Vietnam Succeeds in Developing a Socialist-oriented Market Economy

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Friday, November 3rd, 2017
Da Nang City_1

[Da Nang, Vietnam] After 30 years of renovation, Vietnam has achieved many important achievements in socio-economic development, national defense - security and foreign affairs.

Its economy has maintained a relatively high growth rate with increased potential and scale of the economy. The people's life has been improved. Foreign activities, international integration are strengthened and expanded.

Amid a robust economic growth, Vietnam is now preparing for the 2017 APEC Economic Leaders’ Week on Nov. 6-11 in Da Nang to be chaired by Vietnam President Tran Dai Quang.

The following is the excerpt of an interview with Mr. Phuong, a senior official of the Vietnamese Ministry of Information and Communication.

Q: Would you comment on the recent economic boom in Vietnam?

A: In developing its economy, the Vietnam government has decided to abandon the centralized subsidy model, shifted to developing a socialist-oriented market economy, considered as a general economic model of the transitional period, with various forms of ownership, economic components, business organization and distribution.

Thanks to the right way of economic development and appropriate solutions, over 30 years of renovation, Vietnam has achieved many achievements in economic development, which is highly appreciated by the world.

The remarkable achievements of the Vietnam economy after 30 years of renovation are the high GDP growth associated with the economy restructured in the direction of industrialization and modernization.

In the first five years from 1986 to 1990, the average annual GDP growth rate was 4.4%. Agricultural production, especially food production had a new development. In 1989, Vietnam exported 1.42 million tons of rice, marking the transition from self-sufficiency to commodity production associated with rice exports.

Q: Would you explain the situation of Vietnam's industrial sectors?

Industrial production has a new development. Some key sectors of the economy have grown quite well. Trade and service recovered and grew quite well.

Economic structure shifted towards progress. In the 1990s, the economy began to accelerate. In the period of 1991-1995, the average GDP increased by 8.2% per year, doubling that of the previous five years.

During the next five years 1996-2000, despite the impact of the regional financial crisis, Vietnam’s GDP still maintained at 7.6% average growth per year.

In the period of 2001-2005, GDP increased by 7.3% on average. In the period of 2006-2010, GDP growth rate was 6.3% per annum due to global economic recession.

In the coming years, due to the impact of the global financial crisis in 2008 and the public debt crisis in 2010, Vietnam's GDP growth rate in the 2011-2015 period has slowed down, yet still reached 5.9% per annum, which is high compared to other countries in the region and the world.

Together with the fast growth rate, the economic structure of Vietnam has also changed positively. Before, agriculture, forestry and fishery dominated the economy; however, by 2015 the proportion of industry and services in the GDP was 83%.
The size of the economy has grown rapidly.

In 2003, after 16 years of renovation, the size of the economy was about 40 billion USD, by 2015, the size of the economy was about 204 billion USD. Production forces have improved in both quantity and quality.

The quality of growth and the level of production technology have been improved. Contribution of TFP productivity growth to growth in the period 2001-2005 reached 21.4%, in the period 2006-2010 reached 17.2%, in the period 2011-2015 reached 28.94%. Macroeconomic stability was basically maintained, inflation was under control.

Ministers responsible for trade meeting



Q: Social security and life of the people are very important factors, along with the economic development. What is the Vietnam's policy on the matter?

A: In the renewal years, Vietnam has paid great attention to the implementation of social policies for the well-being of the people, as a sign of the superiority and nature of the socialist regime and minimization of the downside of the market mechanism.

Social policies ensure and improve the physical well-being of all members of society in terms of food, accommodation, travel, labor, study, rest, medical treatment and physical improvement. Every year, an average of 1.5 to 1.6 million new jobs is created, reducing the unemployment rate.

Through 30 years of renovation, Vietnam’s consistent policy is sustainable poverty reduction coupled with the promotion of legitimate enrichment and to attach importance to poverty reduction policies for poor districts, giving priority to the ethnic minorities.

The rate of poor households in the whole country decreased by 1.5-2% per year. In 2011, the rate of poor households in the country decreased from 60% before the renovation to 9.5%, in 2013 to 7.5%, in 2015 to less than 5%.

Vietnam's achievements in poverty reduction have been recognized and appreciated by the United Nations. Average income per capita increased from 471 USD in 2003 to 2,228 USD in 2015.

