Vietnam’s reform and integration efforts

Joining the World Trade Organization (WTO) has offered Vietnam a wealth of
opportunities to speed up economic development, boost its exports and attract more
foreign direct investment (FDI).

However, according to economic experts, Vietnam still has weaknesses such as poor quality
growth, outdated infrastructure, inadequate human resources and a low competitive capacity.
Therefore, in order to take advantage of any opportunities, it is essential to improve the
quality of growth and FDI, increase the efficiency of investments, stabilize the financial
market and introduce policies to stabilize the macro economy in a flexible and reasonable
manner.

Impact on economic growth

International economic integration and admission to the WTO has a positive impact on
Vietnam’s economic growth for the past three years.

Despite the price hikes in the world market putting more pressure on the input costs of
domestic products, Vietnam still reached a GDP growth rate of 8.5 percent in 2007.

In 2008, the country’s economic growth suffered due to the soaring prices of materials, high
inflation and its major partners facing an economic downturn.

However, sharp increases in the price of key exports, including crude oil and foodstuffs and
an expanded export market have had a positive impact on the country’s economic growth.
Because of several difficulties, Vietnam’s economic growth rate only reached 6.2 percent in
2008.

A CIEM report said that if international economic integration does not go further, Vietnam’s
economic growth will slow down. In 2009, the negative effects of the global financial crisis
and the positive effect of international economic integration resulted in Vietnam’s GDP
falling to 5.3 percent. However, this growth rate is still higher than that of many other
countries in the world.

Choosing suitable development model

In 2010 the world’s economy is forecast to recover despite a number of difficulties still lying
ahead. Economists have noted that in the post-crisis period the world economy will be
restructured more robustly and if Vietnam fails in this process it will find itself lagging
behind other economies.

Vietnam is not only a member of the WTO but many other economic institutions, such as the
ASEAN-China commitment, and the agreement between ASEAN-Japan, Australia and New
Zealand in the next few years. Therefore, the country needs to be aware of the impact of
these commitments to introduce suitable measures to cope with them.
The business community will face several conflicting relationships, such as speed and the
quality of growth, growth and macro-stability, the balance between domestic and foreign
markets and State interference in the market. Therefore, it is very important to choose a
suitable model of development. Vietnamese people realized that the country has an important
position in Southeast Asia and an increasingly growing position in Asia and the world.

As a WTO member, the State needs to set up a team of experts for each sector to take part in
the Doha round of negotiations to bring more benefits to developing countries, including
Vietnam. The country should do its utmost to persuade other countries and economic
institutions to recognize Vietnam’s full market economy because this will help domestic
businesses deal with anti-dumping lawsuits.

“Vietnam is determined to develop into an industrialized country, but which development

model will be chosen and which industries will be the key sectors?,” Choosing a proper
model will help Vietnam to develop strongly and sustainably and it is also an important
factor that will help the economy integrate more successfully in the future.