Viet Nam: The dragon that rose from the ashes

This study takes as its starting point what Gunnar Myrdal had to say about Viet Nam in the context of his seminal work, Asian Drama: An Inquiry into the Poverty of Nations, published in 1968. Myrdal pointed to the decisive nature of the Vietnamese people; and subsequent developments, which are explained in detail in this paper, demonstrate that amply. Viet Nam adopted a dogged and, in retrospect, very costly position on economic policy and management from 1976. At the same time, when the approach taken did not produce the hoped-for results, an effective course correction was initiated in 1986 in the context of a comprehensive, domestically owned reform programme known as Doi Moi. Since then, Viet Nam has come a very long way; the last three decades have witnessed one of the best performances in the world in terms of both economic growth and poverty reduction. People's living standards have improved significantly, and the country's socio-economic achievements are impressive from a human development perspective. Wide-ranging institutional reform has been introduced, including a greater reliance on market forces in the allocation of resources and the determination of prices. The shift from an economy completely dominated by the state and cooperative sectors, to one where the private sector and foreign investment both play key and dynamic roles. Significant strides have been made to further the transition from a centrally planned to a market economy, without giving up strategic leadership and influence by the state.