Question

Discuss Vietnam's productivity growth from the years of 1970 till recent times and how they were able to achieve high growth through productivity in relation to the wars they have had and the colonization they went through by the French and the Americans. discuss what plans were used in their sectors and how they were implemented and if they had any dealings with other countries to effect their productivity.

Answer 1

Vietnam has emerged as one of Asia's most succesful country.It has changed itself from a nation which was devastated by the war of 1970 to an economy which has annual per capita growth of 5.3 % since 1986 till recent times .Until French revolution Vietnam economy was agrarian but after French revolution the French colonizers developed manufacturing as Vietnam was rich in mineral resources. Vietnam has benefiited by transition from agriculture to manufacturing and also because of its youthful population..It has also prospered because of trade relations with US.So it has become an important destination for foreign investors.Tourism infrastructure has been boosted and has expanded export of manufactured goods.If the country is to meet the the target of 7 to 8 % GDP growth by 2020 it should increase its labor productivity growth from 4.1 %to 6.4 %..

Since 1980 Vietnam has made a shift from highly centralised command economy to a mixed economy and uses indicative planning through 5 year plans.Two factors which increased the productivity of Vietnam was an expanding labor pool and a structural shift from agriculture to manufacturing. The third factor was however improving productivity within sectors.Vietnam needs to develop its capability in all sectors of the economy.Companies should be encouraged to continuosly innovate.The  plans had set high goals for growth of industry , agriculture and national income . It also gave priority to reconstruction and new construction.Development plans were focussed on agriculture and industry and intial investment was to support projects that would develop both sectors.The plans also included policy to bring structural reforms like private sector expansion, price decontrol etc.  However Vietnam needed financial support for such projects from western nations and international organizations.