As Vietnam gets ready to join the WTO, some companies are set to gain from access to global markets while others…According to Deputy Prime Minister Nguyen Sinh Hung
…local companies will have to make many improvements if they don’t want to lose out in domestic markets.
“If enterprises do not reform quickly, particularly state-owned enterprises, which generate more than 40 percent of the GDP, they will be confronted with huge difficulties,” he said.
Sounds like WTO membership is a great incentive to reform state-owned enterprises in Vietnam and business environment in general. You want to have access to the global economy? WTO is a solution. But having access is not the same thing as integrating into global markets, and its not the same thing as remaining competitive in those markets. To remain competitive, the government will have to continue the course of market liberalization and economic reform.
Still, Vietnam’s economy is booming. In the region, its second only to China in growth rates. This article in the New York Times takes a closer look at the country’s ongoing transition to a market economy. As we have seen through other transitions, technocrats, who learn about free markets and business practices abroad and come back to mix international best practices with local realities, matter.
Like China and India, Vietnam has benefited enormously from the return of a diaspora — people who had fled the country. Thousands of overseas Vietnamese have come home after learning English, gaining entrepreneurial experience and acquiring technical skills.
Although Vietnam is transitioning to an economic system that resembles a market economy rather than some central-planning arrangements, democratic institutions are slow to take hold. But, the opportunities are there – as economic reforms continue, as the middle class emerges, and as growth continues to lift people out of poverty, pressures to democratize will mount and political freedoms will begin to institutionalize. We’ve seen this happen before.
Published Date: October 25, 2006