-ecological zones and farming practices. In terms of livestock, Vietnam was the world’s fifth-largest pork producer in 2018, with a production volume of 3.8 million tons. The country also produced 839 thousand tons of chicken meat and 334 thousand tons of beef in the same year. Dairy production included 936 million liters of cow’s milk, supporting domestic consumption and processing industries. Honey production was recorded at 20 thousand tons, highlighting the presence of apiculture as a supplementary agricultural activity. Collectively, these figures illustrate Vietnam’s significant role in global agriculture, fisheries, and forestry, underscoring the country’s diverse production base and its ongoing efforts to balance economic growth with sustainable resource management.

The Dau Tieng Solar Power Complex stands as a landmark achievement in Southeast Asia’s renewable energy landscape, recognized as the largest solar farm in the region. This expansive facility has played a pivotal role in bolstering Vietnam’s capacity for clean energy generation, contributing significantly to the diversification of the country’s energy portfolio away from traditional fossil fuels. Its development marked a substantial step forward in the regional push toward sustainable energy infrastructure, showcasing Vietnam’s commitment to harnessing solar power on a large scale and setting a benchmark for neighboring countries. Vietnam’s energy consumption has been historically dominated by petroleum, which serves as the primary source of energy for the country. Coal ranks as the secondary source, supplying approximately 25% of the nation’s energy needs when biomass is excluded from the calculation. This reliance on fossil fuels reflects the country’s abundant natural resources and industrial demands, with petroleum playing a central role in energy production, transportation, and industrial processes. Coal, while secondary, remains a critical component of Vietnam’s energy mix, particularly in power generation and industrial applications. The country’s petroleum reserves are estimated to range between 270 and 500 million tons, indicating a substantial yet finite resource base. These reserves have underpinned Vietnam’s oil production activities for several decades, providing a foundation for both domestic consumption and export. The variability in reserve estimates reflects the challenges in precisely quantifying underground resources, influenced by ongoing exploration and technological advancements in extraction methods. Vietnam experienced a rapid increase in oil production in the late 20th and early 21st centuries, reaching a peak output of 403,300 barrels per day (64,120 cubic meters per day) by 2004. This surge was driven by the development of offshore oil fields and enhanced extraction technologies. However, this peak is widely regarded as the zenith of Vietnam’s oil production capacity, with subsequent years expected to witness a gradual decline as reserves become depleted and extraction becomes more challenging. The plateau and decline in production have prompted the country to explore alternative energy sources and enhance energy efficiency. In 2003, the mining and quarrying sector contributed 9.4% to Vietnam’s Gross Domestic Product (GDP), reflecting its significant role in the national economy. Despite this substantial economic contribution, the sector employed only 0.7% of the national workforce, indicating a high level of mechanization and capital intensity relative to labor input. This disparity underscores the sector’s efficiency and the specialized nature of mining activities, which require technical expertise and substantial investment in equipment and infrastructure. Vietnam’s mineral exports are dominated by petroleum and coal, which constitute the bulk of the country’s mining output for international markets. Beyond these primary exports, Vietnam engages in the extraction and export of a diverse array of minerals including antimony, bauxite, chromium, gold, iron, natural phosphates, tin, and zinc. This mineral diversity reflects the country’s rich geological endowment and supports various industrial sectors domestically and abroad. The exploitation of these minerals has been integral to Vietnam’s industrial development and export diversification strategies. By 2019, Vietnam had established itself as a significant global producer of several key minerals. It ranked as the ninth largest producer of antimony worldwide, tenth in tin production, eleventh in bauxite, twelfth in titanium, thirteenth in manganese, and ninth in phosphate production. These rankings highlight Vietnam’s competitive position in the global mining industry and its role as a critical supplier of essential minerals used in manufacturing, agriculture, and technology sectors internationally. In addition to industrial minerals, Vietnam is renowned for its production of precious gemstones, including ruby, sapphire, topaz, and spinel. The country’s gemstone deposits contribute to its mineral diversity and have fostered a niche market for high-value, luxury mineral products. These gemstones are prized both domestically and internationally, adding a unique dimension to Vietnam’s mineral resource profile and supporting artisanal mining and gemstone processing industries. Crude oil historically served as Vietnam’s leading export commodity until the late 2000s, underpinning the country’s export revenues and trade balance. However, by 2014, the export landscape had shifted dramatically, with high-tech electrical manufactures emerging as the dominant export sector. During this period, crude oil’s share of total exports had declined to approximately 5%, a significant reduction from its 20% share in 1996. This transition reflects Vietnam’s economic transformation towards manufacturing and technology-driven exports, reducing dependence on resource-based exports. The peak of crude oil export earnings for Vietnam occurred in 2004, when crude oil accounted for 22% of the country’s total export revenues. This peak coincided with the maximum production levels achieved during that period and underscored the strategic importance of petroleum exports to Vietnam’s economy. Following this peak, the relative contribution of crude oil to export earnings diminished as production plateaued and other sectors expanded. Vietnam primarily exports petroleum in crude form due to its limited refining capacity. As of the early 2000s, the country operated only one refinery located at Cat Hai near Ho Chi Minh City, which had a modest processing capacity of merely 800 barrels per day (130 cubic meters per day). This limited refining infrastructure constrained Vietnam’s ability to process crude oil domestically into higher-value refined products, necessitating the export of crude oil and the import of refined petroleum products to meet domestic demand. Reflecting this dependence on imported refined fuels, refined petroleum products constituted 10.2% of Vietnam’s total imports in 2002. The substantial import volume of refined fuels highlighted the gap between domestic refining capacity and consumption needs, underscoring the strategic imperative for Vietnam to develop additional refining infrastructure to reduce reliance on imports and enhance energy security. By 2012, Vietnam had operationalized the Dung Quat refinery, marking a significant advancement in its refining capabilities. This facility represented the country’s first large-scale refinery, designed to process substantial volumes of crude oil domestically and reduce the need for refined product imports. Furthermore, plans were underway to construct a second refinery, the Nghi Son Refinery, with construction scheduled to commence in May 2013. This expansion aimed to further enhance Vietnam’s refining capacity and support its growing energy consumption and industrial demands. Vietnam’s anthracite coal reserves are estimated at approximately 3.7 billion tons, indicating a substantial and strategically important coal resource base. These reserves have supported the country’s coal mining industry and contributed to energy generation, particularly in thermal power plants. The availability of large anthracite reserves has positioned coal as a key energy source for Vietnam, despite global trends toward cleaner energy alternatives. Coal production in Vietnam experienced rapid growth between 1999 and 2003, increasing from 9.6 million tons to nearly 19 million tons. This doubling of output over a relatively short period reflected intensified mining activities, increased demand for coal in power generation, and the development of mining infrastructure. The expansion of coal production during this time underscored the sector’s role in meeting the country’s growing energy needs and supporting industrialization. Vietnam’s potential natural gas reserves are estimated at approximately 1.3 trillion cubic meters, representing a significant energy resource with considerable strategic value. In 2002, the country brought ashore 2.26 billion cubic meters of natural gas, indicating active exploitation of these reserves for domestic consumption and industrial use. Natural gas has been increasingly integrated into Vietnam’s energy mix, offering a cleaner alternative to coal and oil and supporting power generation and chemical industries. Hydroelectric power constitutes another important component of Vietnam’s energy mix, leveraging the country’s abundant river systems and topographical features. Hydropower plants have been developed across various regions, contributing renewable and relatively low-cost electricity to the national grid. This source of energy complements fossil fuels and has been integral to Vietnam’s efforts to diversify its energy portfolio and reduce environmental impacts. In 2004, Vietnam confirmed plans to develop nuclear power plants with international assistance, signaling its intention to further diversify energy sources and meet growing electricity demand. The first planned nuclear power plant was to be developed with Russian support, while a second facility was planned in collaboration with a Japanese consortium. These initiatives reflected Vietnam’s strategic vision to incorporate nuclear energy into its long-term energy planning, although the projects required significant international cooperation and adherence to safety standards. From 2019 onwards, Vietnam experienced an accelerated deployment of renewable energy, surpassing other Southeast Asian countries in the rate of new capacity additions. The majority of this new capacity came from solar and wind power plants, reflecting favorable policies, declining technology costs, and growing investor interest in clean energy. This rapid expansion marked a transformative period in Vietnam’s energy sector, aligning with global trends toward decarbonization and sustainable development. However, by 2023, the expansion of renewable energy in Vietnam slowed considerably. This deceleration was primarily due to limitations in the electrical grid’s capacity to absorb additional intermittent renewable generation and a reduction in government support policies that had previously incentivized rapid growth. These challenges highlighted the need for grid modernization and policy adjustments to sustain the momentum of renewable energy development. Vietnam’s total energy consumption, measured in terawatt-hours (TWh), has increased dramatically over the past five decades, reflecting the country’s rapid economic growth and industrialization. Consumption figures rose from 91 TWh in 1970 to 54 TWh in 1980, then to 77 TWh in 1990, demonstrating initial fluctuations during periods of economic transition. Subsequently, energy use surged to 214 TWh in 2000, 540 TWh in 2010, 1,204 TWh in 2020, and reached 1,359 TWh by 2023. This trajectory illustrates the expanding scale of Vietnam’s energy demands driven by population growth, urbanization, and industrial development. Per capita energy consumption in Vietnam also increased markedly during this period, indicating rising energy use per individual as living standards improved and economic activities intensified. Per capita consumption was recorded at 2,162 kilowatt-hours (kWh) in 1970, declined to 1,022 kWh in 1980, and then modestly increased to 1,153 kWh in 1990. The upward trend accelerated thereafter, reaching 2,711 kWh in 2000, 6,180 kWh in 2010, 12,462 kWh in 2020, and 13,744 kWh in 2023. This pattern reflects the country’s transition from a low-energy-consuming economy to one with significantly higher energy demands per person, driven by industrialization, urban lifestyles, and increased access to electricity.

VinFast, acknowledged as Vietnam’s first global automaker, operates its primary manufacturing facility in Hải Phòng, a major industrial city in northern Vietnam. Established as part of the Vingroup conglomerate, VinFast marked a significant milestone in Vietnam’s industrial development by entering the global automotive market with ambitions to produce electric vehicles and conventional cars for both domestic and international consumers. The establishment of the Hải Phòng plant underscored Vietnam’s growing industrial capabilities and its strategic efforts to diversify its manufacturing base beyond traditional sectors. In 2004, the industrial sector contributed a substantial 40.1% to Vietnam’s gross domestic product (GDP), reflecting the sector’s critical role in the national economy. Despite this significant contribution to GDP, the industrial sector employed only 12.9% of the total workforce, indicating a relatively high productivity per worker compared to other sectors such as agriculture or services. This disparity highlighted ongoing structural transformations within Vietnam’s economy, where industrial activities were becoming more capital-intensive and technologically advanced, requiring fewer but more skilled workers. By the year 2000, non-state activities had begun to play an increasingly important role in Vietnam’s industrial production, accounting for 22.4% of the total output. This growth in non-state industrial enterprises reflected the broader economic reforms initiated in the late 1980s under Đổi Mới, which encouraged private sector development alongside state-owned enterprises. The rising share of non-state industrial production demonstrated the diversification of ownership structures and the increasing dynamism of private industry in Vietnam’s evolving market economy. Between 1994 and 2004, Vietnam’s industrial sector experienced robust growth, with an average annual growth rate of 10.3%. This rapid expansion was driven by a combination of factors, including economic liberalization policies, increased foreign direct investment, and improvements in infrastructure and technology. The double-digit growth rate underscored the industrial sector’s pivotal role in Vietnam’s transition from a primarily agrarian economy to a more industrialized and export-oriented one. Manufacturing, as a subset of the industrial sector, contributed 20.3% of Vietnam’s GDP in 2004 and employed 10.2% of the workforce during the same year. This indicated that manufacturing was a major engine of economic growth and employment, albeit employing a smaller share of the labor force relative to its GDP contribution, suggesting increasing efficiency and capital intensity. The manufacturing sector’s prominence was further emphasized by its rapid expansion and diversification into various product categories. From 1994 to 2004, manufacturing GDP grew at an average annual rate of 11.2%, outpacing the overall industrial growth rate and reflecting the sector’s dynamic expansion. This growth was driven by both domestic demand and export-oriented production, as Vietnam increasingly integrated into global supply chains. The manufacturing sector’s rapid development was a key factor in Vietnam’s economic transformation, enabling the country to move up the value chain and attract significant foreign investment. The leading manufacturing sectors in Vietnam during this period included electronics, food processing, cigarettes and tobacco, textiles, chemicals, and footwear goods. Each of these sectors experienced rapid growth, fueled by both domestic market expansion and export opportunities. Electronics manufacturing, in particular, grew significantly due to the entry of multinational corporations and the development of supporting industries. Food processing and tobacco manufacturing benefited from Vietnam’s abundant agricultural resources, while textiles and footwear capitalized on the country’s labor cost advantages and participation in global trade agreements. The chemical industry expanded to supply inputs for other manufacturing sectors, contributing to the overall industrial ecosystem. Vietnam’s geographical proximity to China, combined with its comparatively lower labor costs, positioned the country as an emerging manufacturing hub in Asia. This strategic advantage attracted significant investments, particularly from Korean and Japanese firms seeking to diversify their production bases away from China. The relocation of manufacturing activities to Vietnam was part of a broader regional trend driven by rising labor costs in China and the desire to access new markets and supply chains. Vietnam’s integration into regional and global trade networks further enhanced its attractiveness as a manufacturing destination. Samsung, a leading global electronics company, produces approximately 40% of its phones in Vietnam, underscoring the country’s critical role in the global electronics manufacturing industry. This substantial production volume reflects Vietnam’s advanced manufacturing capabilities, skilled labor force, and favorable investment climate. Samsung’s operations in Vietnam have become a cornerstone of the country’s export economy and a major source of employment and technological transfer. As of 2019, Samsung employed over 200,000 workers in the Hanoi area to produce smartphones, demonstrating the scale and importance of its manufacturing presence in Vietnam. While Samsung also outsourced some manufacturing to China and produced large portions of its phones in India, the Vietnamese facilities remained central to its global production network. The company’s investment in Vietnam contributed significantly to the development of high-tech manufacturing clusters and supplier ecosystems in the region. LG Electronics also relocated its smartphone production from South Korea to Vietnam to maintain competitiveness, citing Vietnam’s “abundant labor force” as a key motivation for the move. This strategic shift reflected broader industry trends of relocating manufacturing to countries with lower labor costs and favorable business environments. LG’s decision highlighted Vietnam’s growing reputation as a preferred destination for electronics manufacturing and its ability to attract major multinational corporations seeking to optimize their production footprints. In the first seven months of 2024, Samsung accounted for 15% of Vietnam’s exports, marking a decrease from 22.7% in 2017 but remaining a significant contributor to the country’s export economy. This decline in export share may reflect diversification of Vietnam’s export base and the rise of other sectors, yet Samsung’s continued prominence underscores its enduring importance to Vietnam’s manufacturing and export landscape. The company’s presence has helped anchor Vietnam’s position in global electronics supply chains and contributed to the country’s economic growth. Over the past decade, Vietnam has developed a significant automotive industry, although specific details and citations are not provided. This emerging sector has benefited from government policies aimed at industrial modernization, foreign investment attraction, and the development of domestic supply chains. The automotive industry’s growth aligns with Vietnam’s broader industrialization goals and efforts to establish itself as a regional manufacturing hub capable of producing vehicles for both domestic consumption and export markets. The rise of companies like VinFast exemplifies the country’s ambitions to compete on a global scale in the automotive sector.

