The Vietnamese Economy: Seven Years after the Global Financial Crisis

Seven years after the Global Financial Crisis of 2008, concern with the Vietnamese economy has shifted from short-term issues of inflation and. balance of payments to prospects for medium- to longer term economic development. After several tumultuous years, macroeconomic stabilization has been achieved, but growth is significantly below trend, and is heavily dependent on manufactured, exports. State-led industrialization has, inter alia, resulted, in a lack of "industrial deepening" as well as a low employment-output elasticity. Deep structural reforms, particularly in the financial sector, state-owned enterprises, and public finance and investment are necessary to lift Vietnam's longer term growth and to provide employment for its relatively young and growing population. Strong political leadership is needed to resist the influence of vested, interests. Vietnam is indeed at the crossroads of taking action to join the ranks of the high-income industrialized, economies of East Asia in the future or remaining mired in low middle-income status.