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Special programs are said to exist for government civil servants and armed forces personnel.
Special programs are said to exist for government civil servants and armed forces personnel.
== ECONOMY ==
== ECONOMY ==
'''Overview:''' Beginning in the 1980s, dire economic conditions forced the government to relax
Overview: Beginning in the 1980s, dire economic conditions forced the government to relax
restrictions on private enterprise and sharply cut back on labor camp prisoners, many of them
restrictions on private enterprise and sharply cut back on labor camp prisoners, many of them
entrepreneurs. In 1986 Vietnam launched a political and economic renewal campaign (Doi Moi)
entrepreneurs. In 1986 Vietnam launched a political and economic renewal campaign (Doi Moi)
agricultural goods, and enabled farmers to sell their goods in the marketplace. It encouraged the
agricultural goods, and enabled farmers to sell their goods in the marketplace. It encouraged the
establishment of private businesses and foreign investment, including foreign-owned enterprises.
establishment of private businesses and foreign investment, including foreign-owned enterprises.
By the late 1990s, the success of the business and agricultural reforms ushered in under Doi Moi
By the late 1990s, the success of the business and agricultural reforms ushered in under Doi Moi
remained in certain rural areas, particularly the northwest, north-central coast, and central
remained in certain rural areas, particularly the northwest, north-central coast, and central
highlands.
highlands.
In 2001 the Vietnamese Communist Party (VCP) approved a 10-year economic plan that
In 2001 the Vietnamese Communist Party (VCP) approved a 10-year economic plan that
sector’s contribution was expanding more rapidly than the public sector’s (18.7 percent versus
sector’s contribution was expanding more rapidly than the public sector’s (18.7 percent versus
12.4 percent growth from 2002 to 2003).
12.4 percent growth from 2002 to 2003).
Despite these signs of progress, the World Economic Forum’s 2005 Global Competitiveness
Despite these signs of progress, the World Economic Forum’s 2005 Global Competitiveness
markets, and labor and financial market reforms. State-owned banks that are poorly managed and
markets, and labor and financial market reforms. State-owned banks that are poorly managed and
suffer from non-performing loans still dominate the financial sector.
suffer from non-performing loans still dominate the financial sector.
Although Vietnam’s economy, which continues to expand at an annual rate in excess of 7
Although Vietnam’s economy, which continues to expand at an annual rate in excess of 7
transparency are keys to gaining full membership in the World Trade Organization (WTO), as
transparency are keys to gaining full membership in the World Trade Organization (WTO), as
hoped by mid-2006. The government plans to reform the state-owned sector by partially
hoped by mid-2006. The government plans to reform the state-owned sector by partially
privatizing thousands of state-owned enterprises, including all five state-owned commercial
privatizing thousands of state-owned enterprises, including all five state-owned commercial
banks.
banks.
Gross Domestic Product (GDP): In 2004 Vietnam’s GDP was US$45.2 billion. Per capita
'''Gross Domestic Product (GDP):''' In 2004 Vietnam’s GDP was US$45.2 billion. Per capita
gross national income was US$550. However, based on purchasing power parity (buying power
gross national income was US$550. However, based on purchasing power parity (buying power
for a basket of goods without regard for market exchange rates), Vietnam’s per capita GDP was
for a basket of goods without regard for market exchange rates), Vietnam’s per capita GDP was
times as many workers as the state-owned sector; and foreign-owned, 35 percent.
times as many workers as the state-owned sector; and foreign-owned, 35 percent.
Government Budget: In November 2003, Vietnam’s National Assembly approved a total state
'''Government Budget:''' In November 2003, Vietnam’s National Assembly approved a total state
budget of about US$12 billion for 2004, corresponding to about 26.5 percent of estimated gross
budget of about US$12 billion for 2004, corresponding to about 26.5 percent of estimated gross
domestic product (GDP). The government’s budget deficit, currently targeted not to exceed 5
domestic product (GDP). The government’s budget deficit, currently targeted not to exceed 5
percent, is rising but remains under control in the view of independent observers.
percent, is rising but remains under control in the view of independent observers.