In 2004, the service sector played a significant role in Vietnam’s economy, accounting for 38.2% of the country’s gross domestic product (GDP). This marked a substantial portion of the national economic output, reflecting the increasing importance of services relative to other sectors such as agriculture and industry. The growth of the service sector was driven by various sub-industries, including retail, finance, telecommunications, transportation, and tourism, all of which contributed to the diversification and modernization of the Vietnamese economy. The expansion of urban centers and rising income levels further stimulated demand for services, fostering a dynamic environment for the sector’s development. Between 1994 and 2004, the GDP generated by the service sector in Vietnam experienced an average annual growth rate of 6.0%, indicating robust and sustained expansion over the decade. This growth rate outpaced many other sectors of the economy, underscoring the service sector’s increasing contribution to overall economic progress. The period was characterized by significant reforms and liberalization policies that opened up the economy, encouraging private sector participation and foreign investment in service industries. Additionally, improvements in infrastructure, such as transportation networks and communication systems, facilitated the sector’s growth by enhancing connectivity and efficiency. Tourism emerged as a particularly important component within the service sector during this time, benefiting from Vietnam’s rich cultural heritage, natural landscapes, and government initiatives aimed at promoting the country as an international travel destination. The increase in foreign visitor arrivals and domestic tourism contributed not only to GDP growth but also to employment generation and regional development. The expansion of hotels, restaurants, travel agencies, and related services created new economic opportunities and helped integrate Vietnam more closely into the global economy. Overall, the steady growth of the service sector between 1994 and 2004 reflected Vietnam’s transition toward a more service-oriented economy, aligning with broader trends observed in developing countries undergoing economic transformation. The sector’s rising share of GDP and consistent growth rate highlighted its critical role in supporting sustainable economic development and improving living standards across the country.

In 2012, Vietnam welcomed approximately 6.8 million international visitors, a figure that underscored the country’s emerging status as a notable destination within Southeast Asia. This influx of tourists reflected the growing global interest in Vietnam’s rich cultural heritage, natural landscapes, and historical sites. The tourism sector was poised for further expansion, with projections indicating that the number of international arrivals would surpass 7 million in 2013. This anticipated growth was driven by increased international connectivity, improvements in infrastructure, and enhanced promotional efforts by the Vietnamese government aimed at showcasing the country’s diverse attractions to a broader audience. The rising popularity of Vietnam as a travel destination was further evidenced by its recognition in TripAdvisor’s 2013 Travelers’ Choice awards. Four Vietnamese cities—Hanoi, Ho Chi Minh City, Hoi An, and Ha Long—were included among the top 25 destinations in Asia, highlighting their appeal to international tourists. Hanoi, the capital city, was celebrated for its blend of French colonial architecture and vibrant street life, while Ho Chi Minh City attracted visitors with its dynamic urban atmosphere and historical landmarks. Hoi An, renowned for its well-preserved ancient town and lantern-lit streets, and Ha Long Bay, famous for its stunning limestone karsts and emerald waters, also contributed significantly to Vietnam’s tourism profile. This recognition by a prominent travel platform underscored the diverse experiences available within the country and helped to elevate Vietnam’s status on the international tourism map. The year 2016 marked a significant milestone for Vietnam’s tourism industry, as the country surpassed the 10 million mark in international visitor arrivals for the first time. This achievement was indicative of a sustained upward trajectory in tourism, fueled by a combination of factors including visa policy reforms, expanded air connectivity, and the growing global interest in Southeast Asia as a travel region. The government’s strategic initiatives to diversify tourism offerings, from cultural and historical tours to eco-tourism and beach resorts, contributed to attracting a wider range of visitors. This milestone also reflected the increasing economic importance of tourism as a driver of growth, employment, and foreign exchange earnings for Vietnam. By 2019, Vietnam had solidified its position as a premier destination within the Asia-Pacific region, attracting a record 18 million international visitors. According to the World Tourism rankings published by the United Nations World Tourism Organization (UNWTO), Vietnam ranked as the fifth most visited country in the region, a testament to its rapid development as a global tourism hub. This impressive growth was supported by continued investments in infrastructure, including the expansion of airports, enhancement of hospitality services, and improvement of transportation networks. Additionally, Vietnam’s diverse attractions—from the bustling urban centers of Hanoi and Ho Chi Minh City to the UNESCO World Heritage sites like Hoi An Ancient Town and Ha Long Bay—continued to captivate tourists from around the world. The country’s tourism sector became a vital contributor to the national economy, generating significant revenue and employment opportunities. The onset of the COVID-19 pandemic in early 2020 dealt a severe blow to Vietnam’s tourism industry, mirroring the global disruption experienced by the sector. In response to the escalating health crisis, the Vietnamese government implemented stringent measures, including the suspension of all tourist visa issuances starting from March 2020. This decisive action aimed to curb the spread of the virus by limiting international arrivals, but it also brought international tourism to an abrupt halt. The suspension of visas, combined with widespread travel restrictions and border closures worldwide, resulted in a dramatic decline in visitor numbers and revenue for the tourism sector. The impact of the pandemic on foreign visitor arrivals was starkly illustrated in April 2020, when Vietnam recorded a 98% year-on-year decline in international tourist numbers. This precipitous drop reflected the near-total cessation of inbound travel due to the pandemic-related restrictions and global lockdowns. The tourism industry, which had been a rapidly growing component of the Vietnamese economy, faced unprecedented challenges as hotels, resorts, and travel agencies experienced massive cancellations and a lack of new bookings. The loss of international tourists also had cascading effects on related sectors, including transportation, retail, and food services, exacerbating the economic strain caused by the pandemic. Economic repercussions extended beyond visitor numbers, as total tourism revenues in Vietnam plummeted by over 60% year-on-year by July 2020. This significant decline underscored the profound financial impact of the pandemic on the tourism industry, which had previously been a major source of foreign exchange earnings and employment. The sharp reduction in revenue affected businesses across the tourism value chain, from large hotel chains and airlines to small local enterprises reliant on tourist spending. The government responded with various support measures aimed at mitigating the economic fallout, including financial assistance programs and initiatives to stimulate domestic tourism once conditions allowed. Vietnam began to signal a gradual recovery of its tourism sector with the reopening of its borders to international arrivals in March 2022. This move marked a pivotal step toward revitalizing the industry, as it allowed for the resumption of international travel and the return of foreign tourists. The reopening was accompanied by health and safety protocols designed to balance the need for economic recovery with public health considerations. Airlines resumed international flights, and tourism businesses began to welcome visitors once again, indicating a cautious but optimistic outlook for the sector’s revival. The recovery momentum continued into 2024, with Vietnam recording 6,943,961 tourist arrivals in the first six months of the year. This figure represented a substantial 65.7% increase compared to the same period in 2023, demonstrating strong growth in tourism recovery. The surge in arrivals was driven by pent-up demand for international travel, improved global mobility, and ongoing promotional efforts by the Vietnamese government and tourism industry stakeholders. The rebound also reflected the resilience of Vietnam’s tourism sector and its ability to adapt to changing circumstances. Domestic tourism, combined with the return of international visitors, played a crucial role in supporting the industry’s revival, contributing to economic recovery and job creation across the country.

The export of labour, which involves the deployment of Vietnamese workers to foreign countries for employment, has long been a vital element of Vietnam’s economic framework. This practice not only provides employment opportunities for Vietnamese citizens but also generates substantial remittance inflows that contribute significantly to the national economy. These remittances, sent by overseas workers to their families in Vietnam, serve as an important source of foreign currency and help improve living standards, reduce poverty, and stimulate local economic development. The government has actively supported and regulated labour export activities to maximize these economic benefits while ensuring the protection of workers’ rights abroad. The onset of the COVID-19 pandemic in early 2020 severely disrupted the export of labour from Vietnam. Global travel restrictions, border closures, and lockdown measures imposed by host countries led to a sharp decline in the deployment of Vietnamese workers overseas. Many Vietnamese labourers already abroad faced job losses or reduced working hours, while those seeking overseas employment encountered difficulties in securing contracts or obtaining necessary documentation. This disruption not only affected the livelihoods of the workers themselves but also diminished the volume of remittances flowing into Vietnam, thereby impacting the broader economy. The pandemic underscored the vulnerability of labour export to global health crises and highlighted the need for adaptive policies to sustain this sector during emergencies. In response to the challenges posed by the pandemic, Vietnam set a target in 2022 to send approximately 90,000 workers overseas, signaling a concerted effort to revive and expand the labour export sector. This target reflected a strategic push to restore the flow of Vietnamese labourers to foreign markets as international travel and economic activities gradually resumed. The government implemented various measures to facilitate this recovery, including enhancing training programs to improve worker skills, negotiating bilateral agreements with destination countries to secure employment opportunities, and strengthening health and safety protocols to protect workers amid ongoing pandemic concerns. The 2022 target also indicated an ambition not merely to return to pre-pandemic levels but to increase the scale and quality of labour export activities, thereby reinforcing its role as a pillar of Vietnam’s economic development. Historically, the primary destination countries for Vietnamese labour export have been South Korea, Japan, Malaysia, and the Republic of China (Taiwan). These countries have attracted Vietnamese workers due to their demand for foreign labour in sectors such as manufacturing, construction, agriculture, and domestic services. South Korea, in particular, has been a major market, facilitated by bilateral agreements that regulate the recruitment and employment of Vietnamese workers under programs such as the Employment Permit System (EPS). Japan’s aging population and labor shortages have also made it an important destination, with Vietnamese workers filling roles in caregiving, technical internships, and other industries. Malaysia and Taiwan have similarly provided significant employment opportunities, often in manufacturing and service sectors. The concentration of Vietnamese labour export in these countries has been shaped by geographic proximity, economic complementarities, and established recruitment channels. In recent years, Vietnam has pursued a strategy to diversify its labour export markets by targeting new destination countries such as Germany, Russia, and Israel. This strategic expansion aims to reduce dependency on traditional markets and tap into emerging opportunities in countries with different economic structures and labour demands. Germany, with its strong industrial base and acute labour shortages in sectors like healthcare and engineering, offers potential for skilled Vietnamese workers. Russia presents opportunities in construction, agriculture, and technical fields, while Israel’s demand for workers in agriculture, caregiving, and technology sectors aligns with Vietnam’s labour supply capabilities. By broadening its labour export destinations, Vietnam seeks to enhance the resilience of this economic sector, improve the quality of employment for its workers, and increase remittance inflows from a wider array of global markets. This diversification also reflects Vietnam’s broader economic integration efforts and its adaptation to changing global labour trends.

The State Bank of Vietnam, headquartered in Ho Chi Minh City, formerly known as Saigon, functions as the central bank of the country and holds the primary responsibility for formulating and implementing monetary policy. Established to maintain monetary stability, the State Bank oversees the regulation and supervision of the entire banking system, ensuring that financial institutions operate within the framework of national economic objectives. It manages currency issuance, controls inflation, and regulates interest rates to foster economic growth and stability. Additionally, the bank plays a critical role in maintaining the stability of the Vietnamese dong and managing foreign exchange reserves, thereby influencing the overall financial environment of Vietnam. Ho Chi Minh City serves as a pivotal financial hub, hosting the Ho Chi Minh City Stock Exchange (HOSE), which stands as one of the major financial institutions in Vietnam. The exchange facilitates the trading of stocks, bonds, and other securities, providing a platform for companies to raise capital and for investors to buy and sell equity stakes. Since its establishment, HOSE has contributed significantly to the development of Vietnam’s capital markets by enhancing liquidity, transparency, and investor confidence. The exchange operates under the supervision of the State Securities Commission and adheres to regulations designed to ensure fair trading practices and protect investor interests. Its presence in Ho Chi Minh City underscores the city’s role as the economic and financial center of the country. The banking and finance sector in Vietnam is fundamentally anchored by these two key institutions: the State Bank of Vietnam as the regulatory authority and the Ho Chi Minh City Stock Exchange as the primary marketplace for equity trading. The State Bank’s regulatory oversight ensures that commercial banks, credit institutions, and other financial entities operate soundly and contribute to the stability of the financial system. Meanwhile, the Ho Chi Minh City Stock Exchange provides the essential infrastructure for capital formation and investment, enabling the mobilization of domestic and foreign funds to support economic development. Together, these institutions form the backbone of Vietnam’s financial system, facilitating the efficient allocation of resources, promoting economic growth, and integrating Vietnam into the global financial markets. Their coordinated functions reflect the country’s ongoing efforts to modernize its financial sector and enhance its competitiveness in the regional and international economy.

