Economic reform in 1986 has brought a great achievement for Vietnam economy. Their participation in the Association of Southeast Asian Nations, Asia-Pacific Economic Cooperation, and World Trade Organization has made the country became more integrated into the world economy. Vietnam's economic growth rate in the 1990's was one of the highest in the world. According to the World Bank report, its average annual growth rate was measured 7.9% between 1990 to 2000 (World Development). Along these conditions, they did not only gain benefits but also difficulties. This paper will discuss the benefits and challenges during the growing period in Vietnam Economy, and how the 1997 Financial Crisis socially impacted the country as a whole. .
(PART A)The Doi Moi reform process that started in 1986 has fundamentally changed the standards of living in Vietnam. Such result can be observed through the reduction in poverty rate and increase in life expectancy. These are the primary indicators that allow us to have first sight about the benefits of economic reform in Vietnam. .
According to an article from World Bank, "The poverty headcount in Vietnam fell from nearly 60 percent to 20.7 percent in the past [two decades]." This dramatic reduction in poverty is a result due to multiple factors, but mainly land reform and remittances. As part of the Doi Moi, a land law approved in 1993 has played an important role, which it has allowed land to be transferred, exchanged, mortgaged and inherited freely. Formers can buy and sell land to redistribute their land for living. Hence, the allocation of land becomes more efficient for development and agriculture usages. Agriculture production becomes more diversified and food production increases from 19.5 million tons in 1988 to 39.5 million tons in 2005. On the other hand, a losing foreign capital control has allowed remittances play a role in lifting living standards.