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Walking around in Ha Noi, Viet Nam’s capital, you can feel boundless energy everywhere. People whiz by on scooters, buy and sell everything from phones to food in the countless small shops, và run to & fro to lớn get to lớn school or work. Viet nam giới is young, growing, and anything feels possible.
It wasn’t always thus. A mere 30 years ago, the country was one of the poorest in the world. How did this southeast Asian nation grow to become a middle-income country?
When the 20-year Viet phái mạnh War ended in 1975, Viet Nam’s economy was one of the poorest in the world, and growth under the government’s subsequent five-year central plans was anaemic. By the mid-1980s, per capita GDP was stuck between $200 and $300. But then something changed. In 1986, the government introduced “Đổi Mới”, a series of economic and political reforms, and steered the country lớn becoming a “socialist-oriented market economy”.
Today, Viet nam giới is one of the stars of the emerging markets universe. Its economic growth of 6-7% rivals China, và it exports are worth as much as the total value of its GDP. Anything from Nike sportswear to Samsung smartphones are manufactured in this ASEAN nation. Such is the success of the country, Sheng Lu, an assistant professor at the University of Delaware told the Financial Times that there are few spare workers or production facilities left.
So how did this growth miracle happen? According khổng lồ analysts from the World ngân hàng and the think tank Brookings, Viet Nam’s economic rise can be explained by three main factors: “First, it has embraced trade liberalization with gusto. Second, it has complemented external liberalization with domestic reforms through deregulation and lowering the cost of doing business. Finally, Viet phái mạnh has invested heavily in human và physical capital, predominantly through public investments.”
Regarding the first factor, the analysts point to lớn the various không tính phí trade agreements Viet phái nam has signed in the last đôi mươi years. In 1995, Viet phái nam joined the ASEAN không tính phí trade area. In 2000, it signed a không tính tiền trade agreement with the US, và in 2007 it joined the World Trade Organisation. Since then, further ASEAN agreements followed with China, India, nhật bản and Korea, & just this year, the amended Trans-Pacific Partnership went into effect – albeit without the US.
The cumulative effect of all these agreements was khổng lồ gradually lower the tariffs imposed on both imports & exports to and from Viet Nam, as shown in the graph below.