For the past two decades, Vietnam has been a country on the move. GDP per capita in 1990 was $98, among the lowest in world.1 Today, with per capita income at roughly $1200, Vietnam has risen to be included in the World Bank’s lower middle-income category. This growth has produced what the World Bank has called a “historic reduction in poverty.” Except for a drop to 5 percent during the Asian financial crisis in 1997, Vietnam’s growth has hung steadily between 7 and 9 percent, earning the frequent soubriquet “miracle economy.”
Vietnam, however, is at a critical junction. How it comes through this period will be crucial for Vietnam, to be sure, but it will also have significant implications for economic growth and security in the Asia-Pacific region. Right now, three major currents are converging on Hanoi. The first is a sluggish global economy on which Vietnam depends heavily and which has pushed Vietnam’s growth back toward 5 percent. Second, is a young, growing population that requires a rapidly growing economy to provide sufficient employment. This demographic imperative demands a new growth model to temper the slowly surfacing frustration with the economy and the communist party (CPV) in charge of it. The third is the increasingly tense brinksmanship with China over the territorial rights to the islands in the South China Sea (for Vietnam, the East Sea). The growing importance of Vietnam, both economically and as a member of the several economic and security alliances in Asia, means that how effectively Vietnam navigates through this juncture can have broad implications for the region and for the United States. (purchase article…)
Robert A. Rogowsky is Professor of Trade and Development at the Monterey Institute of International Studies and Adjunct Professor of Trade and Commercial Diplomacy at Georgetown University School of Foreign Service. His publications include Trade Liberalization: Fears and Facts. He is also an Academic Advisor at The Brattle Group and President of the Institute for Trade and Commercial Diplomacy.
Image Credit: trungydang, CC BY 3.0 <https://creativecommons.org/licenses/by/3.0>, via Wikimedia Commons
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