The Vietnamese banking sector has historically been dominated by state-owned banks, which continue to play a central role in the country’s financial system. Among these, VietinBank, BIDV (Bank for Investment and Development of Vietnam), and Vietcombank stand out as the most important institutions, commanding significant market share and influence within the industry. These banks have been instrumental in channeling credit to key sectors of the economy, supporting government-led development initiatives, and maintaining financial stability. Their dominance reflects the Vietnamese government’s strategic approach to maintaining control over critical financial infrastructure while gradually opening the sector to market forces. In recent years, there has been a notable trend of foreign investment in Vietnam’s banking sector, particularly targeting the more profitable and well-established banks. This influx of foreign capital has played a crucial role in modernizing the banking system, introducing international best practices, and enhancing competitiveness. A prominent example of this trend is the Bank of Tokyo Mitsubishi UFJ, which owns a 19.73% stake in VietinBank. This significant minority ownership not only provides VietinBank with access to international expertise and capital but also symbolizes the increasing integration of Vietnam’s banking sector into the global financial system. The partnership has facilitated technology transfer, improved risk management, and expanded VietinBank’s capacity to serve both domestic and international clients. Similarly, Mizuho Bank, another major Japanese financial institution, holds a 15% ownership stake in Vietcombank. This investment underscores the growing confidence of foreign investors in Vietnam’s banking sector and highlights the strategic importance of Vietcombank as a gateway for foreign capital into the Vietnamese economy. The involvement of Mizuho has helped Vietcombank enhance its product offerings, adopt advanced banking technologies, and strengthen its corporate governance frameworks. These foreign partnerships have also contributed to raising the overall standards of transparency and operational efficiency within the Vietnamese banking industry, aligning it more closely with international norms. As of December 31, 2020, the ranking of the top five Vietnamese banks by authorised capital reflected the relative scale and financial strength of these institutions. Authorised capital, which represents the maximum amount of share capital that a company is authorized to issue to shareholders, serves as an important indicator of a bank’s capacity to absorb losses and support business growth. The figures for authorised capital were calculated using the average exchange rate for the year 2020, where 1 US dollar equaled 23,286 Vietnamese dong (VND), according to data from tradingeconomics.com. This exchange rate provided a standardized basis for comparing the capital sizes of Vietnamese banks in US dollar terms, facilitating clearer international understanding of their financial standing. The top five Vietnamese banks by authorised capital as of the end of 2020 were led by VietinBank, BIDV, and Vietcombank, consistent with their dominant positions in the market. These banks maintained authorised capital levels that underscored their ability to support large-scale lending operations and absorb financial shocks. The inclusion of foreign investors in these banks has further bolstered their capital bases, enabling them to expand their services and improve resilience amid evolving economic conditions. The authorised capital figures also reflected the Vietnamese government’s ongoing efforts to strengthen the banking sector through capital injections, regulatory reforms, and strategic partnerships with foreign financial institutions. Overall, the Vietnamese banking sector presents a unique blend of strong state ownership combined with increasing foreign participation, particularly in the largest and most profitable banks. This dynamic has contributed to a gradual modernization of the sector, improved access to capital, and enhanced integration with global financial markets. The authorised capital rankings as of December 2020 provide a snapshot of the relative financial strength of the leading banks, highlighting the continued importance of VietinBank, BIDV, and Vietcombank as pillars of Vietnam’s banking industry. The strategic investments by foreign banks such as Bank of Tokyo Mitsubishi UFJ and Mizuho exemplify the growing international confidence in Vietnam’s economic prospects and the banking sector’s potential for further development.

Vietnam’s financial market infrastructure is anchored by two principal stock trading centers: the Ho Chi Minh City Securities Trading Center and the Hanoi Securities Trading Center. Each of these centers plays a pivotal role in the country’s capital markets by managing distinct stock exchanges that facilitate the trading of securities within their respective regions. The Ho Chi Minh City Securities Trading Center is responsible for overseeing the Ho Chi Minh Stock Exchange (HOSE), which is the largest and most active stock exchange in Vietnam. HOSE primarily lists the shares of major corporations and serves as the central hub for equity trading in the southern part of the country, reflecting the economic dynamism of Ho Chi Minh City as Vietnam’s commercial capital. Conversely, the Hanoi Securities Trading Center administers the Hanoi Stock Exchange (HNX), which caters predominantly to companies based in northern Vietnam. The HNX provides a platform for trading equities, bonds, and other securities, complementing the activities of HOSE by offering additional opportunities for investors and issuers in the northern economic regions. Beyond the two main exchanges, the Hanoi Securities Trading Center also manages a third market known as the Unlisted Public Companies Market (UPCOM). UPCOM functions as a specialized trading venue for public companies that are not yet listed on either HOSE or HNX, offering these firms a means to access capital markets and increase their visibility to investors without meeting the more stringent listing requirements of the primary exchanges. Together, these two trading centers and the three markets they operate—HOSE, HNX, and UPCOM—are collectively governed under the umbrella of the Vietnam Stock Exchange (VSE). The VSE serves as the overarching regulatory and operational framework that integrates the various components of Vietnam’s stock market system, ensuring consistency in market practices, transparency, and investor protection across all trading platforms. The establishment of the VSE as a unified entity was formalized through legislative action, specifically under the Law on Securities enacted in 2019. This law provided a comprehensive legal foundation for the organization, management, and supervision of securities activities in Vietnam, reflecting the government’s commitment to developing a robust and modern capital market infrastructure. The Vietnam Stock Exchange operates under the direct supervision of the State Securities Commission (SSC), a governmental body that functions as a branch of the Ministry of Finance. The SSC is tasked with enforcing securities laws, regulating market participants, and overseeing the orderly operation of the stock exchanges. Its role includes licensing securities firms, monitoring market activities to prevent fraud and manipulation, and promoting the development of the securities market in line with national economic policies. By operating within the Ministry of Finance’s organizational structure, the SSC ensures that Vietnam’s securities markets align with broader fiscal and economic strategies, facilitating the mobilization of capital for sustainable economic growth. This regulatory framework has been instrumental in fostering investor confidence and supporting the ongoing expansion of Vietnam’s financial markets.

The official currency of Vietnam is the đồng, which is abbreviated as VND and commonly represented by the symbol đ. The đồng has served as the national currency for several decades and plays a central role in the country’s monetary system and economic transactions. It is issued and regulated by the State Bank of Vietnam, the country’s central bank, which is responsible for maintaining monetary stability and managing inflation. The đồng’s value has experienced fluctuations over time due to various economic factors, including inflationary pressures, exchange rate policies, and external economic conditions affecting Vietnam’s trade and investment environment. In the year 2022, countries and territories around the world were ranked according to their Gross Domestic Product (GDP) per capita using nominal values. This ranking provided a comparative measure of economic output per individual without adjusting for differences in purchasing power or cost of living between nations. Nominal GDP per capita is calculated by dividing the total market value of all final goods and services produced within a country’s borders by its population, expressed in current U.S. dollars. This metric offers insight into the average economic productivity and income level of a country’s residents but does not account for variations in price levels, which can distort comparisons between economies with differing costs of living. To address these limitations, the same year also saw countries and territories ranked by GDP per capita based on Purchasing Power Parity (PPP). The PPP method adjusts for relative cost of living and inflation rates, providing a more accurate and meaningful comparison of economic well-being across nations. By equalizing the purchasing power of different currencies, PPP-based GDP per capita reflects the actual quantity of goods and services that an average resident can buy within their own country. This adjustment is particularly important for countries like Vietnam, where the cost of living may be significantly lower than in high-income countries, thus allowing for a more realistic assessment of the standard of living and economic welfare. Consequently, PPP rankings often present a different perspective on economic status than nominal GDP figures, highlighting disparities that nominal values alone might obscure.

The exchange rate between the U.S. dollar and the Vietnamese đồng holds considerable importance in Vietnam’s monetary system primarily because the đồng is not freely convertible on international foreign exchange markets. Unlike fully convertible currencies, the đồng’s restricted convertibility means that its value cannot be determined solely by market forces outside Vietnam. Instead, the State Bank of Vietnam (SBV), the country’s central bank, plays a pivotal role in managing the đồng’s exchange rate to maintain economic stability and support trade and investment flows. This managed exchange rate regime reflects Vietnam’s cautious approach to monetary policy, balancing the need for external competitiveness with the imperative to control inflation and capital flight. Vietnam employs a “crawling peg” system to loosely anchor the đồng to the U.S. dollar, which is the dominant foreign currency in the Vietnamese economy. This mechanism allows for gradual, controlled adjustments in the exchange rate rather than abrupt changes, enabling the currency to respond flexibly to evolving market conditions while avoiding excessive volatility. The crawling peg system operates by setting a fixed reference rate for the đồng against the dollar, which is periodically adjusted to reflect inflation differentials, trade balances, and other macroeconomic indicators. This approach helps maintain export competitiveness and supports the country’s integration into the global economy, where the U.S. dollar remains the principal medium of exchange and store of value. Under this system, the exchange rate was initially permitted to fluctuate within a narrow band of 3 percent above or below a fixed rate established daily by the SBV. This band provided a controlled environment for market participants, allowing some room for market-driven price discovery while preventing destabilizing speculative attacks or excessive currency depreciation. The daily fixed rate served as a benchmark around which the đồng’s value could oscillate, with the SBV intervening as necessary to keep the exchange rate within the prescribed limits. This arrangement aimed to strike a balance between maintaining monetary discipline and allowing the currency to adjust gradually to external shocks or shifts in economic fundamentals. In October 2022, the SBV widened the permissible fluctuation band from 3 percent to 5 percent on either side of the fixed daily rate. This policy adjustment reflected the central bank’s recognition of increased volatility in global financial markets and the need for greater flexibility in the exchange rate regime. By expanding the band, the SBV provided the đồng with a broader margin for market-driven movements, which could help absorb external shocks more effectively without resorting to frequent and potentially costly interventions. The decision to widen the band also signaled a cautious step toward a more market-oriented exchange rate system, aligning with Vietnam’s broader economic reforms and gradual liberalization of its financial markets. As of December 27, 2024, the official exchange rate was set at 1 U.S. dollar equaling 25,448 Vietnamese đồng. This rate reflects the SBV’s ongoing efforts to manage the currency’s value in line with macroeconomic objectives, including controlling inflation, supporting export competitiveness, and maintaining foreign exchange reserves. The official rate serves as a reference for commercial banks, businesses, and government entities engaged in foreign trade and investment. Despite the managed nature of the exchange rate, the đồng’s value against the dollar remains a critical indicator of Vietnam’s economic health and external sector performance, influencing decisions by exporters, importers, and foreign investors. While the Vietnamese đồng and the U.S. dollar dominate the country’s currency system, gold continues to hold a residual role as a form of physical currency and store of value, albeit with diminished economic significance in recent years. Historically, gold has been used in Vietnam both as a medium of exchange and as a hedge against inflation and currency devaluation, particularly during periods of economic uncertainty. Although the government has implemented policies to regulate gold trading and discourage its use as a parallel currency, gold remains culturally and economically important for many Vietnamese households. It is often regarded as a safe asset for savings and wealth preservation, especially in rural areas where access to formal banking services may be limited. Nevertheless, the prominence of gold as a currency has waned as the Vietnamese financial system has modernized and the đồng’s stability has improved under the managed exchange rate regime.

During the 1980s, Vietnam grappled with high inflation largely driven by excessive demand pressures associated with the country’s efforts to develop its industrial sector alongside the persistent need for food and other essential commodities. The rapid push for industrialization and economic growth created significant imbalances between supply and demand, as production capacities were insufficient to meet the burgeoning needs of both the industrial and consumer markets. This demand-side pressure, compounded by structural inefficiencies within the centrally planned economy, resulted in escalating price levels that reflected the scarcity of goods and services. The inflationary environment was further exacerbated by the coexistence of multiple pricing systems, which complicated market transactions and distorted economic signals. In an attempt to alleviate supply shortages and stabilize the economy, the Vietnamese government sought to integrate the parallel market with the official planned market. The parallel market, often characterized by unofficial and market-driven prices, operated alongside the state-controlled planned economy, which set prices administratively. By co-integrating these two markets, the government aimed to harmonize price signals and encourage increased production and distribution of goods. This policy was intended to stimulate supply by reducing the distortions caused by dual pricing mechanisms and to bring more economic activities under formal regulation. However, the integration process was complex and met with challenges, as it required reconciling fundamentally different market dynamics and overcoming entrenched bureaucratic resistance. Initial economic reforms introduced during the 1980s led to an increase in total output, signaling some success in addressing the supply constraints that had fueled inflation. These reforms included measures to decentralize decision-making, incentivize production, and allow greater flexibility in pricing. Despite these positive developments, the reforms were only partially implemented, resulting in an incomplete transition toward a more market-oriented economy. This partial implementation contributed to continued inflationary pressures, as structural rigidities and demand-supply mismatches persisted. Consequently, the Consumer Price Index (CPI) inflation rate surged dramatically, reaching an alarming 200% in 1982. This spike underscored the severity of the inflation problem and highlighted the limitations of the reform efforts at that time. To counteract the inflation surge and address the underlying monetary imbalances, the Vietnamese government introduced a policy of forced savings. This policy mandated that a portion of consumers’ income be withheld or accumulated in designated accounts, effectively reducing the amount of money available for immediate spending. By accumulating unspent money, the government aimed to reduce the monetary overhang—the excess liquidity in the economy that was fueling demand and pushing prices upward. Forced savings were intended to curb inflation by dampening consumer demand without resorting to more direct price controls or restrictive fiscal measures. While this policy helped to moderate inflationary pressures temporarily, it also constrained consumer purchasing power and had mixed effects on economic growth and public sentiment. Vietnam experienced a period of hyperinflation particularly between 1987 and 1992, coinciding with the early years of its extensive economic reform program known as Đổi Mới, which was launched in 1986. This reform program sought to transition Vietnam from a centrally planned economy to a socialist-oriented market economy by introducing market mechanisms, encouraging private enterprise, and opening up to foreign investment. However, the initial phase of these reforms was marked by significant macroeconomic instability, including rampant inflation. Hyperinflation during this period eroded real incomes, distorted economic decision-making, and created uncertainty for both producers and consumers. The government faced the dual challenge of maintaining social stability while implementing structural reforms necessary for long-term economic development. By the first half of 2008, inflation in Vietnam was recorded at 20.3%, a figure that reflected ongoing inflationary pressures but also demonstrated improvement compared to the hyperinflationary levels of the late 1980s. This rate was significantly higher than the relatively low inflation rate of 3.4% recorded in 2000, indicating that inflation had fluctuated considerably over the intervening years. Nonetheless, the 2008 inflation rate was markedly lower than the extreme 160% inflation rate experienced in 1988, showing that macroeconomic stabilization efforts had achieved some success. The inflationary environment in 2008 was influenced by a combination of domestic factors, including rising food and fuel prices, as well as global economic conditions that affected commodity prices and capital flows. Inflation rates in the subsequent years continued to exhibit volatility. In 2010, inflation was recorded at 11.5%, reflecting ongoing pressures from demand growth and supply constraints. The inflation rate increased further to 18.58% in 2011, driven by factors such as rising global commodity prices, increased government spending, and credit expansion. This surge in inflation posed challenges for policymakers, who sought to balance the objectives of sustaining economic growth while maintaining price stability. The elevated inflation rates during this period also affected household purchasing power and contributed to concerns about macroeconomic imbalances. At the end of 2012, inflation decreased substantially to 7.5%, marking a significant reduction from the previous year’s elevated levels. This decline was attributed to tighter monetary policies, improved supply conditions, and efforts by the government to contain inflationary expectations. The reduction in inflation helped to restore some confidence in the economy and provided a more stable environment for investment and consumption. The government’s focus on macroeconomic stability during this period was reflected in its monetary and fiscal policy adjustments aimed at controlling inflation without stifling growth. Inflation continued its downward trajectory in the following years, falling to 6% in 2013 and further declining to 4.09% in 2014. These lower inflation rates indicated a period of relative price stability, which was conducive to sustainable economic growth and improved living standards. The government’s continued emphasis on prudent macroeconomic management, including monetary tightening and fiscal discipline, played a key role in achieving these outcomes. The reduction in inflation also helped to anchor inflation expectations and contributed to a more favorable investment climate. By 2016, inflation had been reduced to a low level of only 2%, representing a significant achievement in Vietnam’s efforts to maintain price stability. This low inflation rate was consistent with the government’s broader economic objectives of fostering a stable macroeconomic environment to support long-term growth and development. The success in controlling inflation reflected the cumulative effects of structural reforms, improved monetary policy frameworks, and enhanced institutional capacity. Low and stable inflation contributed to increased confidence among domestic and international investors, facilitating Vietnam’s integration into the global economy and supporting its ongoing development trajectory.

