How Vietnam rises like a miracle from a bygone era to become the new miracle of Asia

The GDP scale of Vietnam’s economy has increased more than 10 times compared to 2000, reaching an estimated 9,513 million billion VND or 409 billion USD in 2022, according to the General Statistics Office, Ministry of Planning and Investment.

The Government e-newspaper reports that Vietnam’s economic growth in 2022 has exceeded many planned targets, achieving a miraculous rate of 8.02%. This growth rate, which is 2.5 times higher than the inflation rate, is a “proud difference” for Vietnam amidst the world’s highest inflation in 40 years and low growth.

With such good news, Vietnam’s economic position in international trade is increasingly being consolidated and confirmed. The international press has praised Vietnam’s economic development achievements. CNBC named Vietnam Asia’s best-performing economy in 2020, a feat achieved despite the COVID-19 pandemic’s impact on the global economy.

According to the Diplomat magazine, Vietnam’s remarkable economic development can be surprising to many people. However, for those who have closely followed Vietnam’s efforts over the past few decades, this result is inevitable. Vietnam has transformed itself from one of the poorest economies to one of the fastest-growing in the world, becoming an increasingly attractive destination for foreign investors.

Foreign direct investment (FDI) into Vietnam has increased more than 200 times since 1986, from $40,000 to $15.8 billion in 2018. Vietnam has also become an important part of the global supply chain for textile, footwear, and electronic manufacturing industries. Vietnam’s exports from 2020 to 2021 have increased by 19%.

Vietnam’s rapid economic growth can be attributed to at least six factors, according to the Times of India.

First, Vietnam has implemented serious reforms since 1986 to establish a “socialist-oriented market economy.”

Second, Vietnam has increased production in both the industrial and agricultural sectors, boosting exports. In 2022, Vietnam’s industry and construction grew 7.78%, the service sector grew 9.99%, the agriculture sector grew 3.36%, and the export sector grew 10.6%.

Third, Vietnam has maintained low inflation, which is crucial for economic growth. The government has implemented flexible measures to control inflation, such as controlling market liquidity and offering tax exemptions and reductions for essential and strategic items.

Fourth, Vietnam has made changes to facilitate foreign investment by simplifying administrative procedures and applying digital public services to create an efficient and attractive environment for investors. As of December 2022, Vietnam has attracted a total FDI capital of 27.72 billion USD, with Singapore, South Korea, and Japan being the top FDI sources in 2022.

Fifth, Vietnam has focused on digitization to facilitate business activities. Essential public services have been digitized since July 2022, and many industrial companies have applied technology to improve internal management processes, logistics, production, marketing, and financial transactions. Finally, domestic consumption has become an important driver of Vietnam’s economic development. Retail sales of goods and services in Vietnam increased by 19.8%.

According to the Indian newspaper, Vietnam has many economic growth prospects in 2023. Three groups of experts have predicted that Vietnam’s economic growth in 2023 will reach 6.05% or more. Singapore-based UOB bank predicts Vietnam’s GDP growth in 2023 will be at 6.6%.

However, the global recession may pose certain barriers to Vietnam’s economic growth. Therefore, Vietnam needs to invest more in key technologies, improve labor skills, infrastructure, and strengthen connectivity with markets. In addition, as digitization becomes more common, the threat of cybersecurity also needs to be paid more attention.

In conclusion, Vietnam has achieved remarkable economic growth over the past few decades and has become an attractive destination for foreign investors. The country’s success is attributed to various factors such as economic reforms, diversification of production, low inflation, ease of doing business, digitization, and domestic consumption. While Vietnam’s economic growth prospects look positive for 2023, it needs to address potential challenges to maintain sustainable growth.