ECONOMIC DEVELOPMENT UNDER REFORM AND WORLD INTEGRATION AND THE MAIN FACTORS INFLUENCING THE ECONOMIC GROWTH IN VIETNAM

Abstract

The purpose of this paper was to give an overview of economic development under reform and world integration and to evaluate the main factors influencing the growth of the Vietnamese economy during the reform period (1990-2009). Based on statistical data on the Vietnamese economy in the period of 1990-2009, this study analyzed the factors affecting economic growth. The policy changes, economic development, poverty rates and living standards of Vietnamese population are analyzed over the reform period using qualitative methods. The results of this study show that economic growth under reform and world integration has reduced the poverty rate and increased living standards of population in Vietnam. An evaluation of the factors influencing economic growth is made using a quantitative model of total factor productivity (TFP) and another econometric model. The findings from this quantitative analysis show that the growth of the Vietnamese economy was determined by two factors: (1) capital investments, including foreign direct investment (FDI) and (2) the growth of exports. The results of these qualitative and quantitative analyses lay the foundation for policy recommendations for Vietnam Government to develop economy in the future.