According to the latest statistics, Vietnam’s non-crude oil exports increased by 26 percent last year. Notably, garments and woodwork exports rose by more than 30 percent. Foreign direct investment hit a record high of US$20.3 billion. The capital market grew and flourished, making up more than 40 percent of the country’s GDP compared to 1.1 percent in 2005.

The opening up of the economy, institutional reforms and the gradual completion of the legal framework created a favourable, transparent and equal environment for businesses. 

However, the WTO membership revealed major inherent weaknesses in the national economy that need to be overcome.

First of all, Vietnam’s legal system remains incomplete and need to be improved in line with its WTO commitments and international norms. It is imperative to narrow the development gap between reality and requirements in terms of State workers’ professionalism, transparency and capabilities.

Second, poor infrastructure is causing huge losses to the national economy. A lack of a skilled labour force is stunting qualitative growth and sustainable development in the international integration process.

Third, the economy began to face risks from WTO membership. The high inflation rate of 12.6 percent in 2007 and 9.19 percent in the first quarter of 2008 affected the living conditions of a majority of the population, particularly low-income earners.

Behind these weaknesses are two major contradictions. Dr Vo Tri Thanh, a senior economists from the Central Institute for Economic Management (CIEM), says that the first contradiction lies between the requirement for achieving a high economic growth and settling social and infrastructure issues, as well as maintaining social stability.

However, he believes that Vietnam’s set target of achieving a 9.5 percent GDP growth rate is within reach, given its investment level at present, and the target can only be met when the Government enhances its management capacity.

Another contradiction is between burgeoning business activities and weaknesses in businesses’ risk management and financial supervisory capacity.