Vietnam is a poor, densely populated country that has had to recover from the ravages of war. In 1975, Vietnam organized their economy following the Soviet Unions Planned economy. In the late 1980s, it was recognized that the plan had completely failed. They had set unrealistic production targets, they weren't able to match the requirements which created a breakdown in the plans operation. They also had a low productivity whereas the population was increasing, which made food shortages, starvation and hyperinflation. They were at a serious crisis point. .
Economic strategies.
In 1986, Nguyen Van Linh marked a new era in Vietnam. He had the idea of improving Vietnam's economy by making it Socialism. He wanted to reduce the role of government planning and become more market orientated like allowing private companies to operate. He also wanted western investments. Foreign investment projects include hotels and tourism, oil and gas, services and transport, communications, agriculture, fisheries, finance and banking. They also need to develop a commercial culture, a suitable legal system, modern infrastructure and financial institution, more efficient enterprises and export growth and a reduction in inequalities.He was also eager to improve relations with the US. This plan was called the "renovation" or "Doi Moi".
Update Performance over last 12 months.
After a sluggish early 90s with respect to export performance, the Vietnamese economy grew strongly in the last quarter and the overall economic performance was consistent with that of 2001. United States and Vietnam reached an agreement in 2000 to provide easier access to each others markets. Growth was led by domestic demand and private business development. International risk ratings agencies all increased their ratings for Vietnam in 2002, reflecting a better perception of the investment environment. .
With an estimated 6-7% growth in GDP, Vietnam remained one of Asia's fastest growing economies in 2002.
