Vietnam’s 40-year reconstruction cause after its reunification in 1975 has been hailed as a success story, with major international organisations and media taking note of the country’s rapid socio-economic development.

The United Nations said a fter reunification, due to the severe damages caused by many years of war, policy weaknesses and a difficult international environment, Vietnam’s economy experienced a long period of crisis during the 1970s and 1980s. To overcome these difficulties the Doi Moi (renovation) process was initiated in 1986, and on the back of the reforms, the country has seen rapid economic growth.

Since 1990, Vietnam’s GDP nearly tripled based on an average annual GDP growth rate of 7.5 percent - up until the global economic crisis in 2008. Growth suffered in 2008 (6.2 percent) and 2009 (5.3 percent) and is estimated to remain sluggish in 2010. Nevertheless, the percentage of the population living below the poverty line, estimated at 58 percent in 1993 decreased to under 12 percent in 2009. Domestic resources for development have increased and international trade and foreign direct investment have dramatically expanded over the past two decades.

The UN said the country’s two Socio-economic Development Strategies for 1991-2000 and 2001-2010 have helped Vietnam advance from a largely poor, agricultural-based economy to a wealthier, market-based and rapidly developing one, increasingly integrated into the regional and global community, and the new Socio-economic Development Strategy from 2011-2020 aims to establish the foundation for Vietnam to become a modern, industrialized country by 2020.

According to the UN, these strategies and collective efforts have taken Vietnam from being one of the poorest in the world only a few decades ago to a rapidly growing middle income country. In general, Vietnam’s growth record over the past two decades has been largely driven by a combination of steady economic reforms, integration into the world economy and a stable macroeconomic environment.

The World Bank also attributed Vietnam’s development success to the Doi Moi , noting that political and economic reforms launched in 1986 have transformed the country from one of the poorest countries in the world, with per capita income below 100 USD, to a lower middle income country within a quarter of a century with per capita income of over 2,000 USD by the end of 2014. To date, Vietnam has achieved most and in some cases surpassed a number of the Millennium Development Goals (MDGs), particularly with the goals on poverty reduction, education and gender equality. The percentage of people living in poverty dropped from almost 60 percent in the 1990s to under 10 percent today.

The WB cited figures that showed Vietnam’s growth rate has averaged 6.4 percent per year for the last decade, adding that while the growth has begun to slow recently, Vietnam has managed to improve macroeconomic stability, with headline inflation falling from a peak of 23 percent in August 2011 to about 4.1 percent for 2014. The external sector continues to be an important engine of growth.

It underlined the country’s Socio-Economic Development Strategy (SEDS) 2011-2020 which gives attention to structural reforms, environmental sustainability, social equity, and emerging issues of macroeconomic stability.

The WB also pointed to the fact that the Vietnamese Government has recently paid more attention to improving the business environment, with two Resolutions issued in March 2014 and March 2015, setting out concrete actions to remove obstacles to doing business in Vietnam, with a goal of achieving a business environment comparable to the average of the ASEAN-6 group.

The Asian Development Bank highlighted that Vietnam has been among the fastest growing economies in the world since 1990, but the pace slowed down during 1998-2003 due to slow structural reforms and the instability in the global economy.

During a visit to Vietnam in 2014, ADB President Takehiko Nakao said in order to strengthen the achievements and restore rapid and comprehensive economic growth, the country should intensify structural reforms, particularly in State-owned enterprises and the banking sector, while the government should tighten public debt control through increasing tax revenue and rationalizing public spending.

The ADB President also noted that the private sector plays an important role in improving the country’s competitiveness and avoiding the middle-income trap. According to him, Vietnam should try to optimize benefits from the global economic integration through enhancing trade and investment on the basis of deeper integration into the Association of South East Asian Nations (ASEAN) and free trade agreements.

The bank’s latest report on Asia development outlook in 2015 stressed priority should be placed on strengthening the banking system and outlining a clear strategy to tackle bad debts in short term.

In addition, Vietnam needs to speed up divestment of state-owned enterprises and accelerate their equitisation process, according to the report, which also urged the local enterprises’ greater participation in global value chain to leverage the fullest growth potential.

Bloomberg recently ran an article which said Vietnam is - once again -- being tipped for economic lift-off, after years of disappointment.

“Money pouring into the Southeast Asian economy from the likes of manufacturers Samsung Electronics Co. and Intel Corp. is giving Vietnam a second run at becoming Asia’s next tiger economy”, i t said.

The article quoted PricewaterhouseCoopers LLP as saying that the country has the potential to become one of the world’s fastest-growing economies over the period to 2050, adding that the Southeast Asian nation is gaining ground as a cheaper manufacturing alternative to neighbouring China, and is also a destination for Japanese firms boosting investment in the region amid recurring Sino-Japan spats.

The article noted that Vietnam’s growing clouts are gathering, citing reports that in 2014 the country overtook other Association of Southeast Asian Nations (ASEAN members to become the biggest exporter to the US, while disbursed foreign investment in the country has soared in the past 14 years to reach 12.35 billion USD in 2014, up 7.4 percent from 2013 and compared with 2.4 billion USD in 2000.

It reported the Vietnamese government is working on some of the economy’s biggest millstones, and quoted Dang Quyet Tien, deputy general director of the finance ministry’s corporate finance department as saying in an interview March 13 that Vietnam will attempt to sell a record amount of shares in state-owned companies this year.-VNA