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The economic transformation of Vietnam since the launch of its “Doi Moi” (reform) policy in 1986 has been remarkable. Over the past decades, Vietnam has made the transition from an agricultural, relatively isolated command economy to a globally integrating, export-focused, industrializing economy. Vietnam’s GDP growth has averaged 6.2 percent per year since 2000. While Vietnam’s economic performance to date has been significant, there are formidable hurdles ahead in efforts to achieve sustained and equitable growth. Those include consolidating the new economic gains into a strong foundation for ensuring long-term prosperity and competitiveness; effectively implementing the approved laws and regulations; and ensuring that the growing prosperity reaches down to poorer and marginalized Vietnamese.
USAID is in a unique position to assist Vietnam in facing these challenges. The reforms supported by USAID’s economic growth and governance programs have set the stage for greater transparency, economic openness, competition and the rule of law in economic affairs. Advances in these aspects of economic life are encouraging similar concepts and openness to emerge in Vietnam’s broader social and political landscape.
- USAID works with the Government of Vietnam to help strengthen the country’s emerging market-driven economy. USAID provides technical assistance to support commitments under the World Trade Organization (WTO) and to enhance trade opportunities.
- USAID technical assistance over the past three years has been a key contributor to improvements in the World Bank (WB)’s Doing Business results for Vietnam. Since 2014, USAID has cooperated with the Central Institute for Economic Management under the Ministry of Planning and Investment, along with other relevant ministries and agencies, to improve Vietnam’s business environment through the implementation of the Prime Minister’s Resolution 19. Six main areas of technical assistance include tax; social insurance; customs and trade; construction; land and property; and the judicial system (commercial disputes and bankruptcy). In late October 2016, the WB launched its annual Doing Business Report to assess the ease of doing business among 190 economies, ranking countries by 10 indicators. In the report, WB acknowledges the significant progress Vietnam has made over the last year, jumping 9 rankings, from 91st in the last report to 82nd this year. Improvements are recorded in the following indicators: protecting minority investors (up 31 places); trading across borders (up 15 places); paying taxes (up 11 places); and getting electricity (up 5 places this year; Vietnam jumped 27 places in last year’s rankings).
- USAID has promoted business and economic reforms through its Provincial Competitiveness Index (PCI) report since 2005 in cooperation with the Vietnam Chamber of Commerce and Industry. This report monitors economic and business reform efforts at the provincial level with surveys with over 12,000 domestic and foreign businesses. Starting in 2014, the Government’s Resolution 19 required monitoring of each province’s progress based on the PCI report. At the Government of Vietnam’s request, USAID carries out activities to support an enhanced business environment through legal and regulatory reform, competitiveness and consumer protection.
- From 2001 through 2016, Vietnam, as both a developing and a transition economy, rewrote or developed most laws and regulations affecting commercial activity and related judicial procedures. USAID has helped to revise more than 160 laws and related regulations and decrees and assisted more than 50 government agency counterparts in the legal and economic reform process through three phases of Support for Trade Acceleration (STAR) programs and the Governance for Inclusive Growth (GIG) program.
- USAID is supporting women’s economic opportunities through such activities as the Mekong Vitality Expanded (MVE) and Land Access for Women (LAW). These programs provide microfinance loans and technical training to women to increase their businesses and teach women about recent changes in land inheritance laws.
KEY GOVERNMENT OF VIETNAM PARTNERS
- Ministry of Justice
- Ministry of Planning and Investment
- Ministry of Finance
- Ministry of Industry and Trade
- Office of National Assembly
- State Audit of Vietnam
Last updated: March 14, 2017