Inflation: In 2004 inflation was 9.5 percent, higher than the 3.4 percent rate measured in 2000
'''Inflation:''' In 2004 inflation was 9.5 percent, higher than the 3.4 percent rate measured in 2000
but down significantly from 160 percent in 1988. The long-term decline reflects the beneficial
but down significantly from 160 percent in 1988. The long-term decline reflects the beneficial
effect of fiscal and monetary reforms aimed at stabilizing the economy.
effect of fiscal and monetary reforms aimed at stabilizing the economy.
Agriculture, Forestry, and Fishing: In 2004 agriculture and forestry accounted for 21.8 percent
Agriculture, Forestry, and Fishing: In 2004 agriculture and forestry accounted for 21.8 percent
state monopoly on rice exports transformed the country into the world’s second or third largest
state monopoly on rice exports transformed the country into the world’s second or third largest
rice exporter. Other cash crops are coffee, cotton, peanuts, rubber, sugarcane, and tea.
rice exporter. Other cash crops are coffee, cotton, peanuts, rubber, sugarcane, and tea.
In 2003 Vietnam produced an estimated 30.7 million cubic meters of roundwood. Production of
In 2003 Vietnam produced an estimated 30.7 million cubic meters of roundwood. Production of
timber products except wooden artifacts. During the 1990s, Vietnam began to reclaim land for
timber products except wooden artifacts. During the 1990s, Vietnam began to reclaim land for
forests with a tree-planting program.
forests with a tree-planting program.
Vietnam’s fishing industry, which has abundant resources given the country’s long coastline and
Vietnam’s fishing industry, which has abundant resources given the country’s long coastline and
seafood industry began to focus on domestic demand to compensate for declining exports.
seafood industry began to focus on domestic demand to compensate for declining exports.
'''Mining and Minerals:''' In 2003 mining and quarrying accounted for a 9.4 percent share of gross
Mining and Minerals: In 2003 mining and quarrying accounted for a 9.4 percent share of gross
domestic product (GDP); the sector employed 0.7 percent of the workforce. Petroleum and coal
domestic product (GDP); the sector employed 0.7 percent of the workforce. Petroleum and coal
are the main mineral exports. Also mined are antimony, bauxite, chromium, gold, iron, natural
are the main mineral exports. Also mined are antimony, bauxite, chromium, gold, iron, natural
phosphates, tin, and zinc.
phosphates, tin, and zinc.
Industry and Manufacturing: Although industry contributed 40.1 percent of gross domestic
'''Industry and Manufacturing:''' Although industry contributed 40.1 percent of gross domestic
product (GDP) in 2004, it employed only 12.9 percent of the workforce. In 2000, 22.4 percent of
product (GDP) in 2004, it employed only 12.9 percent of the workforce. In 2000, 22.4 percent of
industrial production was attributable to non-state activities. During 1994–2004, industrial GDP
industrial production was attributable to non-state activities. During 1994–2004, industrial GDP
growth. Almost a third of manufacturing and retail activity is concentrated in Ho Chi Minh City.
growth. Almost a third of manufacturing and retail activity is concentrated in Ho Chi Minh City.
Energy: Petroleum is the main source of commercial energy, followed by coal, which
'''Energy:''' Petroleum is the main source of commercial energy, followed by coal, which
contributes about 25 percent of the country’s energy (excluding biomass). Vietnam’s oil reserves
contributes about 25 percent of the country’s energy (excluding biomass). Vietnam’s oil reserves
are in the range of 270–500 million tons. The World Bank cites the lower bound of the range. Oil
are in the range of 270–500 million tons. The World Bank cites the lower bound of the range. Oil
brought ashore 2.26 billion cubic meters of natural gas. Hydroelectric power is another source of
brought ashore 2.26 billion cubic meters of natural gas. Hydroelectric power is another source of
energy. In 2004 Vietnam began to build a nuclear power plant with Russian assistance.
energy. In 2004 Vietnam began to build a nuclear power plant with Russian assistance.
Crude oil is Vietnam’s leading export, totaling 17 million tons in 2002; in 2004 crude oil
Crude oil is Vietnam’s leading export, totaling 17 million tons in 2002; in 2004 crude oil
2002.
2002.
Services: In 2004 services accounted for 38.2 percent of gross domestic product (GDP). During
'''Services:''' In 2004 services accounted for 38.2 percent of gross domestic product (GDP). During
1994–2004, GDP attributable to the services sector grew at an average annual rate of 6.0 percent.
1994–2004, GDP attributable to the services sector grew at an average annual rate of 6.0 percent.
