Vietnam is a long, narrow country located in southeast Asia, covering an area of 330,363 sq. km. Vietnam has shared borders with Cambodia, China, and Laos. The country had a population of 82.2 million in 2004 and the population growth has been around 1.2 percent annually. The average population density of the country is approximately 246 per sq. km. Life expectancy for the population as a whole was estimated to be 70.61 in 2005. The primary ethnic group in the country is the Vietnamese, with significant numbers of ethnic minorities, primarily consisting of Chinese, Hmong, Thai, Khmer, Cham, and Montagnards. Hanoi is the capital; it and Ho Chi Minh City (Saigon) are the two largest cities in the country. Vietnamese is the official language of the country and Mahayana Buddhism is the most popular religion. Vietnam has a very high literacy rate of well over 90 percent; however, much of the population has limited access to education. The Vietnamese Communist Party (VCP) has a monopoly on political power within the country. Vietnam is a member of the Association of Southeast Asian Nations (ASEAN) and the Greater Mekong Subregion.
Vietnam’s history has been closely intertwined with that of China. It is commonly believed that Vietnamese culture originated in the Red River Valley and has slowly diffused in a southerly direction. The area of modern-day Vietnam was under Chinese rule for approximately 1,000 years beginning around 111 b.c.e., which was then followed by around 900 years of independence. Vietnam became a French colony in the 19th century, and in 1954 became divided into Communist North and U.S.–supported South Vietnam. Following a lengthy civil war, the country was reunited in 1975 under Communist rule.
Initially, following the reunification of the country, the economy fared poorly; however, starting with reforms in 1986, the economy has seen fairly rapid and steady growth. The economy grew by 8.5 percent in 2007, which followed an average growth rate of 7.8 percent in the previous five years. Per capita gross domestic product (GDP) grew by 5.6 percent in 2007 and it is estimated to be 5.6 percent and 6.7 percent in 2008 and 2009, respectively. Investment has been extremely high in Vietnam, contributing to over 40 percent of GDP in 2007. However, inflation has continued to be a problem and was 19 percent in March 2008. Vietnam has a substantial and growing negative trade balance. After a year of seeing the Vietnam (VN) Index prices rise by 144 percent in 2006, stock prices declined sharply in 2007.
The industrial sector of the economy has been the primary driving factor in recent GDP growth, with the private sector’s growth exceeding that of the public sector. Agriculture productivity, however, has lagged behind, with only 3.4 percent growth in 2007. Unemployment was at 4.6 percent in 2007. A severe shortage of skilled labor has resulted in a rapid rise in professional salaries and high staff turnover rates. Other difficulties encountered by international businesses in Vietnam have been identified as the country’s having insufficient infrastructure and excessive bureaucracy. The central government’s expenditure measured as a percentage of GDP has risen from 30.6 in 2003 to 32.4 in 2007 and is by far the highest in southeast Asia.
Vietnam’s economic performance has had a substantial impact on reducing poverty in the country. From the early 1990s to 2005, it has been estimated that the percentage of the population living in poverty has fallen from well over 50 percent to 29 percent. However, the declines in poverty have been unevenly divided, with urban areas, particularly Ho Chi Minh City, seeing both rapid rises in average income and declines in poverty, while the declines in poverty in many rural areas have been more modest. It has been reported that corruption and an inefficient public sector, including the state-owned banks, are obstacles that need to be overcome for the country to continue to experience rapid economic growth and further reductions of poverty.
- Asian Development Bank, Outlook 2008: Workers in Asia (Asian Development Bank, 2008);
- Frederick R. Burke and Thành Vinh Nguyen, Business Operations in Vietnam (Tax Management, Inc., 2006);
- Jayant Menon, “Can Subregionalism or Regionalism Aid Multinationalism? The Case of the Greater Mekong Subregion and the Association of Southeast Asian Nations Free Trade Area,” Journal of Greater Mekong Subregion Development Studies (v.2/1, 2005);
- W. Taylor, “Surface Orientations in Vietnam: Beyond Histories of Nation and Region,” Journal of Asian Studies (v.57/4, 1998).
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