Economic trends
After adopting a major plan for reforms (Doi Moi) in 1986, Vietnam had a high growth period, achieving an average of almost 8% from 1990 to 1997 and 6.5% from 1998 to 2003, which made it the world's second-fastest growing economy. From 2004 to 2007, annual GDP growth rose to over 8%, then slowed down to 6.2% in 2008. Vietnamese growth is carried by international trade and foreign investments, with exports accounting for more than two-thirds of the GDP.
The government launched reforms in all key sectors of the economy and anticipates partial privatization of public companies, however, their implementation remains gradual. A tax reform has also been undertaken in order to compensate for the fall in customs revenue, following the entry into the WTO and to make the country more attractive in the eyes of the investors. In order to deal with the global financial crisis and avoid a recession, the government has established several recovery plans aimed at improving the business climate, so as to promote production and exports, stimulate consumption and investements, increase social security and reduce poverty, introduce monetary policies and effective taxation.
The reforms have allowed for the improvement of the standard of living of the inhabitants. The GDP per capita went from USD 220 in 1994 to USD 1,024 in 2008. The percentage of the population living on less than a dollar per day has declined in a significant manner and is now lower than in China, India or the Philippines. However, the urban unemployment rate has risen in recent years and under-employement is estimated at 25% - 35%, a figure which remains considerable.
Main branches of industry
The declining agricultural sector is dominated by cultivation and plantations (rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea), and aquaculture. However, it is the sector that employs the biggest part of the population.
Industry is the main driver of the Vietnames economy. The sector is still dominated by big public groups. The country's main industries are textile, food industry, furniture industry, plastics and paper industries. The energy sector has been growing rapidly for several years (coal, hydrocarbons, electricity, cement, steel and the naval industry). Though it is the "new commer" in the oil industry, today Vietnam is the third biggest Southeast Asian producer. The country is also basing itself on high added value industries such as cars, electronic and computer science (software).
The services sector is carried by tourism and telecommunications.
International trade
Vietnam is one of the Asian economies most open to international trade, which represents almost 160% of the GDP (Exports of goods and services account for 70% of GDP and imports 90%), more than twice the Chinese rate and more than 4 times the Indian rate. Vietnam has demonstrated its strong commitment to trade liberalization in recent years. It has joined the WTO and signed Free Trade Agreements (FTAs) with ASEAN countries and the USA. Vietnam also has a cooperation agreement with the EU.
Vietnamese trade is characterized by a strong geographic inequality, the country shows a trade surplus with western countries and a growing deficit with its Asian neighbors. Exports are mainly made up of textiles, clothing and shoes, and brut oil, whereas imports are mainly made up of tool machinery, refined oil and steel.
The main export customers of Vietnam are the USA, Japan, EU, Australia and China. For imports, the country's main partners are China, Singapore, Japan, South Korea and Thailand.
The global economic crisis affected Vietnam's foreign trade. Exports dropped by 14% in relation to 2008, and import by 28%, the trade deficit is at USD 500 million.
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