Between 1991 and February 2018, Vietnamese companies engaged in approximately 4,000 mergers and acquisitions (M&A) transactions, acting either as acquirors or targets. These transactions collectively amounted to a cumulative value of 40.6 billion USD, reflecting the dynamic and evolving nature of Vietnam’s corporate landscape over nearly three decades. This extensive volume of deals underscores the increasing integration of Vietnamese enterprises into the global economy, as well as the growing sophistication of domestic firms in pursuing strategic growth through consolidation and acquisition. The period witnessed a gradual maturation of the M&A market, supported by economic reforms and the liberalization of various sectors, which facilitated both domestic and foreign investment activities. Foreign companies demonstrated a particularly strong interest in the Vietnamese market, as evidenced by 1,120 inbound deals during the same timeframe. These inbound transactions were collectively valued at nearly 15 billion USD, highlighting the attractiveness of Vietnam as a destination for foreign direct investment through mergers and acquisitions. The substantial volume and value of inbound deals indicate a pronounced trend of international firms seeking market entry or expansion within Vietnam by acquiring existing local businesses or assets. This trend was driven by Vietnam’s rapid economic growth, favorable demographic profile, and strategic location within Southeast Asia, which together created compelling opportunities for foreign investors aiming to capitalize on emerging market potential. Despite the robust activity, the mergers and acquisitions sector in Vietnam encountered multiple challenges that adversely affected the success rates of transactions. A primary obstacle was the presence of cultural differences between domestic and foreign parties, which often complicated negotiations, integration processes, and management practices post-merger. Additionally, a lack of transparency in corporate governance and financial reporting posed significant risks and uncertainties for both buyers and sellers, undermining confidence and complicating due diligence efforts. The complexity of Vietnam’s legal and regulatory frameworks further compounded these difficulties, as evolving laws, bureaucratic procedures, and inconsistent enforcement created an unpredictable environment for M&A activities. These factors collectively contributed to a higher incidence of deal failures or suboptimal outcomes, underscoring the need for enhanced regulatory clarity and improved corporate practices. The Institute for Mergers, Acquisitions and Alliances (IMAA), which has been active in Vietnam since 2006, along with M&A expert Christopher Kummer, provided analytical insights into the trajectory of the Vietnamese M&A market. They forecasted a decline in the mergers and acquisitions trend in 2018, following peak activity levels observed in 2016 and 2017. This anticipated slowdown was attributed to a combination of market saturation in certain sectors, increased regulatory scrutiny, and the aforementioned structural challenges. The forecast suggested a period of consolidation and recalibration for the Vietnamese M&A market, as stakeholders adjusted to evolving economic conditions and sought to address underlying impediments to deal-making. Among the largest and most notable mergers and acquisitions deals in Vietnam since 2000, several stand out for their scale and strategic significance. On December 19, 2017, Vietnam Beverage Co. Ltd., a domestic company, acquired Sabeco, one of the country’s largest beverage producers, for an unprecedented 4,838.49 million USD. This transaction marked the highest-value M&A deal in Vietnam’s history, reflecting both the growing maturity of local conglomerates and the strategic importance of the beverage sector. Earlier, on February 16, 2012, Perenco SA, a French oil and gas company, acquired ConocoPhillips’ oil and gas assets in Vietnam for 1,290.00 million USD, signaling strong foreign interest in Vietnam’s natural resources and energy sector. In the retail and consumer goods sector, several significant transactions occurred. On April 29, 2016, Central Group of Companies from Thailand acquired Casino Guichard-Perrachon-BigC, a major retail chain in Vietnam, for 1,135.33 million USD. This deal exemplified regional investment flows and the strategic expansion of Southeast Asian conglomerates into the Vietnamese market. Similarly, on December 25, 2015, Singha Asia Holding Pte Ltd., based in Singapore, acquired Masan Consumer Corporation, a prominent Vietnamese consumer goods company, for 1,100.00 million USD, highlighting the attractiveness of Vietnam’s fast-growing consumer market. The steel and manufacturing sectors also saw notable M&A activity. On February 13, 2015, China Steel Asia Pacific Holding Pte Ltd. from Singapore acquired Formosa Ha Tinh (Cayman) Ltd., a Vietnamese steel producer, for 939.00 million USD. This acquisition underscored the strategic importance of Vietnam’s industrial base and the role of foreign investors in its development. In the wholesale and distribution sector, Berli Jucker Public Company Limited from Thailand acquired Metro Cash & Carry Vietnam Co on August 7, 2014, for 875.20 million USD, followed by a subsequent acquisition of the same company by TCC Land International Pte Ltd. from Singapore on April 17, 2015, for 705.14 million USD, reflecting dynamic ownership changes in the retail distribution landscape. Financial services also featured prominently in Vietnam’s M&A history. On December 27, 2012, Bank of Tokyo-Mitsubishi UFJ Ltd. from Japan acquired a stake in VietinBank, one of Vietnam’s largest state-owned banks, for 742.34 million USD, illustrating the strategic entry of international financial institutions into the Vietnamese banking sector. Among domestic consolidation efforts, on October 5, 2011, Vincom Joint Stock Company acquired Vinpearl Joint Stock Company, both Vietnamese entities, for 649.39 million USD, representing significant intra-national corporate restructuring. Additionally, on January 28, 2016, Masan Group Corporation acquired Masan Consumer Corporation for 600.00 million USD, further consolidating its position in the consumer goods market. All of the top ten largest mergers and acquisitions deals listed during this period were inbound transactions into Vietnam, with no outbound deals among them. This pattern highlights Vietnam’s role as an attractive target market for foreign investors rather than a source of outbound M&A activity. The dominance of inbound deals among the largest transactions reflects the country’s status as an emerging economy with significant growth potential, drawing substantial foreign capital and expertise. The absence of major outbound deals suggests that Vietnamese companies were primarily focused on domestic growth and consolidation, while leveraging inbound investment to accelerate development and integration into the global economy.

Saigon Port stands as the busiest container port in Vietnam, playing a pivotal role in the country’s maritime trade infrastructure. It possesses the capability to accommodate post-Panamax ships, a classification of vessels that exceed the size limits of the original Panama Canal locks, thereby enabling the port to handle some of the largest and most modern container ships in global shipping. This capacity significantly enhances Vietnam’s ability to engage in international trade by facilitating the efficient movement of large volumes of goods. The port’s strategic location in Ho Chi Minh City, the country’s economic hub, further consolidates its importance, serving as a critical gateway for both imports and exports that drive Vietnam’s export-oriented economy. Economic relations between Vietnam and the United States have undergone notable improvement since the early 2000s, highlighted by a landmark bilateral agreement reached in December 2001. This agreement was instrumental in facilitating an increase in Vietnam’s exports to the U.S. market by reducing trade barriers and expanding market access for Vietnamese goods. The agreement marked a significant step toward normalizing trade relations following decades of limited economic exchange after the Vietnam War. However, despite these advances, several challenges continued to hinder the full realization of the agreement’s potential. Notably, disagreements over the export of textiles and catfish from Vietnam to the United States created significant obstacles. These disputes centered on issues such as tariff classifications, anti-dumping measures, and concerns over product standards, which complicated trade flows and delayed the full implementation of the agreement’s provisions. Further complicating the economic relationship between the United States and Vietnam were political and legislative factors emanating from the U.S. Congress. Efforts by some members of Congress sought to condition non-humanitarian aid to Vietnam on improvements in the country’s human rights record. This linkage introduced a layer of political complexity that affected bilateral economic cooperation, as aid and trade discussions became intertwined with broader concerns about governance and civil liberties. Concurrently, ongoing bilateral dialogues addressed persistent barriers to trade, including tariff and non-tariff obstacles, and sought to strengthen intellectual property rights protections in Vietnam. These discussions aimed to align Vietnam’s trade and legal frameworks with international standards, thereby fostering a more predictable and secure environment for U.S. investors and exporters. Vietnam’s economic relationship with China holds particular significance due to China’s rapid economic growth and its status as a major regional power. Historically, the two countries experienced territorial disputes that occasionally strained bilateral relations; however, by the early 2000s, most of these disputes had been resolved or managed through diplomatic channels. This resolution paved the way for a rapid expansion of trade between Vietnam and China. By 2004, Vietnam was importing more products from China than from any other country, reflecting China’s role as a dominant supplier of manufactured goods, raw materials, and intermediate products essential to Vietnam’s industrial development. The deepening trade ties underscored the interdependence between the two economies and highlighted China’s influence on Vietnam’s trade patterns and economic growth trajectory. In November 2004, the Association of Southeast Asian Nations (ASEAN), of which Vietnam is a member, and China announced plans to establish the world’s largest free-trade area by 2010. This ambitious initiative aimed to enhance regional economic integration by reducing tariffs, harmonizing trade regulations, and promoting investment flows among the participating countries. The proposed free-trade area was expected to encompass a vast market with significant economic potential, thereby facilitating greater economic cooperation and competitiveness in the region. For Vietnam, participation in this initiative represented an opportunity to deepen its integration into regional supply chains and to leverage the economic dynamism of both ASEAN and China to foster sustainable growth. Vietnam’s accession to the World Trade Organization (WTO) on January 11, 2007, marked a watershed moment in its economic development and international trade relations. WTO membership signified Vietnam’s commitment to adopting global trade norms and liberalizing its economy in accordance with internationally recognized rules. This integration into the global trading system opened new avenues for market access, attracted foreign direct investment, and enhanced Vietnam’s credibility as a reliable trading partner. The accession process involved extensive reforms in domestic laws, regulations, and institutional frameworks to comply with WTO requirements, thereby promoting transparency, competition, and the protection of intellectual property rights. In December 2015, Vietnam further advanced its regional economic integration by joining the ASEAN Economic Community (AEC) alongside the other nine ASEAN member states. The AEC aimed to create a single market and production base within Southeast Asia, facilitating the freer flow of labor, investment, goods, and services among member countries. Vietnam’s participation in the AEC reflected its strategic objective to deepen economic ties within the region, enhance competitiveness, and attract greater foreign investment. The community’s framework sought to harmonize standards, reduce trade barriers, and promote economic cooperation, thereby enabling Vietnam to benefit from increased regional connectivity and integration. Vietnam’s current economic landscape is shaped by its navigation of complex relationships with multiple global and regional powers, including Russia, China, and the United States. This multilateral approach reflects Vietnam’s strategic goal of economic diversification and multilateralization, seeking to balance competing interests and maximize opportunities for trade, investment, and technological cooperation. By engaging with a broad spectrum of partners, Vietnam aims to reduce dependence on any single country, enhance its bargaining power in international forums, and foster sustainable economic development through diversified sources of growth and innovation. Regionally, Vietnam’s economic ties extend beyond China to include significant relationships with South Korea, Japan, and other ASEAN countries. These partnerships are complemented by connections with key constituents such as Taiwan, Hong Kong, Australia, New Zealand, and India, reflecting Vietnam’s active involvement in broader regional frameworks such as ASEAN+3 and ASEAN+6. These frameworks facilitate cooperation on economic, financial, and trade issues, enabling Vietnam to participate in initiatives that promote regional stability and prosperity. Through these multifaceted relationships, Vietnam integrates itself into dynamic regional supply chains, attracts investment, and accesses diverse markets, thereby reinforcing its role as a vital player in the Asia-Pacific economic landscape.

