Benefits of Economic Reforms in Vietnam
Introduction
In 1986, Vietnam introduced economic reforms on the open market, similar to those which began in China at the end of the seventh century on Xiaoping Day (Benjamin & Brandt, 2004). The Reformation was called Doi Moi (economic rejuvenation) and seemed desperate to be accepted. The reforms introduced in the early 1980s gave the indigenous population more publicity in their affairs and allowed them to sell surpluses as soon as their quota was reached. In 1988, corporate agriculture was divided, and the land was divided among small farmers who received rent for 20 years. Rice production flourished according to Benjamin and Brandt (2004). In 1990, farmers were allowed to sell their crops on the open market. This immediately increases productivity. Covered as strategic goods, harvests can only be exported by companies that are agreed to by profit-generating countries by paying farmers far below world market prices.
Research Questions
The following research questions will guide this investigation:
To what extent has the economy of Vietnam been influenced by the 1980s economic reforms?
What is the current state of the economy of Vietnam in terms of Gross Domestic Product?
Which sectors are the main drivers of the Vietnamese economy?
Methodology
In conducting this research, the investigator will rely on the deductive approach of data collection and analysis. The choice of deductive approach is based on the fact that the investigator will make a conclusion based on formulated theories which have been tested and agreed or rejected. Also, a deductive approach is used to explain several events, results, and social and environmental accounting conditions for financial and non-financial disclosures (Myers, Well, & Lorch, 2010).
Analysis of Results
The number of Vietnam is impressive so far in 2018. The business environment in the country grew significantly at the beginning of the year. More than 26,000 new companies were established. Besides, the government stressed that foreign direct investment reached more than $ 3.8 billion in the first three months of this year, increasing 7.2 percent from 2017 (Mai, 2018). Overall, the socialist country’s gross domestic product (GDP) was the first to grow 7.1 % per year for the first six months of 2018 – the fastest growth since 2011. Among the best performing sectors is production, which grew by 13% in the first half of this year. Vietnam’s rapid growth in the past decade was mainly due to the transition from a tightly controlled economy to a more liberal system. Over the past ten years, the country has begun reforms such as deregulation, which has encouraged private companies and foreign investment.
Conclusion
The benefits of the Vietnamese reform also benefit the people. In the latest World Bank report, “Climbing the ladder: reducing poverty and sharing the wealth,” Vietnam has managed to reduce its poverty rate by 13% over the past year. Although much has emerged from poverty, income inequality in Vietnam has increased. According to Oxfam’s Global Aid and Development charity in 2017, the annual income of 210 richest people in Vietnam is enough to lift 3.2 million people out of poverty and end extreme poverty in the country.
References
Benjamin, D., & Brandt, L. (2004). Agriculture and income distribution in rural Vietnam under economic reforms: a tale of two regions. Economic growth, poverty, and household welfare in Vietnam, 133-186.
Myers, J. L., Well, A. D., & Lorch, R. F. (2010). Research design and statistical analysis, Routledge. New York.
Mai, T. H. (2018). Solutions for exchange rate policy of transition economy of Vietnam.