By William Pesek May 9, 2013 6:00 PM ET
Like other would-be tiger economies, Vietnam faces a trifecta of new threats: a crisis-paralyzed Europe, a faltering America, and a newly spendthrift Japan. Yet the biggest risk to the nation’s future may be old-fashioned nostalgia.
It has been 27 years since Hanoi launched the “Doi Moi” reforms that allowed privately owned companies to participate in the economy and opened key sectors, such as agriculture. The rapid growth that followed propelled Vietnam toward the realm of middle-income nations, transforming the onetime war zone into a case study for development and poverty reduction. Now, though, Vietnam’s 1986 blueprint for a “socialist-oriented market economy” is looking dated.
Recent data show the strategy that got Vietnam this far — a China-like heavy reliance on state-owned enterprises and top-down planning — is now holding the nation back. Vietnam is losing ground on global competitiveness league tables while growth has slowed to about 5 percent, the lowest rate since 1999. To recover, the country needs to do precisely what it has avoided doing thus far: build a truly vibrant and innovative private sector that can diversify growth and create prosperity.
Read more: http://www.bloomberg.com/news/2013-05-09/vietnam-s-star-is-dimming.html