Since the implementation of the Đổi Mới economic reforms in 1986, Vietnam experienced a transformative period characterized by consistent double-digit growth in both exports and imports, which significantly expanded the country’s foreign trade volume. These reforms marked a strategic shift from a centrally planned economy to a more market-oriented system, encouraging private enterprise and foreign investment. As a result, Vietnam’s trade sector rapidly integrated with global markets, fostering increased production capacity and diversification of export goods. The steady expansion in trade activities reflected the country’s growing competitiveness and its ability to attract international partners, setting the foundation for sustained economic development. Vietnam’s accession to the World Trade Organization (WTO) in 2007 represented a pivotal milestone in its economic integration, promising greater access to global markets and adherence to international trade rules. However, this milestone also sparked domestic concerns regarding the country’s trade account deficits, which persisted in the years following its WTO entry. The liberalization of trade exposed Vietnam to intensified competition, and while exports grew, imports expanded at an even faster pace, leading to widening trade imbalances. Policymakers and economists debated the implications of these deficits, emphasizing the need for structural reforms to enhance export competitiveness and manage import dependency. Between 2007 and 2012, Vietnam consistently ran substantial trade deficits with the rest of the world, culminating in a record deficit of US$18 billion in 2008. This peak deficit coincided with the global financial crisis, which disrupted trade flows and affected demand for Vietnamese exports. Despite the challenging international environment, Vietnam’s imports continued to outpace exports, reflecting strong domestic demand for machinery, raw materials, and consumer goods necessary for industrialization and urbanization. The large trade deficits during this period underscored the country’s reliance on imported inputs for production and the need to improve value-added export capacity. Following the 2008 peak, the trade account deficit began to improve gradually, culminating in Vietnam recording its first trade surplus since 1993 in 2012, amounting to US$780 million. This turnaround was driven by a combination of factors, including increased export volumes, diversification of export products, and improved global economic conditions. The government’s efforts to promote export-oriented industries, coupled with investments in infrastructure and trade facilitation, contributed to the positive shift in trade balances. The 2012 surplus marked a significant achievement, signaling Vietnam’s growing ability to generate foreign exchange earnings and reduce external vulnerabilities. In 2012, total trade reached US$228.13 billion, representing a 12.1% increase compared to the previous year. Both exports and imports expanded, with exports growing at a faster rate, which contributed to the surplus. This growth reflected the continued integration of Vietnam into global value chains, as well as rising demand for Vietnamese products such as textiles, electronics, and agricultural goods. The expansion in trade volume also highlighted the increasing sophistication of the Vietnamese economy and its capacity to engage with diverse international markets. Vietnam maintained its positive trade balance in the years following 2012, recording a surplus of US$863 million in 2013, which represented the second consecutive year of surplus. This sustained performance was supported by ongoing export growth and efforts to manage import expenditures more effectively. The government’s focus on enhancing export competitiveness through trade agreements and industrial upgrading played a crucial role in maintaining favorable trade balances. The continuity of trade surpluses indicated a structural improvement in Vietnam’s trade dynamics, moving away from the deficits that had characterized the previous decade. The year 2014 marked a historic milestone for Vietnam’s foreign trade, as the country achieved its largest trade surplus to date, amounting to US$2.14 billion. This surplus represented the third consecutive year of positive trade balances and underscored the success of Vietnam’s export expansion strategies. The growth was fueled by strong performance in key sectors such as electronics, footwear, and seafood, which benefited from both increased global demand and improved production efficiencies. The record surplus also reflected Vietnam’s ability to attract foreign direct investment, which facilitated technology transfer and enhanced export capacity. Vietnam’s trade surplus record was surpassed in 2017 when the country recorded a surplus of US$2.92 billion, reflecting continued growth in both exports and imports. Total trade in 2017 reached US$425.12 billion, with exports amounting to US$214.01 billion, representing a 21.2% increase from the previous year, and imports totaling US$211.1 billion, up by 20.8%. This robust growth was driven by the expansion of manufacturing and processing industries, particularly in electronics and telecommunications, which became major contributors to export earnings. The increasing trade surplus demonstrated Vietnam’s strengthening position in global trade and its capacity to generate foreign exchange surpluses. Detailed trade statistics from 2001 to 2024 illustrate a steady increase in total trade, exports, and imports, with notable fluctuations in trade balances over the years. In 2001, total trade amounted to US$31.20 billion, with exports valued at US$15.00 billion and imports at US$16.20 billion, resulting in a trade deficit of US$1.2 billion. This early stage of Vietnam’s trade development reflected a nascent export sector and a reliance on imported goods to support domestic consumption and industrialization. The modest deficit underscored the initial challenges faced by Vietnam in balancing trade flows during its transition to a market-oriented economy. By 2007, total trade had expanded significantly to US$111.30 billion, with exports reaching US$48.6 billion, representing a 22.1% increase, and imports rising to US$62.7 billion, a 39.6% increase compared to previous years. This rapid growth in trade volume was accompanied by a widening trade deficit of US$14.1 billion. The disproportionate increase in imports relative to exports reflected strong domestic demand for capital goods and raw materials, as well as consumer products. The trade deficit highlighted the challenges Vietnam faced in developing a balanced trade structure while undergoing rapid industrialization and economic growth. The peak trade deficit occurred in 2008, reaching US$18 billion, with total trade valued at US$143.40 billion. Exports rose to US$62.7 billion, marking a 29.0% increase, while imports climbed to US$80.7 billion, a 28.7% increase. Despite impressive export growth, the even larger surge in imports contributed to the record deficit. This period coincided with the global financial crisis, which affected trade patterns worldwide but did not significantly deter Vietnam’s import demand. The high deficit underscored the country’s dependence on imported inputs and the need for enhancing domestic production capabilities. In 2009, the trade deficit decreased to US$12.9 billion amid a contraction in both exports and imports due to the global economic downturn. Total trade declined to US$127 billion, with exports falling to US$57.1 billion, an 8.9% decrease, and imports dropping to US$69.9 billion, a 13.4% decrease. The sharper reduction in imports relative to exports contributed to the narrowing of the trade deficit. This adjustment reflected the impact of reduced domestic demand and cautious import behavior by businesses during the economic slowdown. The recovery in trade balances indicated Vietnam’s resilience and adaptability in the face of external shocks. From 2010 onwards, Vietnam’s exports and imports steadily increased, reflecting the country’s economic recovery and ongoing integration into global markets. In 2011, exports reached US$96.91 billion, while imports totaled US$106.75 billion, resulting in a trade deficit of US$9.84 billion. The growth in trade volume was supported by expanding manufacturing sectors and increased foreign investment. However, the persistent deficit highlighted the continued reliance on imported goods and inputs necessary for production and consumption. In 2012, Vietnam recorded a trade surplus of US$780 million, with exports totaling US$114.57 billion, an 18.2% increase, and imports at US$113.79 billion, a 6.6% increase. This marked a significant shift from previous years, as export growth outpaced import growth, enabling the country to achieve a positive trade balance. The surplus reflected improvements in export competitiveness, diversification of export markets, and effective trade policies. The narrowing gap between exports and imports signaled progress toward a more balanced and sustainable trade structure. The trade surplus continued in 2013 and 2014, with surpluses of US$863 million and US$2.14 billion respectively. During this period, exports and imports grew at rates between 12.1% and 15.4%, demonstrating robust trade expansion. The sustained surpluses were driven by strong performances in key export sectors, including electronics, textiles, and agricultural products. The government’s strategic focus on export promotion and trade facilitation contributed to maintaining favorable trade balances and supporting economic growth. In 2015, Vietnam experienced a trade deficit of US$3.54 billion despite total trade increasing to US$327.76 billion. Exports and imports both grew, but imports outpaced exports, leading to the deficit. This reversal reflected increased domestic demand for imported goods and raw materials, as well as fluctuations in global commodity prices. The deficit underscored the ongoing challenges in achieving consistent trade surpluses amid dynamic economic conditions and evolving trade patterns. The trade surplus returned in 2016, reaching US$2.68 billion, with exports of US$175.94 billion and imports of US$173.26 billion. This positive balance indicated improved export performance and more balanced import growth. The recovery was supported by expanding manufacturing exports, particularly in electronics and textiles, as well as increased foreign direct investment. The surplus reflected Vietnam’s strengthening trade competitiveness and resilience in global markets. In 2017, the trade surplus reached a new high of US$2.92 billion, with total trade valued at US$425.12 billion. Exports rose to US$214.01 billion, a 21.2% increase, while imports increased to US$211.1 billion, a 20.8% rise. This growth was driven by the expansion of high-value manufacturing and processing industries, as well as the country’s participation in multiple free trade agreements. The record surplus demonstrated Vietnam’s ability to sustain export-led growth and generate foreign exchange earnings. The trade surplus expanded further in 2018 to US$6.8 billion, with total trade reaching US$480.17 billion. Exports amounted to US$243.48 billion, a 13.2% increase, and imports totaled US$236.69 billion, an 11.1% increase. The continued surplus growth was supported by diversification of export products and markets, as well as improvements in trade infrastructure and logistics. The expanding surplus highlighted Vietnam’s increasing role as a key player in global supply chains. In 2019, the trade surplus increased to US$11.12 billion, with exports at US$264.189 billion, representing an 8.4% increase, and imports at US$253.071 billion, a 6.8% increase. This growth reflected sustained demand for Vietnamese goods internationally and effective management of import expenditures. The surplus underscored the country’s ongoing success in balancing trade flows amid a complex global economic environment. The surplus rose significantly in 2020 to US$19.95 billion, despite the global disruptions caused by the COVID-19 pandemic. Exports reached US$282.65 billion, a 7% increase, while imports were US$262.7 billion, a 3.7% increase. Vietnam’s ability to maintain export growth during a period of worldwide economic contraction illustrated the resilience of its manufacturing and export sectors. The substantial surplus provided a buffer against external shocks and supported economic stability. Projections and data for 2024 indicate that Vietnam’s total trade will reach US$786.29 billion, with exports at US$405.53 billion, a 14.3% increase, and imports at US$380.76 billion, a 16.7% increase. The trade surplus is expected to be US$24.77 billion, reflecting continued growth and robust trade performance. These figures highlight Vietnam’s ongoing integration into the global economy and its capacity to expand both export and import activities while maintaining a positive trade balance. Overall, Vietnam’s foreign trade has demonstrated robust growth since the introduction of Đổi Mới reforms in 1986, transitioning from persistent trade deficits to sustained trade surpluses in the 2010s. This evolution reflects the country’s increasing integration into the global economy, successful export expansion strategies, and the development of competitive manufacturing and processing industries. The dynamic trade performance underscores Vietnam’s emergence as a significant participant in international trade and its continued economic development trajectory.

In 2004, Vietnam’s merchandise exports were valued at approximately US$26.5 billion, reflecting a period of rapid growth that paralleled a significant increase in imports. This expansion was indicative of the country’s accelerating integration into the global economy following economic reforms and trade liberalization efforts initiated in the late 1980s and 1990s. The export structure at that time was characterized by a diverse range of products, with crude oil constituting the largest share at 22.1% of total exports. Textiles and garments represented a substantial portion as well, accounting for 17.1%, while footwear contributed 10.5%. Fisheries products made up 9.4%, and electronics, though still emerging, comprised 4.1% of the export basket. These figures highlighted the dual nature of Vietnam’s export economy, combining natural resource extraction with growing manufacturing and processing industries. The geographical distribution of Vietnam’s exports in 2004 revealed a strong orientation toward key global markets. The United States was the largest export destination, absorbing 18.8% of Vietnam’s total exports, underscoring the importance of the American market for Vietnamese goods, particularly textiles and footwear. Japan followed with 13.2%, reflecting longstanding economic ties and Japan’s role as a major investor and trading partner. China accounted for 10.3%, benefiting from geographic proximity and increasing cross-border trade. Other significant markets included Australia (6.9%), Singapore (5.2%), Germany (4.0%), and the United Kingdom (3.8%). This diverse set of trading partners illustrated Vietnam’s broadening international trade relationships during the early 2000s. By 2012, Vietnam’s export sector had experienced substantial growth, with total exports rising by 18.2% to reach US$114.57 billion. This dramatic increase was driven by both expanding production capacity and enhanced access to foreign markets, facilitated by Vietnam’s participation in various free trade agreements and its accession to the World Trade Organization in 2007. The primary export markets in 2012 demonstrated a shift toward more regional integration and diversification. The European Union emerged as the largest market, with exports valued at US$20 billion, reflecting increased demand for Vietnamese manufactured goods and agricultural products. The United States remained a critical partner, importing US$19 billion worth of goods. ASEAN countries collectively imported US$17.8 billion, highlighting the growing importance of regional trade within Southeast Asia. Japan accounted for US$13.9 billion, China for US$14.2 billion, and South Korea for US$7 billion, all indicative of Vietnam’s expanding economic ties with East Asian economies. In 2013, Vietnam’s export growth continued robustly, increasing by 15.4% to a total value of US$132.17 billion. One of the most notable trends during this period was the rapid expansion of electronics exports, which comprised 24.5% of total exports, a significant rise from just 4.4% in 2008. This surge reflected the development of electronics manufacturing as a key sector, driven by foreign direct investment from multinational corporations and the establishment of export-oriented industrial zones. Despite the rapid growth in electronics, textiles and garments remained a vital component of Vietnam’s export economy, with exports valued at approximately US$17.9 billion in 2013. This sector continued to benefit from Vietnam’s competitive labor costs and preferential trade agreements, maintaining its position as a major employer and source of foreign exchange. The upward trajectory of Vietnam’s exports persisted into 2014, with a growth rate of 13.6% that brought total export value to US$150.1 billion. The export composition further solidified around high-value manufactured goods, with electronics and electronics parts, textiles and garments, and computers and computer parts identified as the three main export groups. This diversification into technology-intensive products marked a significant evolution from the earlier reliance on natural resources and basic manufacturing. The United States sustained its role as Vietnam’s largest export market in 2014, with exports valued at US$28.5 billion, reflecting the continued strength of bilateral trade relations. The European Union ranked second with US$27.9 billion in exports, underscoring the importance of the EU as a destination for Vietnamese goods. ASEAN countries held the third position, followed by China in fourth place, and Japan as the fifth largest export market, illustrating the sustained relevance of regional trade networks alongside global partnerships. By 2024, Vietnam’s export sector had further expanded, with exports increasing by 14.3 percent compared to the previous year. The composition of major export commodities reflected the country’s continued industrialization and integration into global value chains. Garments and textiles remained a significant export category, valued at US$37 billion, underscoring the sector’s enduring importance in terms of employment and foreign exchange earnings. Electronics exports had grown substantially, reaching US$72.6 billion, which highlighted Vietnam’s emergence as a major hub for electronics manufacturing and assembly in Asia. Additionally, plastics exports accounted for US$11.8 billion, reflecting the growth of Vietnam’s chemical and materials processing industries. Furniture exports reached US$3.4 billion, demonstrating the country’s expanding capabilities in wood processing and furniture manufacturing for international markets. These figures collectively illustrate Vietnam’s transformation into a diversified export economy with a strong manufacturing base and increasing participation in high-tech and value-added industries.