People’s health care has made great progress; the system of medical facilities has been formed widely throughout the country; Number of doctors, the number of beds per ten thousand people increased rapidly.

The medical service system has been increasingly improved. Preferential policies for people with meritorious services to the revolution have been paid special attention to ensure that people's living standards are equal to or higher than the average living standards of the population in their localities.

Our country has built up and perfected a diversified, expanding and effective social security system; strengthened the insurance system such as social insurance, health insurance, unemployment insurance, occupational accident insurance and occupational disease insurance; encouraged and created favorable conditions for the laborers to join different types of insurance.

Q: The APEC Year 2017 is a significant opportunity to highlight the spirit and intellectual capacity of Vietnam's foreign affairs. Would you comment on Vietnam's foreign policy?

A: Vietnam has consistently implemented the foreign policy of independence, sovereignty, peace, cooperation and development; multilateralization, diversification of relations, active and positive integration into the world; to be a friend, a reliable partner, and a responsible member of the international community for the benefit of the nation and the people, actively contributing to the struggle for peace, independence, nationalism, democracy and social progress in the world.

Thanks to active and positive international integration with appropriate policies, Vietnam has brought into full play its internal strength, taking advantage of external forces, absorbing achievements in science, technology, intellectual economy, and business international experience, civilization of humanity ... to develop and modernize the production force and build the country.

In the years of renewal, the Vietnam government has adopted a number of policies, measures to enhance and expand international cooperation, bilateral and multilateral relations such as ASEAN and APEC. , ASEM, WTO, European Union, TPP ... strongly attracted foreign direct investment (FDI), promoted trade and investment, expanded import and export market, international cooperation, capital resources, science and technology, advanced management skills and experience.

To date, Vietnam has established diplomatic relations with 170 countries (15 of which Vietnam has established strategic partnerships with), trade relations with 230 countries and territories, signing more than 90 trade agreements bilateral agreements, nearly 60 agreements to encourage and protect investment.

Vietnam's international integration has been further deepened; its status and international prestige have been raised. To date, 59 countries have recognized Vietnam's economy as a market economy, including its major trading partners.

Q: Would you introduce the Vietnam's preparation for the APEC Year 2017 and the meaning of its hosting of the international event?

A: Vietnam has become an important link in an extensive economic connectivity network of 59 partners, including APEC members. Vietnam is ready to host the Asia-Pacific Economic Cooperation (APEC) Year 2017 with all preparations being
basically completed on schedule.

After nearly two decades of joining the APEC Forum, this is the second time Vietnam has been assigned to host the event, reflecting the international community’s trust in the country.

The hosting of the APEC Year 2017 creates a great opportunity for Vietnam to strengthen relations with regional partners and enhance its role and position in the international arena.

Vietnam embarked on the preparations for the event three years ago. The National Committee on APEC 2017 was established in July 2015 under the chair of Deputy Prime Minister, Foreign Minister Pham Binh Minh and the involvement of 24 ministries, agencies and localities.

The biggest obstacle for APEC members in general and Vietnam in particular is how to maintain the APEC Forum’s role as a leading economic connectivity and cooperation mechanism in the region to fuel the growth and prosperity in the Asia-Pacific.

The other challenge is to accelerate trade and investment liberalization in the region, including the realization of the “Bogor Goals” by 2020 as scheduled, in the context that protectionism is emerging in a number of economies.

Another defiance is to increase the forum’s contributions to the settlement of global challenges such as generating jobs, narrowing inequality, coping with climate change, preventing terrorism, ensuring food security, and addressing aging population and migration crisis.

However, the above-said situation will also open up new opportunities for cooperation among the APEC member economies.

With the principles of win-win and voluntary cooperation, the APEC Forum is pioneering in the liberalization of trade and investment, which supports small-and medium-sized enterprises to increase their competitiveness and join global supply value chains and digital economy.

Vietnam is one of the leading APEC member economies in terms of economic growth and regional connectivity. Despite the global economic downturn in the first eight months of 2016, Vietnam was still among a few APEC economies which
successfully maintained the export growth.

The Vietnamese government is comprehensively and synchronously speeding up reform and economic restructuring in combination with changing the growth model.

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