1. The country out of economic crisis, year-on-year rapid economic growth rate maintained

Implementing renovation guidelines according to the model of a socialist-oriented market economy, Vietnam fulfilled or surpassed the State plan set for the 1991-1995 period. In 1995, the country escaped from economic crisis, creating necessary opportunities for it to shift to a new development period - a period of national industrialisation and modernisation.

From 1996-2005, the national economy secured high and consecutive growth rates with an annual GDP of 7.5 percent. In 2005, Vietnam reached an economic growth rate of 8.4 percent with per capital income of US$640.

The agriculture sector maintained comprehensive development with relatively high growth. The production values of the agriculture-forestry-fishery sector reached an average growth rate of 5.5 percent/year while food security has been ensured. From a country facing hunger, which had to import from 500,000-1 million tonnes of food a year, Vietnam now has become the world’s second largest rice exporter.

In 2005, Vietnam ranked second in the world in terms of rice, coffee and cashew-nut exports and came fourth in rubber exports.

The industry-construction sector has made great strides in renewing its production structure, increasing the quality of products and competitiveness. Industrial production value soared by 15 percent per year and added value reached 10 percent/year. A number of industrial products were able to compete on the domestic and international markets.

The service sector has gained new developments by expanding its scale and markets, attracting a variety of different economic sectors. The production value of the service sector rose by 7.5 percent/year while its added values stood at 7 percent/ year. In 2005, the sector’s added value reached 8.5 percent, higher the GDP grow rate of 8.4 percent.

2. Positive changes in economic restructuring towards industrialisation and mondernisation

The agriculture proportion of GDP has gradually reduced, from 46.3 percent in 1998 to 20.9 percent in 2005. The effective shifting of plant and livestock breeding has generated high economic efficiency and products with high export values.

In the five-year target from 2001-2005, the production values of the agriculture - forestry- fishery sectors increased by 5.5 percent per year and its added value was 3.89 percent per year.

The industrial-construction proportion has experienced rapid and consecutive increases, from 21.6 percent in 1998 to 41 percent in 2005. The country has so far exploited nearly 20 million tonnes of crude oil. The manufacturing industry accounts for 80 percent of the industrial production value. Industry and construction have strongly developed by applying advanced technology in production, thus securing its foothold in major markets. In the five-year plan, industry-construction production value soared by 15.9 percent/year and its added value reached 10.2 percent/year.

The service sector’s proportion of GDP increased from 33.1 percent in 1998 to 38.1 percent in 2005. The more diverse development of the service sector has better met production requirements and improved people’s lives. The service sector, including finance-banking, post and telecommunication and legal consultancy, has obtained positive developments.

Labour restructuring has made drastic changes along with the economic restructuring process, thus reducing the number of agricultural labourers while increasing the number of labourers in the industry-construction and service sectors.

The number of labourers in the agriculture-forestry-fishery sector fell from 73.02 percent in 1990 to 56.8 percent in 2000. Meanwhile, the labour figure in the industry-construction sector grew from 12.1 percent in 2000 to 17.9 percent in 2005 and from 19.7 percent to 25.3 percent in the service sector, respectively.

3. Development of multil-sector economy effectively implemented, potential of economic sectors better tapped

The renewed State economy has helped raise the quality and efficiency of key economic sectors, abolished subsidies and improved rights and a sense of responsibility among businesses. Restructured and equitised State-owned enterprise contributions made up 38.5 percent of GDP and 50 percent of the State budget in 2005.

The effective and rapid development of the private economic sector has contributed significantly to creating more new jobs and boosting labour and social restructuring.

In 2005, the sector’s contributions accounted for 46 percent of GDP, of which, the co-perative economy contributed approximately 7 percent to GDP.

The private economic sector has effectively mobilised all resources while playing a pivotal role in pushing up national economic development. In 2005, the sector contributed around 38 percent to the whole country’s GDP.

The foreign-invested sector has experienced relatively high growth, becoming an important component of the national economy and serving as a bridge for the transfer of technology and international exchanges.

In 2005, the sector’s contributions accounted for 15.5 percent of GDP, more than 7.5 percent of State budget collection, 17.1 percent of the total social investment capital, more than 23 percent of export turnover (excluding oil), and 35 percent of industrial production value. It also attracted around 500,000 direct workers and millions of indirect workers.

4. Socialist-oriented market economy

After 20 years of renewal, the legal system, policies and operation mechanism of the socialist-oriented market economy have been developed comprehensively. Enterprises’ operations in the multi-sector economy and State management apparatus have been renovated. The State gradually separated its economic management function from enterprises’ trading function, and shifted from direct to indirect interference through the legal system, plans, procedures, policies and macro-regulation tools.

The commodity market has been developing comprehensively with high growth. Service, labour, science and technology, and real estate markets are being formed.

The macro-balance of the economy has basically been remained, creating necessary conditions for economic development. Financial strength has been fostered, annual budget collection growth stands at over 18 percent, and expenses for investment development accounted for 30 percent of the total budget expense. Money and commodity relations have been basically reasonable, ensuring enough necessary goods for production and daily life. The average consumption price index is lower than GDP growth rate.

5. Regional and international economic integration

After active participation in regional and international integration, economic relations between Vietnam and other countries have been expanded. Vietnam joined the Association of Southeast Asian Nations (ASEAN) and implemented agreements on ASEAN Free Trade Area (AFTA) and the Vietnam-US Bilateral Trade Agreement, and is currently negotiating to join the World Trade Organisation (WTO). By 2005, Vietnam had established trade relations with 221 countries and territories and signed bilateral trade agreements with 90 countries, creating a new development step in external trade relations.

Export-imports increased rapidly in both scale and speed. The total export value in years before the renewal process reached around US$1 billion a year, but now the annual value is US$25 billion, accounting for more than 50 percent of GDP. Noteworthy, service exports rose to 15.7 percent a year, making up 17.5 percent of the total export value. Export markets have also been expanded to strong economies.

The annual import value increased by around 19 percent in the 2000-2005 period and import surplus hit US$4 billion a year, accounting for 17.5 percent of the total export value. Import surplus still stands high, however, it can be controlled and is on a downward trend. The import-export structure is thus changing positively. The proportion of heavy industrial and mineral products reduced from 37.2 percent in 2000 to 36 percent in 2005. Agricultural, forestry and seafood fell from 29 percent to 24 percent while light industrial and handicraft products increased from 38.8 percent to 39.8 percent.

6. Combining economic development with resolving social issues

An impressive achievement of the renewal process is combining economic with cultural development, implementing social progress and equality and providing opportunities for all economic sectors and local people to develop.

First of all, job generation and poverty reduction have gained significant achievements, fulfilling the Millennium Development Goals of the United Nations. In the 2000-2005 period, 7.5 million jobs were generated. The unemployment rate in urban areas decreased to 5.3 percent in 2005.

Average income per capita increased from US$200 in 1990 to US$640 in 2005, and the poverty rate reduced from 30 percent in 1992 to under 7 percent in 2005, according to the national standard.

Public healthcare has been paid due attention and made significant progress. The human development index rose from 0.498 in 1990 to 0.688 in 2002 and Vietnam ranked 112^th out of 177 surveyed countries in 2005. The medical network has been reinforced and developed, social disease prevention has been strengthened and life expectancy increased from 68 years old in 1999 to 71.3 years old in 2005.

Source: vov.org.vn