Banking and Finance: Vietnam’s first stock exchange, known as the Ho Chi Minh City
'''Banking and Finance:''' Vietnam’s first stock exchange, known as the Ho Chi Minh City
Securities Trading Center, was established in July 2000. By the spring of 2005, the number of
Securities Trading Center, was established in July 2000. By the spring of 2005, the number of
companies listed on the exchange had reached 28, representing a total market capitalization of
companies listed on the exchange had reached 28, representing a total market capitalization of
announced that the limit on foreign share ownership would rise from 30 percent to 49 percent.
announced that the limit on foreign share ownership would rise from 30 percent to 49 percent.
Vietnam’s banks suffer from low public confidence, regulatory and managerial weakness, high
Vietnam’s banks suffer from low public confidence, regulatory and managerial weakness, high
levels of non-performing loans (NPL), non-compliance with the Basel capital standards, and the
levels of non-performing loans (NPL), non-compliance with the Basel capital standards, and the
(ATMs) have been installed, and about 350,000 debit cards are in circulation.
(ATMs) have been installed, and about 350,000 debit cards are in circulation.
Tourism: In 2004 Vietnam received 2.9 million international arrivals, up from 2.4 million the
'''Tourism:''' In 2004 Vietnam received 2.9 million international arrivals, up from 2.4 million the
previous year. The annual increase represented a strong rebound from a slight decline in 2003
previous year. The annual increase represented a strong rebound from a slight decline in 2003
attributable to the severe acute respiratory syndrome (SARS) epidemic in Asia. From 1999 to
attributable to the severe acute respiratory syndrome (SARS) epidemic in Asia. From 1999 to
industry, which brings needed foreign exchange into the country.
industry, which brings needed foreign exchange into the country.
Labor: In 2004 the unemployment rate in urban areas was 5.6 percent, down from 5.8 percent in
'''Labor:''' In 2004 the unemployment rate in urban areas was 5.6 percent, down from 5.8 percent in
2003 and 6.0 percent in 2002.
2003 and 6.0 percent in 2002.
Foreign Economic Relations: Vietnam is an observer to the World Trade Organization (WTO),
'''Foreign Economic Relations:''' Vietnam is an observer to the World Trade Organization (WTO),
but it aspires to full membership as early as mid-2006. Joining the WTO is vitally important
but it aspires to full membership as early as mid-2006. Joining the WTO is vitally important
because membership will free Vietnam from textile quotas enacted worldwide as part of the
because membership will free Vietnam from textile quotas enacted worldwide as part of the
Uruguay Round of trade negotiations in 1994. Partially as a result, Vietnam’s textile exports
Uruguay Round of trade negotiations in 1994. Partially as a result, Vietnam’s textile exports
stagnated in 2005.
stagnated in 2005.
Economic relations with the United States are improving but are not without challenges, even
Economic relations with the United States are improving but are not without challenges, even
non-humanitarian aid to Vietnam’s human rights record. Barriers to trade and intellectual
non-humanitarian aid to Vietnam’s human rights record. Barriers to trade and intellectual
property are also within the purview of bilateral discussions.
property are also within the purview of bilateral discussions.
Given neighboring China’s rapid economic ascendancy, Vietnam’s economic relationship with
Given neighboring China’s rapid economic ascendancy, Vietnam’s economic relationship with
China is growing rapidly, and in 2004 Vietnam imported more products from China than from
China is growing rapidly, and in 2004 Vietnam imported more products from China than from
any other nation. In November 2004, the Association of Southeast Asian Nations (ASEAN), of
any other nation. In November 2004, the Association of Southeast Asian Nations (ASEAN), of
which Vietnam is a member, and China announced plans to establish the world’s largest free-
which Vietnam is a member, and China announced plans to establish the world’s largest free-
trade area by 2010.
trade area by 2010.
Imports: In 2004 Vietnam’s merchandise imports were valued at US$31.5 billion, and growing
'''Imports:''' In 2004 Vietnam’s merchandise imports were valued at US$31.5 billion, and growing
rapidly. Vietnam’s principal imports were machinery (17.5 percent), refined petroleum (11.5
rapidly. Vietnam’s principal imports were machinery (17.5 percent), refined petroleum (11.5
percent), steel (8.3 percent), material for the textile industry (7.2 percent), and cloth (6.0
percent), steel (8.3 percent), material for the textile industry (7.2 percent), and cloth (6.0
(5.8 percent), and Malaysia (3.8 percent).
