Let’s travel into the past for now, when Vietnam was still isolated from the world. When there wasn’t electricity or any cars in cities. In the mid-80’s, especially in 1986. War with the US had ended only a decade ago, and the country was still bandaging its wounds. It was at this moment that the government decided to trigger a shift of paramount importance for the decades to come.
In an article in September 2018, Peter Vanham from the World Economic Forum described Vietnam’s economic evolution over the past 30 years. He titled it: “The story of Viet Nam’s economic miracle”, outlining the result of what happened to Vietnam’s economy over three decades as incredible, extraordinary, and a miracle. At first, the evolution of the country’s economy seems very difficult to believe as regards figures and what experts foresee. According to Dr. Frank Jurgen, Chairman of the Horasis in an interview with VietNamNet “Vietnam’s economy has grown at an average of about 7 percent per annum over the past three decades, among the quickest globally”.
And it is going to continue. In a recent study for the DBS bank, Economist’s Irvin Seah for DBS forecasts that Vietnam can maintain the same growth pace and that if so, the country could have a bigger economy than Singapore in ten years. All that news might make one think that Vietnam has been touched by a celestial force since the 80’s.
But Vietnam ‘s economic development has never been due to any kind of chance, luck or fate. What’s incredible about the country is not how its economy evolved, but what lay beyond this. In the same article, Peter Vanham gives reasons why the “miracle” was made possible by quoting analysts from the World Bank and the think tank Brookings: In short, trade liberalization, domestic reforms and heavy investment in human and physical capital. Those three reasons highlight the picture better.
Let’s get back to 1986. The government implemented the Doi Moi economic reforms that would turn Vietnam to what is now called a socialist-oriented market economy. With financial aid of the IMF, it allowed for state-owned enterprises to start operating on a commercial basis. In short, Vietnam was starting to open to the world economy, in its own way.
And the most incredible thing was that, the population completely accepted and followed the shift. More, they put all the energy they had on it. In the first ten years from 1986, Vietnamese people opened more than 30 000 businesses, helping the country to grow rapidly.
The economic development of Vietnam might be incredible at first, but after delving deeper into it, it appears more impressive. What’s most incredible about the country is all the effort that has been put by the government and the population to transform it into what it is today, only a few years after having suffered from one of the most traumatic conflicts in modern history. More than that, Vietnam is willing to continue growing at this pace.