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DLSU AKI 2005-12: Vietnam’s regional economic linkages and industrial competitiveness: An analysis with case studies of the textile and garment, electronics, and automotive industries

The Renovation (Doimoi) in 1986 and especially the market-oriented reform in 1989 marked a turning point in the history of Vietnam’s economic development. Vietnam adopted a radical and comprehensive reform package aimed at stabilizing and opening the economy, and enhancing freedom of choice for economic units and competition so as to change fundamentally its economic management system2. During 1997-2000, however, the reform although continuing, somehow slowed down, especially after the Asian financial crisis. From 2000 up to present, a new wave of economic reform has been stirred up with more policy actions on the development of the private sector, further trade and investment liberalization together with deeper international economic integration. Meanwhile, the reform of the state-owned enterprises (SOEs), financial system, and public administration were slower than expected and this limited the effectiveness and efficiency of other reforms. In parallel with the economic reform, the “open door policy” and the acceleration of the process of international economic integration has played a key role in enhancing efficiency and promoting economic growth. In 1992, Vietnam signed a trade agreement with the European Union (E.U.). Vietnam joined the ASEAN in 1995 and committed to fulfill the agreements under the AFTA by 2006. Vietnam applied for WTO’s membership in 1995 and expected to be a member by the end of 2005. In 1998, Vietnam became a member of the APEC. Two years later, Vietnam signed the Bilateral Trade Agreement with the United States (VN-U.S. BTA) and the Agreement took effect in December 2001. Recently, Vietnam has also joined regional integration clubs such as ASEAN - China Free Trade Area (2003) and ASEAN-Japan Comprehensive Economic Partnership (2003). Vietnam escaped from the crisis in the mid-1980s and since then the face of Vietnam’s economy and society has changed significantly. The overall goal of Vietnam’s Socio-Economic Development Strategy 2001-2010 is to accelerate the industrialization and modernization process in order to bring Vietnam out of underdevelopment and create a foundation so that by 2020 Vietnam will basically become “a modern-oriented industrialized country” (CPV 2001). The realization of this goal obviously cannot be achieved without a successful linkage with the regional and global network, an appropriate structural adjustment and a considerable improvement on the competitiveness of the Vietnamese economy.

DLSU - Angelo King Institute for Economic and Business Studies
Authors Keywords
Vo, Tri Thanh; Trinh, Quang Long; Dinh, Hien Minh; garments and textile industries; ASEAN; electronics; automobile sector; trade and investment; ASEAN trade and investment flows;
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