Booming Economy, Effective COVID-19 Action: Vietnam Sets Sights On Becoming A Developed Nation
“By 2045, when Vietnam celebrates its founding centenary, Vietnam will become a developed and high-income group country,” says the Communist Party of Vietnam.
Vietnam's economy grew 2.9% as the global economy plunged into recession in 2020. | Source: Unsplash
When the 20-year Vietnam war ended in 1975, the country had one of the poorest economies. Today, the country is setting its sights on becoming a developed nation.
During the opening session of the 13th Party Congress in Hanoi on Tuesday, Party chief Nguyen Phu Trong said Vietnam’s impressive economic achievements amidst the COVID-19 pandemic and the country’s effective containment of the coronavirus showed Vietnam’s capability to overcome socio-economic setbacks.
“Growth quality has improved, the economy has been stable, inflation has been kept under control,” said Trong to nearly 1,600 delegates from across Vietnam.
While the global economy suffered a recession, Vietnam’s economy grew 2.9% in 2020. And it’s already eyeing an average annual gross domestic product growth of 7% over the next five years.
"Results achieved during the term of the 12th Party congress are of particular importance as they contribute to reinforcing trust and confidence, creating a momentum for the entire society to continue to overcome difficulties and challenges, and take advantage of favorable opportunities to take the country into a new period of development," said Trong, according to VnExpress.
35 years since Doi Moi
Trong further highlighted the nation’s historically significant progress since Doi Moi, a series of economic and political reforms introduced in 1986.
Doi Moi steered the country to becoming a socialist-oriented market economy, embracing trade liberalization by lowering the cost of doing business and investing heavily in human and physical capital.
Economic analysts pointed out Vietnam’s various free trade agreements signed in the last 20 years. Vietnam joined the Asean free trade in 1995, the US in 2000 and the World Trade Organization in 2007. It was then followed with trade deals with China, India, Japan and Korea, gradually lowering tariffs imposed on both imports and exports to and from Vietnam.
Between 2002 and 2018, GDP per capita increased by 2.7 times, reaching over $2,700 in 2019 and more than 45 million people were lifted out of poverty, according to the World Bank. Poverty rates declined sharply from over 70% to just below 6%.
In 2019, Vietnam continued to show strength and resilience, supported by the domestic demand and export-oriented manufacturing. The country’s GDP grew by an estimated 7%, one of the fastest growth rates in the region.
Along with economic magnification in the past 30 years, provision of basic services has also improved at tremendous length. As of 2016, 99% of Vietnam’s population uses electricity as their main source of lighting, up from just 14 percent in 1993. Access to clean water also increased to 70% in 2016 in rural areas, and above 95% in major cities.
All of Vietnam’s investments paid off. With all the infrastructure, manpower and business-friendly policies, the country has become the apple of the eye of foreign investments and manufacturing. It’s already creating a buzz in the electronics industry, with companies like Foxconn, Samsung and LG investing heavily on manufacturing plants. Top European and American apparel makers have also set up factories across the country. In 2017, Vietnam became the largest exporter of clothing in the region, and the second largest exporter of electronics.
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Eyes on the future
“By 2045, when Vietnam celebrates its founding centenary, Vietnam will become a developed and high-income group country,” reads a statement released by the Communist Party of Vietnam ahead of this week’s meeting.
The 13th Congress will draft strategies to make Vietnam a modern industrialized developing country, and elevate it from the lower-middle income group by 2025.
Despite the economic expansion, Trong acknowledged that Vietnam still has to resolve issues to fully pave the way for prosperity.
"Results achieved during the term of the 12th Party congress are of particular importance as they contribute to reinforcing trust and confidence, creating a momentum for the entire society to continue to overcome difficulties and challenges, and take advantage of favorable opportunities to take the country into a new period of development," said Trong, as reported by VnExpress.