Policy highlights:

  • Vietnam’s economic strategy has focused on rapid integration into the world economy, while at the same time investing in domestic agricultural and industrial development. Other developing nations can take away lessons from this example.
  • Policymakers should invest in export market access and foster a positive investment climate.
  • State organizations should be given an active role in agricultural development, but extensive reform is needed to effectively raise incomes and domestic demand as well as provide a more solid basis for expanding exports.
  • In Vietnam, state-owned enterprises have been successful in raising productivity without depending on competition from the domestic private sector. Privatization has little to offer if done prematurely.
  • Efforts should also focus on ensuring that productivity and growth do not depend too heavily on foreign aid.
  • Continued investment in education is crucial. The Vietnamese case shows that high literacy rates and developed higher education attracts foreign investors and facilitates industrial and technological development.
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