In 2004, Vietnam’s merchandise imports were valued at approximately US$31.5 billion, reflecting a period of rapid economic growth and increasing integration into global trade networks. This surge in import activity was driven by the country’s expanding industrial base and rising consumer demand, which necessitated a diverse range of imported goods to support both production and consumption. The composition of imports during this year highlighted the industrialization trajectory Vietnam was undertaking, with machinery accounting for the largest share at 17.5% of total imports. This category primarily included equipment and components essential for manufacturing and infrastructure development. Refined petroleum products constituted 11.5% of imports, underscoring the growing energy needs of the economy as industrial output and transportation sectors expanded. Steel imports made up 8.3%, reflecting the construction boom and the development of heavy industries. Materials for the textile industry, which represented 7.2% of imports, and cloth at 6.0%, illustrated the importance of the textile and garment sector as a key export-oriented industry requiring substantial raw materials and intermediate goods from abroad. The geographical origins of Vietnam’s imports in 2004 demonstrated the country’s close economic ties with several East and Southeast Asian economies. China emerged as the largest supplier, providing 13.9% of Vietnam’s imports, a reflection of its role as a regional manufacturing hub and neighbor. Taiwan followed closely with 11.6%, supplying a significant portion of machinery and electronic components. Singapore accounted for 11.3%, serving as a major trading and re-export center in the region. Japan’s share stood at 11.1%, reflecting longstanding economic relations and Japan’s role as a key investor and technology provider. South Korea contributed 10.4%, highlighting the growing economic cooperation between the two countries. Thailand and Malaysia supplied 5.8% and 3.8% respectively, indicating the importance of ASEAN countries in Vietnam’s import portfolio. This distribution of import partners underscored Vietnam’s strategic positioning within the dynamic East Asian production networks and its reliance on regional supply chains for industrial inputs. By 2012, Vietnam’s import value had expanded significantly, rising by 6.6% to reach US$113.79 billion. This substantial increase over an eight-year period reflected the country’s sustained economic growth, industrial diversification, and rising consumer purchasing power. The growth in imports was closely linked to the expansion of export-oriented manufacturing, which required a steady inflow of raw materials, intermediate goods, and capital equipment. The composition of import partners evolved somewhat during this period, with China solidifying its position as Vietnam’s largest source of imports, accounting for US$29.2 billion. This dominance was driven by China’s vast manufacturing capabilities and competitive pricing, making it a critical supplier of machinery, electronics, textiles, and consumer goods. The collective ASEAN countries emerged as the second largest import source, with imports totaling US$22.3 billion, reflecting increasing regional economic integration and the benefits of trade agreements within the ASEAN framework. South Korea’s imports to Vietnam reached US$16.2 billion, signaling deepening industrial linkages and investment flows, particularly in electronics and automotive sectors. Japan remained a major partner with US$13.7 billion in imports, maintaining its role as a key technology and machinery supplier. The European Union contributed approximately US$10 billion, reflecting diversified trade relations beyond the Asia-Pacific region. The United States, with imports valued at US$6.3 billion, also represented a significant market, underscoring Vietnam’s expanding global trade connections. In 2014, Vietnam’s imports continued their upward trajectory, increasing by 12.1% to a total value of US$148 billion. This robust growth was driven largely by the importation of materials and machinery essential for export production, demonstrating the country’s deepening integration into global value chains. The manufacturing sector, particularly electronics, textiles, and footwear, relied heavily on imported intermediate goods and capital equipment to sustain export growth. The demand for machinery and materials was also stimulated by ongoing infrastructure development and industrial expansion. China maintained its position as Vietnam’s largest import partner in 2014, with imports valued at US$43.7 billion. This represented a significant increase from previous years and highlighted the continued reliance on China’s manufacturing sector for a broad range of industrial inputs and consumer products. The ASEAN region collectively remained the second largest source of imports, with total imports amounting to US$23.1 billion, reflecting the importance of regional supply chains and the benefits of preferential trade agreements within the bloc. South Korea ranked third among Vietnam’s import partners, followed by Japan in fourth place. Both countries continued to supply critical machinery, electronics, and intermediate goods that supported Vietnam’s export industries. The European Union held the fifth position, providing a diverse range of industrial and consumer products. This ranking of import partners in 2014 illustrated Vietnam’s strategic economic relationships, balancing regional integration with broader global trade connections to support its rapid industrialization and export-led growth.

In 2004, Vietnam’s external debt reached a total of US$16.6 billion, which constituted approximately 37% of the country’s gross domestic product (GDP). This level of indebtedness reflected the ongoing challenges and opportunities faced by the Vietnamese economy as it integrated more deeply into the global financial system. Over the preceding decades, Vietnam had sought to balance the need for external financing to support its development goals with the imperative of maintaining debt sustainability. The external debt figure in 2004 underscored both the reliance on foreign capital and the cautious approach to borrowing that characterized Vietnam’s economic strategy during this period. Between 1988 and December 2004, cumulative foreign direct investment (FDI) commitments in Vietnam amounted to US$46 billion, demonstrating the country’s growing appeal as a destination for international investors. Of this total committed capital, approximately 58% had been disbursed by the end of 2004, indicating a significant flow of actual investment into the Vietnamese economy. This inflow of FDI played a critical role in modernizing Vietnam’s industrial base, infrastructure, and service sectors, contributing to the rapid economic growth experienced in the late 1990s and early 2000s. The steady increase in disbursed FDI also reflected improvements in the investment climate and the gradual liberalization of the Vietnamese economy. Geographically, foreign direct investment was heavily concentrated in the two major urban centers of Ho Chi Minh City and Hanoi, which together attracted around half of the total FDI commitments. This concentration highlighted the importance of these metropolitan areas as economic hubs, offering better infrastructure, more developed markets, and a larger pool of skilled labor compared to other regions. Ho Chi Minh City, as the commercial capital, and Hanoi, as the political and administrative center, provided foreign investors with strategic advantages in terms of access to domestic consumers and government institutions. However, this geographic focus also underscored regional disparities in economic development and posed challenges for balanced growth across the country. In 2003 alone, new foreign direct investment commitments totaled US$1.5 billion, signaling sustained investor interest despite various challenges. This level of new investment commitments suggested confidence in Vietnam’s long-term economic prospects, as well as the effectiveness of government policies aimed at attracting foreign capital. The inflows supported ongoing industrial expansion and infrastructure projects, which were essential for maintaining the momentum of economic growth and enhancing Vietnam’s competitiveness in global markets. The distribution of licensed FDI across sectors revealed a clear preference for industry and construction, which received the largest share of foreign investment. This sectoral focus was consistent with Vietnam’s development strategy, which prioritized industrialization and urban infrastructure development as engines of growth. Following industry and construction, significant portions of FDI were directed toward oil and gas, fisheries, agriculture and forestry, transportation and communications, and hotels and tourism. The diversification of investment across these sectors reflected the multifaceted nature of Vietnam’s economy and the government’s efforts to promote balanced development, while leveraging the country’s natural resources and strategic location. Looking ahead, Vietnam set ambitious targets for foreign direct investment during the 2006 to 2010 period, aiming to attract a total of US$18 billion in FDI. This target was aligned with the government’s broader objective of achieving an economic growth rate exceeding 7%, which was considered necessary to sustain poverty reduction and improve living standards. The targeted FDI inflows were expected to finance critical infrastructure, enhance industrial capacity, and support the development of export-oriented sectors, thereby contributing to the country’s integration into regional and global value chains. Despite the increasing volume of FDI inflows, foreign investors often perceived Vietnam as a risky investment destination. A survey conducted by the Japan External Trade Organization among Japanese companies operating in Vietnam highlighted several concerns that tempered investor enthusiasm. Respondents identified high costs associated with utilities, office rentals, and skilled labor as significant obstacles to investment profitability. These cost factors raised questions about the efficiency of resource allocation and the competitiveness of the Vietnamese business environment relative to other emerging markets. Beyond cost considerations, additional challenges to foreign investment were documented by the U.S. State Department, which pointed to systemic issues such as corruption, bureaucratic inefficiencies, the lack of transparent regulations, and inadequate enforcement of investor rights. Corruption, in particular, was a persistent problem that undermined the predictability and fairness of the investment climate. Bureaucratic red tape and inconsistent application of laws further complicated business operations, increasing transaction costs and deterring some potential investors. The absence of strong legal protections for foreign investors also contributed to perceptions of risk, as companies faced uncertainties regarding contract enforcement and dispute resolution. Vietnam’s standing in global corruption rankings reflected these concerns. In 2004, the country was tied for 102nd place in Transparency International’s Corruption Perceptions Index, indicating a relatively high level of perceived corruption compared to other nations. This ranking underscored the need for institutional reforms to improve governance and enhance the credibility of the investment environment. The prevalence of corruption not only affected foreign investors but also had broader implications for economic efficiency and social equity. Academic research on the relationship between foreign investment and corruption in Vietnam provided further insights into the dynamics at play. A study found that foreign firms exhibited a higher propensity to engage in bribery when entering restricted sectors, where regulatory barriers and government controls were more stringent. This tendency suggested that restrictive policies inadvertently encouraged corrupt practices as firms sought to navigate complex approval processes. Conversely, the study concluded that removing investment restrictions reduced bribery by increasing the number of Foreign Investment Enterprises (FIEs) and fostering competition within sectors. Greater competition diminished the leverage of individual firms and officials to extract illicit payments, thereby improving the overall investment climate. The World Bank’s assistance program for Vietnam was designed to address several key objectives that aligned with the country’s development priorities. These objectives included supporting the transition to a market economy, enhancing equitable and sustainable development, and promoting good governance. Through financial and technical assistance, the World Bank aimed to facilitate policy reforms, strengthen institutional capacity, and improve social outcomes. This support was critical in helping Vietnam manage the complexities of economic transformation while ensuring that growth benefits were broadly shared across society. From 1993 through 2004, Vietnam received pledges totaling US$29 billion in official development assistance (ODA), reflecting substantial international support for its development agenda. Of this amount, about US$14 billion, or 49%, was disbursed during the period, providing vital resources for infrastructure projects, social programs, and institutional reforms. The disbursement rate indicated both the scale of aid delivery and the challenges associated with effectively absorbing and utilizing foreign assistance. ODA played a complementary role alongside FDI and domestic investment in driving Vietnam’s rapid economic progress. In 2004 specifically, international donors pledged US$2.25 billion in ODA to Vietnam, of which US$1.65 billion was actually disbursed. This level of aid demonstrated continued donor confidence in Vietnam’s development trajectory and the effectiveness of its reform efforts. The disbursed funds supported a wide range of initiatives, including poverty reduction, education, health, and infrastructure development, all of which were essential for sustaining inclusive growth. Three donors—Japan, the World Bank, and the Asian Development Bank—accounted for 80% of ODA disbursements in 2004, underscoring their pivotal role in Vietnam’s development financing landscape. Japan was the largest bilateral donor, providing significant concessional loans and technical assistance, while the World Bank and the Asian Development Bank offered multilateral support focused on policy reforms and infrastructure investments. The concentration of aid from these key partners reflected longstanding relationships and aligned development priorities. For the period from 2006 to 2010, Vietnam anticipated receiving between US$14 billion and US$15 billion in official development assistance. This projection indicated sustained international commitment to supporting Vietnam’s continued economic and social development. The planned aid flows were expected to complement domestic resources and foreign direct investment, helping to finance critical projects and reforms aimed at achieving higher growth and improved living standards. Foreign direct investment commitments in Vietnam continued to rise beyond 2004, with pledged FDI increasing to US$21.3 billion in 2007. This upward trend accelerated in the first half of 2008, when commitments reached a record US$31.6 billion. The sharp increase reflected growing investor confidence in Vietnam’s economic potential, driven by factors such as market size, strategic location, and ongoing reforms. The surge in FDI commitments also signaled the country’s emergence as a major destination for foreign capital in Southeast Asia. Mergers and acquisitions (M&A) became an increasingly important channel for investment in Vietnam’s economy, particularly after 2005. This trend indicated a maturation of the investment landscape, as foreign investors sought to acquire existing domestic companies to gain market access, technology, and managerial expertise. M&A activity complemented greenfield investments by enabling faster entry and expansion, as well as facilitating corporate restructuring and consolidation within key sectors. The growing prominence of M&A reflected the dynamic nature of Vietnam’s economic transformation and the increasing sophistication of its capital markets. In 2023, Vietnam realized foreign direct investment inflows amounting to US$23.2 billion, demonstrating the country’s continued attractiveness to global investors. Additionally, registered FDI commitments reached US$36.6 billion during the same year, indicating strong future investment prospects. These figures underscored Vietnam’s sustained position as a leading recipient of foreign capital in the region, supported by ongoing economic reforms, a favorable demographic profile, and integration into global supply chains. The substantial inflows and commitments in 2023 reflected the resilience and dynamism of Vietnam’s economy in the face of global uncertainties.

