In the early and mid Doi Moi years, with the country’s post-transition starting point favored labor intensive activities, Viet Nam performed well on economic growth. Economic expansion was inclusive, with benefits widely distributed and opportunities shared having brought significant social transformation, evident in the shrinking population shares of the poor and near poor, and rapid expansion of the lower middle class. Yet in recent years, Viet Nam’s strong performance has waned, signaling that these once powerful reforms – engines of growth – have now run out of steam.
The challenge for Low Middle Income Viet Nam is the need to transition from its current growth model which relies too heavily on cheap labor and the exploitation of natural resources, to one based on a more rapid productivity growth, by way of improving technical and allocative efficiency, and upgrading technological and innovation capabilities. These will have to take place in an increasingly globalizing and technology-driven world. Therefore, a new generation of policy and institutional reforms is needed to help Vietnam achieve its ambitions of becoming a modern and industrialized country in the foreseeable future.
Dr. Nguyen Thang Dr. Nguyen Thang, Director of the Center for Analysis and Forecasting, Vietnam Academy of Social Sciences (VASS), has led a number of research projects on trade, poverty and inclusive growth with major donors. He advises the Economic Committee of the National Assembly and several ministries, including a current IDRC project to advise on small enterprise development.
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