The Economy of Vietnam

The economy of Vietnam is still developing after experiencing subsequent exploitive economic measures and the devastating effect of the Vietnam War. With an annual GDP based on purchasing power parity of US$280.2 billion, Vietnam remains a comparatively poor country. The country has made a shift from a central control-based economy to socialist-oriented mixed market economy.

In 2006, the industry sector remains the biggest contributor in the nation’s GDP with 41.8%, followed by services 38.1%, and agriculture 20.1%. But in terms of labor force, agriculture has the biggest number accounting to 56.8%, followed by industry 37%, services 6.2%. Vietnam’s main industries include food processing, garments, shoes, machine building, cement mining, glass tires, oil, chemical fertilizer, coal, steel and paper. Currently, Vietnam is the biggest producer of cashew nuts and second largest exporter of rice next to Thailand. Its main export partners are Japan, Germany, Singapore, Taiwan, Hong Kong, France, South Korea, and China. Tourism also plays a vital role in the country’s services sector. In 2004, Vietnam welcomed almost 3 million foreign visitors.

In July 13, 2000 the United States and Vietnam signed a Bilateral Trade Agreement (BTA) which provided for Normal Trade Relations (NTR) status of Vietnamese products in the US market; this event is a very important milestone for the economy of Vietnam. And after 11 years of preparation including 8 years of negotiation, the country finally became the 150th member of the World Trade Organization (WTO) on November 7, 2006. From 2000 to 2004 the country recorded an average annual growth in GDP of about 7% and in 2005, an astounding 8.4% making it the second biggest growth in Asia after China.