Vietnam has actively engaged in numerous free trade agreements (FTAs) that have significantly shaped its economic landscape and integration into the global market. As a member of the Association of Southeast Asian Nations (ASEAN), Vietnam participates in the ASEAN Free Trade Area (AFTA), which was established to facilitate and promote trade among ASEAN member countries by reducing tariffs and non-tariff barriers. AFTA has played a crucial role in enhancing regional economic cooperation and increasing the competitiveness of ASEAN economies, including Vietnam, by fostering a more open and efficient trading environment within Southeast Asia. Expanding its trade relations beyond the immediate region, Vietnam is also part of the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), a comprehensive free trade agreement between ASEAN and the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) countries. This agreement was signed on 27 February 2009 and came into effect on 1 January 2010. AANZFTA aims to reduce tariffs, eliminate trade barriers, and promote investment and economic cooperation across a wide range of sectors. Detailed information about AANZFTA, including its provisions and implementation status, is available through official online resources, underscoring the transparency and accessibility of the agreement’s framework. Another major trade pact involving Vietnam is the ASEAN–China Free Trade Area (ACFTA), which has been operational since 1 January 2010. ACFTA represents one of the largest free trade areas in the world by population and economic output, promoting trade and investment flows between ASEAN countries, including Vietnam, and China. The agreement has facilitated the reduction of tariffs on thousands of product lines, thereby enhancing Vietnam’s export opportunities to the vast Chinese market. It also encourages cooperation in various sectors such as services, investment, and intellectual property rights, contributing to deeper economic integration between Vietnam and China. Similarly, the ASEAN–India Free Trade Area (AIFTA) came into effect on 1 January 2010, marking a significant step in strengthening trade relations between ASEAN members and India. AIFTA aims to create a more liberalized and facilitative trade environment by progressively reducing tariffs and addressing non-tariff barriers. For Vietnam, this agreement has opened up greater access to the Indian market, which is one of the fastest-growing economies globally, thus diversifying its export destinations and enhancing bilateral economic cooperation. The agreement also promotes collaboration in areas such as services trade, investment, and economic development initiatives. Vietnam’s trade relations with Japan are formalized through the ASEAN–Japan Comprehensive Economic Partnership (AJCEP), a trade agreement designed to facilitate economic cooperation between ASEAN countries and Japan. AJCEP encompasses tariff reductions, trade liberalization, and enhanced cooperation in trade-related areas such as customs procedures and standards. This agreement supports Vietnam’s export-oriented industries by providing preferential market access to Japan, one of the world’s largest economies, and encourages Japanese investment in Vietnam’s manufacturing and service sectors. The ASEAN–Korea Free Trade Area (AKFTA) has been operational since 1 January 2010, further strengthening trade ties between ASEAN nations, including Vietnam, and South Korea. AKFTA reduces tariffs on a broad range of goods and services, fostering enhanced economic integration and cooperation. For Vietnam, the agreement has been instrumental in expanding trade volumes with South Korea, which is a major investor and trading partner. It also facilitates technology transfer and promotes joint ventures, contributing to Vietnam’s industrial development and modernization efforts. Beyond ASEAN-centric agreements, Vietnam participates in the Comprehensive Economic Partnership for East Asia (CEPEA), an initiative aimed at broader regional economic integration among East Asian countries. CEPEA seeks to harmonize and deepen economic cooperation by encompassing trade liberalization, investment facilitation, and regulatory convergence. Vietnam’s involvement in CEPEA reflects its strategic commitment to enhancing connectivity and economic collaboration across the East Asian region, thereby positioning itself as an integral player in the evolving regional economic architecture. Vietnam is also a party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral trade agreement among Pacific Rim countries. The CPTPP, which evolved from the original Trans-Pacific Partnership (TPP) after the withdrawal of the United States, aims to promote trade liberalization, investment, and economic integration among its members. Vietnam’s participation in the CPTPP has provided it with preferential access to multiple markets, reduced tariffs on a wide array of goods, and established high standards for intellectual property, labor rights, and environmental protection. This agreement has been pivotal in enhancing Vietnam’s global trade profile and attracting foreign direct investment. On 29 May 2015, Vietnam signed a Free Trade Agreement with the Eurasian Economic Union (EAEU), a regional economic bloc that includes Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan. This FTA enhances trade cooperation between Vietnam and the EAEU member states by reducing tariffs and non-tariff barriers, facilitating market access, and promoting investment flows. The agreement reflects Vietnam’s strategy to diversify its trade partnerships beyond traditional markets, tapping into new opportunities in Eurasia and strengthening economic ties with Russia and its neighboring countries. The European Union-Vietnam Free Trade Agreement (EVFTA) came into effect on 1 August 2020, marking a significant milestone in trade relations between Vietnam and the EU. The EVFTA eliminates nearly all tariffs between the two parties, covering goods, services, and investment, and also includes provisions on sustainable development, intellectual property rights, and dispute resolution. For Vietnam, the EVFTA has substantially boosted trade with EU member countries, providing greater market access for Vietnamese exports such as textiles, footwear, and agricultural products. The agreement also encourages EU investment in Vietnam, fostering technology transfer and contributing to the country’s economic modernization. Vietnam’s bilateral trade relations with Chile are governed by the Vietnam-Chile Free Trade Agreement (VCFTA), which has been effective since 1 January 2014. The VCFTA facilitates trade by eliminating tariffs on a wide range of goods and services, promoting investment, and enhancing economic cooperation between the two countries. This agreement has helped Vietnam expand its presence in Latin America, providing preferential access to the Chilean market and encouraging bilateral trade diversification beyond its traditional partners. The Vietnam-Korea Free Trade Agreement (VKFTA), which came into force on 20 December 2015, has played a vital role in strengthening economic ties between Vietnam and South Korea. The VKFTA reduces tariffs on numerous products, enhances market access, and promotes cooperation in areas such as investment, services, and intellectual property. Given South Korea’s status as one of Vietnam’s largest foreign investors and trading partners, the VKFTA has been instrumental in deepening bilateral economic relations and supporting Vietnam’s export-driven growth model. Economic collaboration between Vietnam and Japan is further reinforced by the Japan-Vietnam Economic Partnership Agreement, which was implemented on 1 October 2009. This agreement promotes trade liberalization, investment facilitation, and cooperation in various sectors, including technology transfer and human resource development. The partnership has contributed to the expansion of Japanese investment in Vietnam, particularly in manufacturing and infrastructure, and has enhanced bilateral trade flows by providing preferential market access and reducing trade barriers. Following the United Kingdom’s departure from the European Union, the United Kingdom-Vietnam Free Trade Agreement became effective on 1 January 2021, ensuring the continuation of trade relations between the two countries post-Brexit. This agreement mirrors many of the provisions found in the EVFTA, maintaining tariff reductions, market access, and investment protections. It provides certainty and stability for businesses engaged in bilateral trade and investment, reinforcing Vietnam’s economic ties with the UK and supporting ongoing economic cooperation in a post-Brexit context.

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Over the course of the past three decades, Vietnam has strategically pursued an extensive network of trade agreements with numerous international partners, positioning itself as one of the foremost manufacturing hubs on the global stage. This deliberate engagement in multilateral and bilateral trade arrangements has facilitated the country’s transformation from a largely agrarian economy into a dynamic center for manufacturing and export-oriented industries. The foundation for this evolution was laid in 1995 when Vietnam officially became a member of the Association of Southeast Asian Nations (ASEAN), marking a pivotal step in its regional economic integration. ASEAN membership not only provided Vietnam with preferential access to regional markets but also signaled its commitment to economic liberalization and cooperation within Southeast Asia, fostering an environment conducive to foreign investment and trade expansion. Building on this momentum, Vietnam took a significant leap forward in 2000 by signing a landmark free trade agreement (FTA) with the United States, one of the world’s largest economies. This agreement served as a catalyst for enhancing bilateral trade relations between the two countries, facilitating increased exports from Vietnam to the U.S. market, particularly in textiles, footwear, electronics, and agricultural products. The FTA helped reduce tariffs and non-tariff barriers, thereby encouraging Vietnamese manufacturers to upgrade their production capabilities and adhere to international standards. This development was instrumental in integrating Vietnam more deeply into global supply chains and attracting foreign direct investment (FDI), which further accelerated industrial growth and export diversification. Vietnam’s commitment to global economic integration was further solidified in 2007 when it was admitted to the World Trade Organization (WTO). Membership in the WTO represented a milestone that underscored Vietnam’s adherence to international trade rules and norms, thereby enhancing its credibility and attractiveness as a trading partner. WTO accession required Vietnam to undertake significant domestic reforms, including tariff reductions, the elimination of trade-distorting subsidies, and the strengthening of intellectual property rights protections. These reforms not only improved the business environment but also opened up new opportunities for Vietnamese exporters and importers by ensuring more predictable and transparent trade policies. Following its WTO admission, Vietnam actively pursued additional bilateral trade agreements with key regional players such as other ASEAN member states, China, India, Japan, and South Korea. These agreements aimed to deepen economic ties, reduce trade barriers, and create a more integrated and competitive regional market. In parallel with these efforts, Vietnam played a proactive role in multilateral trade initiatives, notably collaborating with international partners to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP-11. This agreement emerged after the United States withdrew from the original Trans-Pacific Partnership (TPP), leaving eleven countries, including Vietnam, to move forward with a revised pact. The CPTPP seeks to promote economic cooperation, enhance regional connectivity, and stimulate sustainable economic growth among member countries by eliminating tariffs, standardizing regulations, and encouraging investment flows. For Vietnam, participation in the CPTPP represents an opportunity to diversify export markets, attract higher-quality foreign investment, and integrate more deeply into advanced global value chains. Economic analyses underscore the potential benefits of the CPTPP for Vietnam’s economy. According to estimates by the World Bank, the agreement is projected to increase Vietnam’s gross domestic product (GDP) by approximately 1.1% by the year 2030. This growth is expected to be accompanied by significant productivity gains as Vietnamese firms adopt more efficient production techniques, improve product quality, and expand into new markets. The CPTPP’s provisions on intellectual property, labor standards, and environmental protections also encourage sustainable development and innovation within Vietnam’s economy, positioning it for long-term competitiveness in an increasingly interconnected global marketplace. The cumulative effect of Vietnam’s trade liberalization policies has been a marked reduction in tariffs on both imports and exports, facilitating a more open and competitive trading environment. These lowered tariffs have enabled Vietnamese businesses to access a wider array of inputs at competitive prices, thereby enhancing their production capabilities and export competitiveness. Simultaneously, consumers in Vietnam have benefited from greater product variety and lower prices. The positive impact of these reforms is reflected in Vietnam’s improving trade balance. According to data from the Vietnam Customs Department, the country achieved a trade surplus of $2.8 billion during the first eight months of 2018, a notable indicator of the export sector’s strength and the country’s growing integration into global trade networks. Further advancing its trade liberalization agenda, Vietnam reached a historic milestone on June 30, 2019, when it signed a comprehensive Free Trade Agreement (FTA) and an Investment Protection Agreement with the European Union (EU) after a decade of complex negotiations. This agreement represents one of the most ambitious trade deals ever concluded by the EU with a developing country and covers a broad range of issues including tariff elimination, regulatory cooperation, intellectual property rights, sustainable development, and investment protections. The pact is expected to significantly enhance bilateral trade and investment flows between Vietnam and the EU, providing Vietnamese exporters with preferential access to one of the world’s largest consumer markets. Vietnam’s signing of the FTA with the EU positioned it as only the fourth Asian country to secure such an agreement with the bloc, following Japan, South Korea, and Singapore. This distinction highlights Vietnam’s rising prominence as a key economic partner in Asia and underscores the country’s successful efforts to align its trade policies with international standards. The agreement is anticipated to further integrate Vietnam into global value chains, stimulate economic modernization, and contribute to the country’s sustained economic growth and development. Through these comprehensive trade liberalization initiatives, Vietnam has effectively leveraged international partnerships to transform its economy, enhance competitiveness, and secure a more prominent role in the global trading system.

In 1986, the Vietnamese government enacted its first Law on Foreign Investment, marking a pivotal shift in the country’s economic policy and signaling a broader commitment to transitioning from a centrally planned economy to a more market-oriented system. This legislation permitted foreign companies to establish operations within Vietnam, a move that reflected the government’s recognition of the need to attract external capital, technology, and expertise to stimulate domestic growth and integration into the global economy. The law laid the groundwork for foreign direct investment (FDI) by providing legal frameworks and protections that encouraged international businesses to participate in Vietnam’s economic development. This policy shift was part of the broader Đổi Mới (Renovation) reforms initiated in the mid-1980s, which sought to liberalize the economy, reduce state control, and promote private enterprise. Between 1981 and 2005, Vietnam undertook a comprehensive overhaul of its intellectual property (IP) legal framework, gradually moving away from the Soviet-style collective ownership model that had previously dominated its approach to intellectual property rights. This transformation was driven by the recognition that modern IP protections were essential for fostering innovation, attracting foreign investment, and integrating into the global trading system. The earlier collective ownership model, which emphasized state or collective ownership over individual or corporate rights, was increasingly seen as incompatible with international standards and the needs of a market economy. Over this period, Vietnam systematically introduced laws and regulations that established clearer rights for creators, inventors, and businesses, aligning its IP system more closely with those of developed economies and international agreements. A significant milestone in Vietnam’s intellectual property reform came in 1997 with the signing of the Copyright Agreement with the United States. This bilateral agreement was primarily aimed at preventing Vietnam from becoming a hub for illegal copying and piracy, which had been a concern for international trading partners and foreign investors. By committing to stronger enforcement of copyright laws and adopting standards consistent with international norms, Vietnam sought to improve its reputation and credibility in the global marketplace. The agreement also facilitated Vietnam’s efforts to join the World Trade Organization (WTO) by demonstrating its willingness to adhere to international intellectual property standards, thereby fostering a more secure environment for foreign businesses and creative industries operating within the country. In parallel with reforms in foreign investment and intellectual property, Vietnam’s constitution and related legal frameworks underwent regular revisions to foster a more investor-friendly business environment. These legal amendments focused on reducing bureaucratic red tape, streamlining administrative procedures, and enhancing transparency to accelerate the inflow of foreign investment. The government recognized that cumbersome regulations and inefficient administrative processes were significant barriers to business development and sought to address these issues through legal reforms. By simplifying licensing procedures, improving contract enforcement mechanisms, and clarifying property rights, Vietnam aimed to create a more predictable and supportive environment for both domestic and foreign investors. These efforts were crucial in positioning the country as an attractive destination for international capital and in facilitating sustainable economic growth. Vietnam’s progress in reforming its business environment and enhancing competitiveness has been reflected in various international rankings over the past two decades. According to the World Economic Forum’s Global Competitiveness Report, Vietnam improved its global ranking from 77th place in 2006 to 55th place in 2017. This upward movement indicated significant advancements in the country’s economic infrastructure, macroeconomic stability, health and education systems, and market efficiency. The improved ranking underscored Vietnam’s success in creating a more dynamic and competitive economy capable of attracting investment, fostering innovation, and integrating into global value chains. The report highlighted the cumulative impact of policy reforms, infrastructure development, and institutional improvements that contributed to Vietnam’s enhanced global standing. Similarly, the World Bank’s Ease of Doing Business rankings mirrored Vietnam’s progress in creating a more conducive environment for business operations. From 2007 to 2017, Vietnam advanced from 104th place to 68th place, reflecting substantial improvements in regulatory practices and business facilitation. This advancement was attributed to reforms that simplified business registration, improved access to credit, enhanced contract enforcement, and streamlined tax procedures. The World Bank specifically praised Vietnam for its achievements in several key areas, including the enforcement of contracts, which reduced the time and cost associated with resolving commercial disputes. Additionally, increased access to credit through financial sector reforms enabled businesses to secure necessary financing more readily, supporting expansion and innovation. Infrastructure development was another critical factor contributing to Vietnam’s improved business climate. Investments in transportation networks, energy supply, and telecommunications enhanced the country’s logistical capabilities and reduced operational costs for businesses. The government’s efforts to facilitate trade through customs modernization and improved port facilities also played a significant role in boosting Vietnam’s attractiveness as a manufacturing and export hub. These improvements collectively contributed to a more efficient and predictable business environment, which encouraged both domestic entrepreneurship and foreign investment. The World Bank’s recognition of these reforms highlighted Vietnam’s commitment to continuous improvement and its strategic focus on creating a sustainable foundation for economic growth through regulatory and infrastructural enhancements.

