Economic Growth and Poverty Reduction in Viet Nam

Abstract

Viet Nam’s emergence as one of the fastest growing economies in Asia over the last two decades has been widely hailed. This has been attributed to a series of reforms, known as the doi moi, which started in the latter part of the 1980s. Reforms began primarily in the agricultural sector which, at the time, accounted for close to 40 percent of gross domestic product (GDP) and 70 percent of total employment. The country’s reform effort focused initially on the dismantling of collective farms, redistribution of land to peasant households through long-term leases, and abolition of price controls on goods and services. It then eliminated production and consumption subsidies and streamlined the public sector (Dollar and Litvack 1998, Weinns 1998). Further, the reform effort included the stabilization of inflation and liberalization of foreign trade and investment (Dollar 2002).