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A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

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WP/20 Globalization Crises, Trade, and Development in Vietnam

Vietnam has been among the most successful East Asian economies, especially in weathering the external shocks of recent globalization crises—the 1997-98 Asian financial crisis and the 2008-09 great recession, financial crisis and collapse of global trade. Its success contradicts its characterization as an example of export-led growth and highlights the role of the state, particularly in maintaining and influencing investment. Examination of economic performance and policy responses shows rising dependence on foreign finance around each crisis, and actions by the government to counteract that dependence and bolster the domestic economy while continuing to restructure the economy toward greater emphasis on the private sector. Growth, employment and poverty alleviation have been maintained at the expense of renewed inflation, larger budget deficits, and currency depreciation. The ‘stop-go’ nature of present macroeconomic policy is the consequence of balancing growth versus inflation, responding to severe external shocks and holding to a growth objective in the face of substantial internal and external criticism.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2011/20
Title:
WP/20 Globalization Crises, Trade, and Development in Vietnam
Authors:
Philip Abbott and Finn Tarp
Publication date:
March 2011
ISBN 13 Web:
978-92-9230-383-9
Copyright holder:
© UNU-WIDER
Copyright year:
2011
Keywords:
trade and development, trade liberalization, foreign direct investment, globalization, WTO accession, asian financial crisis, great recession, Vietnam
JEL:
F13, F14, O24, O53
Project:
New Directions in Development Economics
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development—DFID).
Format:
online