By 2024, Vietnam’s population had reached an estimated 100 million, marking a substantial demographic increase from approximately 60 million in 1986. This rapid population growth over less than four decades reflected both natural population expansion and improvements in healthcare and living standards. Notably, more than half of the population was under the age of 35, indicating a youthful demographic profile that presented both opportunities and challenges for the country’s economic development. This youthful population implied a large and potentially dynamic labor force, which could be harnessed to drive economic growth if adequately educated and employed. Vietnam’s government recognized the critical importance of human capital in sustaining its export-led growth strategy and thus made substantial public investments in education. A central policy focus was on achieving universal and compulsory primary education, ensuring that all children had access to basic schooling. This emphasis on broad-based education was designed to elevate literacy rates and provide foundational skills across the population, thereby creating a more capable workforce. The expansion of educational infrastructure, teacher training programs, and curriculum development were integral components of this strategy, reflecting the government’s commitment to building human capital as a national priority. The focus on literacy and education was particularly crucial in developing a skilled mass workforce capable of supporting the rapid expansion of the manufacturing sector. As Vietnam transitioned from an agrarian economy to an increasingly industrialized one, the demand for workers with basic technical skills and the ability to adapt to factory environments grew significantly. Educational improvements enabled a larger segment of the population to participate effectively in manufacturing jobs, which required discipline, precision, and the ability to learn new processes. This investment in human capital helped to lay the groundwork for sustained industrial growth and competitiveness in international markets. In parallel with human capital development, Vietnam invested heavily in physical infrastructure to support economic modernization and provide affordable mass access to essential services. The government prioritized expanding the availability of electricity and clean water, recognizing these as fundamental prerequisites for both industrial activity and improved living standards. Additionally, Vietnam placed particular emphasis on developing its telecommunications infrastructure, especially internet connectivity, which was increasingly vital for integration into global supply chains and attracting foreign investment. These infrastructure investments reduced operational costs for businesses and improved the overall business environment, facilitating industrial expansion and economic diversification. The combined effects of investment in human capital and physical infrastructure were instrumental in Vietnam’s emergence as a major hub for foreign investment and manufacturing within Southeast Asia. By creating a large, educated workforce and ensuring reliable access to essential services, Vietnam positioned itself as an attractive destination for multinational corporations seeking to establish production facilities in a cost-effective and increasingly skilled environment. This strategic development fostered the growth of export-oriented industries and integrated Vietnam more deeply into global trade networks. Among the foreign investors attracted to Vietnam’s improving economic landscape were prominent Japanese and Korean electronics companies. Firms such as Samsung, LG, Olympus, and Pioneer established manufacturing factories in Vietnam, capitalizing on the country’s skilled labor pool and improved infrastructure. These companies produced a wide range of electronic goods, from consumer appliances to advanced components, contributing significantly to Vietnam’s industrial output and export revenues. Their presence also facilitated technology transfer and enhanced the capabilities of local suppliers and workers, further strengthening the country’s manufacturing base. In addition to East Asian electronics firms, numerous European and American apparel manufacturers set up textile operations in Vietnam. The garment and textile sector became a cornerstone of Vietnam’s industrial growth, driven by competitive labor costs and favorable trade agreements. These manufacturers contributed to employment generation, particularly for women, and helped Vietnam become one of the world’s leading exporters of clothing and textiles. The growth of this sector was supported by improvements in supply chain logistics and infrastructure, enabling efficient production and timely delivery to international markets. A landmark event underscoring Vietnam’s strategic importance to the global business community occurred in 2010 when Intel inaugurated a $1 billion semiconductor chip factory in the country. This investment represented one of the largest foreign direct investments in Vietnam’s history and signaled the country’s rising prominence in high-technology manufacturing. The semiconductor plant not only created thousands of skilled jobs but also positioned Vietnam as a key player in the global electronics supply chain. Intel’s decision to establish such a significant facility highlighted the success of Vietnam’s policies in building a conducive environment for advanced manufacturing and innovation.

Economic growth in Vietnam has demonstrated a trajectory broadly consistent with that of other developing countries, reflecting steady progress within a comparable global context. Over recent decades, Vietnam’s economic expansion has been characterized by sustained increases in gross domestic product (GDP), industrialization, and integration into global markets, aligning closely with the growth patterns observed in similar emerging economies. This steady advancement has been underpinned by structural reforms, increased foreign direct investment, and a gradual shift from an agrarian-based economy to one more diversified across manufacturing and services sectors. Despite challenges common to developing nations, such as infrastructure deficits and regional disparities, Vietnam’s economic performance has remained resilient and indicative of ongoing development. The World Economic Forum’s Inclusive Development Index has recognized Vietnam as one of the countries that have made notable strides toward becoming among the world’s most inclusive economies. This ranking reflects Vietnam’s efforts to ensure that economic gains are broadly shared across its population rather than concentrated in narrow segments. The Inclusive Development Index assesses countries based on criteria such as income growth, employment, and social inclusion, and Vietnam’s placement highlights its relative success in fostering equitable economic participation. This progress is particularly significant given the historical context of Vietnam’s transition from a centrally planned economy to a market-oriented system, which required balancing rapid growth with social equity. A key indicator of Vietnam’s inclusive economic development is the high participation rate of women in the labor force. According to data from the World Bank, the gender gap in labor force participation is within 10% of that of men, a disparity smaller than that found in many other countries. This relatively narrow gap underscores the important role women play in Vietnam’s economy, contributing across various sectors including agriculture, manufacturing, and services. The high female labor participation rate also reflects cultural and policy factors that have supported women’s engagement in economic activities, which in turn has positive implications for household income and national productivity. In 2015, empirical evidence showed that households led by women in Vietnam were generally not poorer than those led by men, signaling improved gender equity in economic conditions. This data point challenges common assumptions about female-headed households being disproportionately vulnerable to poverty and suggests that women’s economic empowerment has translated into tangible improvements in living standards. The relative economic parity between female- and male-headed households may be attributed to women’s active participation in the labor market, access to education, and government policies aimed at reducing gender disparities in income and employment opportunities. Vietnam has also achieved gender parity in basic education, with primary and secondary school enrollment rates for boys and girls being essentially equal. This achievement reflects the country’s sustained commitment to universal education and the removal of barriers that historically limited girls’ access to schooling. Ensuring equal enrollment rates at these foundational levels has been critical in laying the groundwork for broader gender equality in social and economic spheres. The emphasis on education as a fundamental right has been supported by legal frameworks, public awareness campaigns, and targeted interventions to reach marginalized populations. Beyond basic education, more girls than boys continue their studies into high school, indicating a positive trend in female educational attainment. This pattern suggests that not only are girls enrolling in school at rates comparable to boys, but they are also more likely to persist in their education through higher levels. The higher continuation rates among girls may be influenced by shifting societal attitudes, improved school infrastructure, and scholarship programs that encourage female students to pursue advanced education. This trend has significant implications for the future workforce, as higher educational attainment among women is closely linked to increased employment opportunities and economic participation. The Vietnamese government has actively engaged in reviewing and adjusting policies to promote more equitable growth across the country, as evidenced by the Development Strategy Action Plan 2011–2020. This strategic framework was designed to address regional disparities and foster balanced development by leveraging the unique advantages inherent to each region. The plan emphasizes the importance of inter-regional collaboration to create synergies that amplify development outcomes, recognizing that coordinated efforts can enhance infrastructure, human capital, and economic diversification. By tailoring development strategies to regional contexts, the government aims to ensure that growth is inclusive and benefits all segments of the population. In 2017, Vietnam, with assistance from the United Nations, initiated foundational work to achieve the Sustainable Development Goals (SDGs) through the formulation of the “One Strategic Plan” (OSP). This initiative represented a concerted effort to integrate global sustainable development objectives into national planning processes. The OSP was developed as a comprehensive framework to align Vietnam’s development priorities with the 17 SDGs adopted by the United Nations in 2015, signaling the country’s commitment to addressing economic, social, and environmental challenges in a holistic manner. The involvement of the United Nations provided technical support and facilitated stakeholder engagement to ensure the plan’s relevance and effectiveness. The One Strategic Plan integrates the SDGs with Vietnam’s existing Socio-Economic Development Strategy (2011-2020) and Socio-Economic Development Plan (2016-2020), serving as a guiding document for government agencies tasked with implementing the SDGs. This integration ensures coherence between international commitments and domestic policy frameworks, enabling a coordinated approach to sustainable development. By embedding the SDGs within established planning instruments, the OSP facilitates monitoring, evaluation, and resource allocation aligned with both national priorities and global goals. The plan underscores the importance of institutional capacity building and cross-sectoral collaboration to realize sustainable development outcomes. The OSP focuses on several key priority areas, including investing in people, enhancing climate resilience and environmental sustainability, fostering prosperity and partnership, and promoting justice and inclusive governance. Investment in people encompasses initiatives aimed at improving health, education, and social protection systems to build human capital. Climate resilience and environmental sustainability address the urgent need to mitigate and adapt to climate change impacts, safeguard natural resources, and promote green growth. The emphasis on prosperity and partnership seeks to stimulate economic development through innovation, private sector engagement, and international cooperation. Finally, the promotion of justice and inclusive governance aims to strengthen institutions, uphold the rule of law, and ensure that all citizens can participate in and benefit from development processes. In addition to the OSP, Vietnam has formulated a National Action Plan to review and update current growth policies to align with the SDGs, thereby ensuring policy coherence with sustainable development objectives. This action plan serves as a roadmap for revising existing strategies and programs to better reflect the integrated nature of economic, social, and environmental goals. By systematically assessing policy frameworks, the government aims to identify gaps, harmonize efforts across sectors, and optimize resource use to support sustainable and inclusive growth. The National Action Plan represents a proactive approach to embedding sustainability principles into the core of national development planning. The development of the National Action Plan involved extensive consultations with ministries, local governments, and various stakeholders to establish a unified framework for sustainable and inclusive growth. This participatory process ensured that diverse perspectives and expertise were incorporated, fostering broad ownership and commitment to the plan’s objectives. Engagement with local authorities enabled the tailoring of strategies to regional contexts, while input from civil society and the private sector contributed to more comprehensive and responsive policy design. The collaborative approach reflects Vietnam’s recognition that achieving sustainable development requires coordinated action across multiple levels of government and society.

In 2011, the Business Software Alliance (BSA), also known as The Software Alliance, conducted an assessment of the global IT industry’s competitiveness, placing Vietnam 53rd out of 66 countries on its IT Industry Competitiveness Index. This ranking reflected Vietnam’s relatively nascent stage in developing a robust information technology sector compared to more established economies. The index evaluated various factors including the availability of skilled labor, infrastructure, government policies, and the overall business environment conducive to IT growth. Vietnam’s position indicated significant room for improvement, particularly in areas such as intellectual property protection, technological innovation, and investment in research and development, which were critical to enhancing its competitiveness in the global IT market. By 2020, Vietnam’s economic stature had grown substantially, as evidenced by data from the International Monetary Fund (IMF). According to the IMF’s World Economic Outlook, Vietnam’s Gross Domestic Product (GDP) based on Purchasing Power Parity (PPP) was ranked 23rd out of 190 countries worldwide. This ranking highlighted Vietnam’s emergence as a significant player in the global economy, driven by rapid industrialization, export-oriented growth, and a growing middle class. The PPP metric, which adjusts for differences in price levels across countries, provided a more accurate reflection of Vietnam’s economic size and living standards relative to other nations. This notable advancement underscored the country’s successful transition from a low-income to a lower-middle-income economy within a few decades, supported by comprehensive economic reforms and integration into global trade networks. In the realm of global competitiveness, the World Economic Forum’s 2019 Global Competitiveness Report placed Vietnam at the 67th position out of 141 countries. This ranking was indicative of Vietnam’s improving business environment, infrastructure, and macroeconomic stability, which collectively enhanced its attractiveness to investors and multinational corporations. The report assessed a wide range of factors including institutions, infrastructure, ICT adoption, macroeconomic environment, health, education, and innovation capability. Vietnam’s position reflected a balanced profile, where strengths such as a young and dynamic workforce and increasing digital connectivity were offset by challenges including regulatory inefficiencies and gaps in higher education quality. The report’s findings emphasized the need for continued reforms to sustain productivity growth and move towards a more innovation-driven economy. The World Bank’s 2018 Ease of Doing Business index further illustrated Vietnam’s business climate by ranking it 68th out of 190 countries. This index measured the regulatory environment’s conduciveness to starting and operating a business, covering aspects such as business registration, construction permits, access to credit, and protection of minority investors. Vietnam’s mid-range ranking demonstrated progress in simplifying procedures and reducing bureaucratic hurdles, which facilitated entrepreneurship and foreign direct investment. However, the ranking also pointed to persistent challenges, including complex administrative processes and inconsistent enforcement of regulations, which could deter some investors and entrepreneurs. The World Bank’s assessment served as a benchmark for policymakers aiming to improve the regulatory framework and enhance the overall ease of doing business in the country. In contrast to these positive developments, the Heritage Foundation and The Wall Street Journal’s 2019 Index of Economic Freedom painted a more cautious picture of Vietnam’s economic environment. The country was ranked 128th out of 180 countries and categorized as having a “mostly unfree” economy. This index evaluated economic freedom based on criteria such as property rights, government integrity, fiscal health, business freedom, labor freedom, and trade freedom. Vietnam’s low ranking was primarily attributed to significant government intervention in the economy, limited protection of property rights, and pervasive state-owned enterprises that dominated key sectors. Additionally, restrictions on labor markets and trade policies contributed to the constrained economic freedom. This assessment highlighted the structural challenges Vietnam faced in transitioning towards a more market-oriented economy with greater openness and regulatory transparency. Transparency International’s Corruption Perceptions Index in 2019 ranked Vietnam 96th out of 177 countries, reflecting the perceived level of public sector corruption within the country. This index aggregates expert assessments and opinion surveys to gauge how corrupt a country’s public sector is perceived to be by businesspeople and country experts. Vietnam’s ranking indicated a moderate level of perceived corruption, which posed risks to governance, investor confidence, and equitable economic development. Corruption in Vietnam was often linked to bureaucratic inefficiencies, lack of transparency in public procurement, and weak enforcement of anti-corruption laws. The government had undertaken various anti-corruption campaigns and institutional reforms to address these issues, but the persistence of corruption remained a significant obstacle to improving the business environment and achieving sustainable economic growth. Taken together, these international rankings and economic indicators provide a multifaceted view of Vietnam’s economic landscape. While the country has made remarkable strides in expanding its economic size and improving competitiveness, challenges related to economic freedom, regulatory quality, and corruption continue to affect its development trajectory. The interplay between these factors shapes Vietnam’s position in the global economy and informs policy priorities aimed at fostering a more dynamic, transparent, and inclusive economic environment.