(5.8 percent), and Malaysia (3.8 percent).
Exports: In 2004 Vietnam’s merchandise exports were valued at US$26.5 billion, and, much
'''Exports:''' In 2004 Vietnam’s merchandise exports were valued at US$26.5 billion, and, much
like imports, were growing rapidly. Vietnam’s principal exports were crude oil (22.1 percent),
like imports, were growing rapidly. Vietnam’s principal exports were crude oil (22.1 percent),
textiles and garments (17.1 percent), footwear (10.5 percent), fisheries products (9.4 percent),
textiles and garments (17.1 percent), footwear (10.5 percent), fisheries products (9.4 percent),
percent), Germany (4.0 percent), and the United Kingdom (3.8 percent).
percent), Germany (4.0 percent), and the United Kingdom (3.8 percent).
Trade Balance: In 2004 Vietnam ran a merchandise trade deficit of US$5 billion, or 16 percent
'''Trade Balance:''' In 2004 Vietnam ran a merchandise trade deficit of US$5 billion, or 16 percent
of imports.
of imports.
Balance of Payments: The current account balance was negative US$1.4 billion in 2004.
'''Balance of Payments:''' The current account balance was negative US$1.4 billion in 2004.
Vietnam last registered a slightly positive current account balance in 2001.
Vietnam last registered a slightly positive current account balance in 2001.
External Debt: In 2004 external debt amounted to US$16.6 billion, or 37 percent of gross
'''External Debt:''' In 2004 external debt amounted to US$16.6 billion, or 37 percent of gross
domestic product (GDP).
domestic product (GDP).
Foreign Investment: From 1988 to December 2004, cumulative foreign direct investment (FDI)
'''Foreign Investment:''' From 1988 to December 2004, cumulative foreign direct investment (FDI)
commitments totaled US$46 billion. By December 2004, about 58 percent had been dispersed.
commitments totaled US$46 billion. By December 2004, about 58 percent had been dispersed.
About half of FDI has been directed at the two major cities (and environs) of Ho Chi Minh City
About half of FDI has been directed at the two major cities (and environs) of Ho Chi Minh City
2004 Corruption Perceptions Index.
2004 Corruption Perceptions Index.
Foreign Aid: The World Bank’s assistance program for Vietnam has three objectives: to support
'''Foreign Aid:''' The World Bank’s assistance program for Vietnam has three objectives: to support
Vietnam’s transition to a market economy, to enhance equitable and sustainable development,
Vietnam’s transition to a market economy, to enhance equitable and sustainable development,
and to promote good governance. From 1993 through 2004, Vietnam received pledges of US$29
and to promote good governance. From 1993 through 2004, Vietnam received pledges of US$29
billion of official development assistance (ODA), of which about US$14 billion, or 49 percent,
billion of official development assistance (ODA), of which about US$14 billion, or 49 percent,
actually has been disbursed. In 2004 international donors pledged ODA of US$2.25 billion, of
actually has been disbursed. In 2004 international donors pledged ODA of US$2.25 billion, of
which US$1.65 billion actually was disbursed. Three donors accounted for 80 percent of
which US$1.65 billion actually was disbursed. Three donors accounted for 80 percent of
period 2006–10, Vietnam hopes to receive US$14 billion–US$15 billion of ODA.
period 2006–10, Vietnam hopes to receive US$14 billion–US$15 billion of ODA.
Currency and Exchange Rate: As of December 2005, one U.S. dollar was equivalent to about
'''Currency and Exchange Rate:''' As of December 2005, one U.S. dollar was equivalent to about
15,913 Vietnamese dong (D). The relationship between the U.S. dollar and Vietnamese dong is
15,913 Vietnamese dong (D). The relationship between the U.S. dollar and Vietnamese dong is
important because the dong, although not freely convertible, is loosely pegged to the dollar
important because the dong, although not freely convertible, is loosely pegged to the dollar
exchange rate to adjust gradually to changing market conditions.
exchange rate to adjust gradually to changing market conditions.
'''Fiscal Year:''' Calendar year.
== TRANSPORTATION AND TELECOMMUNICATIONS ==
== TRANSPORTATION AND TELECOMMUNICATIONS ==
