Economic Reform, Private Sector Development, and the Business Environment in Viet Nam

Abstract

This study assesses the post-reform business environment in Viet Nam as seen from a Vietnamese perspective. A survey was conducted in the two largest cities, Hanoi and Ho Chi Minh City to study how Vietnamese entrepreneurs and owners evaluate the post-reform business environment. The findings were mixed. For instance, while the evidence supports the common thesis concerning the specific weaknesses in some sectors such as the legal and financial, it contradicts the conventional wisdom that lack of access to bank credit constitutes a crippling impediment for entrepreneurial initiatives. There is some evidence showing entrepreneurs' reliance on market prices for making important decisions, indicating that the price mechanism has begun to take root. Further, contrary to expectation, most entrepreneurs found the commercial/market conditions acceptable; they also expressed a feeling of trust and confidence in the future of the business environment in Viet Nam.