Economy of Vietnam

Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems existing in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market oriented economy leads to disaster. GDP growth of 8.5% in 1997 fell to 4% in 1998 and rose slightly to an estimated 4.8% in 1999. These numbers masked some major difficulties that are emerging in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Foreign direct investment has fallen dramatically, from $8.3 billion in 1996 to about $1.6 billion in 1999. Meanwhile, Vietnamese authorities have slowed implementation of the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries. Privatization of state enterprises remains bogged down in political controversy, while the country's dynamic private sector is denied both financing and access to markets. Reform of the banking sector - considered one of the riskiest in the world - is proceeding slowly, raising concerns that the country will be unable to tap sufficient domestic savings to finance growth. Administrative and legal barriers are also causing costly delays for foreign investors and are raising similar doubts about Vietnam's ability to attract additional foreign capital.

GDP: purchasing power parity - $143.1 billion (1999 est.)

GDP - real growth rate: 4.8% (1999 est.)

GDP - per capita: purchasing power parity - $1,850 (1999 est.)

GDP - composition by sector:

• agriculture: 26%
• industry: 33%
• services: 41% (1998 est.)

Population below poverty line: 37% (1998 est.)

Household income or consumption by percentage share:

• lowest 10%: 3.5%
• highest 10%: 29% (1993)

Inflation rate (consumer prices): 4% (1999 est.)

Labor force: 38.2 million (1998 est.)

Labor force - by occupation: agriculture 67%, industry and services 33% (1997 est.)

Unemployment rate: 25% (1995 est.)

Budget:

• revenues: $5.6 billion
• expenditures: $6 billion, including capital expenditures of $1.7 billion (1996 est.)

Industries: food processing, garments, shoes, machine building, mining, cement, chemical fertilizer, glass, tires, oil, coal, steel, paper

Industrial production growth rate: 10.3% (1999 est.)

Electricity - production: 20.62 billion kWh (1998)

Electricity - production by source:

• fossil fuel: 12.95%
• hydro: 87.05%
• nuclear: 0%
• other: 0% (1998)

Electricity - consumption: 19.177 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: paddy rice, corn, potatoes, rubber, soybeans, coffee, tea, bananas; poultry, pigs; fish

Exports: $11.5 billion (f.o.b., 1999 est.)

Exports - commodities: crude oil, marine products, rice, coffee, rubber, tea, garments, shoes

Exports - partners: Japan, Germany, Singapore, Taiwan, Hong Kong, France, South Korea, US, China

Imports: $11.6 billion (f.o.b., 1999 est.)

Imports - commodities: machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement, motorcycles

Imports - partners: Singapore, South Korea, Japan, France, Hong Kong, Taiwan, Thailand, Sweden

Debt - external: $7.3 billion Western countries; $4.5 billion CEMA debts primarily to Russia; $9 billion to $18 billion nonconvertible debt (former CEMA, Iraq, Iran)

Economic aid - recipient: $2 billion in credits and grants pledged by international donors for 1999 and again for 2000

Currency: 1 new dong (D) = 100 xu

Exchange rates: new dong (D) per US$1 - 14,020 (January 2000), 13,900 (December 1998), 11,100 (December 1996), 11,193 (1995 average), 11,000 (October 1994), 10,800 (November 1993)

Fiscal year: calendar year

See also : Vietnam