GDP (2005): $53.1 billion
Real growth rate (2005): 8.4%
Per capita income (2005): $638
Inflation rate (2005): 8.4%
External debt (2005): 32.5% of GDP, $17.2 billion
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Natural resources: Coal, crude oil, zinc, copper, silver, gold, manganese, iron
Agriculture and forestry (20.9% of GDP, 2005): Principal products–rice, maize, sweet potato, peanut, soya bean, cotton, coffee, cashews. Cultivated land–12.2 million hectares. Land use–21% arable; 28% forest and woodland; 51% other
Industry and construction (41% of GDP, 2005): Principal types–mining and quarrying, manufacturing, electricity, gas, water supply, cement, phosphate, and steel
Services (38.1% of GDP, 2005): Principal types–wholesale and retail, repair of vehicles and personal goods, hotel and restaurant, transport storage, telecommunications, tourism
Trade (2005):
Exports–$32.23 billion. Principal exports–garments/textiles, crude oil, footwear, rice (second-largest exporter in world), sea products, coffee, rubber, handicrafts. Major export partners–U.S., EU, Japan, China, Singapore, Australia, Taiwan, and Germany.
Imports–$36.88 billion. Principal imports–machinery, oil and gas, garment materials, iron and steel, transport-related equipment. Major import partners–China, Japan, Singapore, Taiwan, South Korea, Hong Kong, and Thailand. Exports to U.S. (2005)–$6.5 billion.

Economic stagnation marked the period after reunification from 1975 to 1985. In 1986, the Sixth Party Congress approved a broad economic reform package called “Doi Moi” (renovation) that introduced market reforms and dramatically improved Vietnam’s business climate. Vietnam became one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003. In 2004-2005, GDP grew over 8% annually. Vietnam’s inflation rate, as measured by the consumer price index, which stood at an annual rate of over 300% in 1987, was below 4% from 1997 (except in 1998 when it rose to 9.2%) until 2003. However, in 2004 the consumer price index increased to 9.5%, dropping slightly in 2005 to 8.4%. Average annual foreign investment commitment has risen sharply as a result of the U.S.-Vietnam Bilateral Trade Agreement and Vietnam’s drive toward membership in the World Trade Organization (WTO). In 2006, investment commitment is expected to rise to $9 billion, up from $2.2 and $4.0 billion in 2004 and 2005, respectively. The average Vietnamese savings rate is about 30 percent. From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world’s second-largest exporter of rice.

Foreign trade and foreign direct investment have improved significantly. The shift away from a centrally planned economy to a more market-oriented economic model improved the quality of life for many Vietnamese. Per capita income, $220 in 1994, rose to $638 in 2005 with a related reduction in the share of the population living in acute poverty. However, regional differences in average income are wide: $638 for the whole country on average but about $1,800 in Ho Chi Minh City and much lower than average in poorer provinces of the central and northern highlands.

The East Asian financial crisis in the late 1990s slowed the pace of economic growth that marked the earlier part of the decade. While a return to pre-crisis levels of growth and development has been slow, the pace has picked up in recent years, primarily as the result of ongoing economic and trade liberalization. Vietnam’s economic stance following the East Asian financial crisis first emphasized macroeconomic stability, then shifted its focus toward growth. While the country has moved toward a more market-oriented economy, the Vietnamese Government still holds a tight rein over major sectors of the economy through large state-owned enterprises and the banking system. The launch of the State Capital Investment Corporation at the end of 2005 is intended to make state-owned enterprises operate more competitively. The government has plans to reform key sectors and privatize state-owned enterprises, but implementation has been gradual. Greater emphasis on private sector development is critical for job creation. Urban unemployment has been rising in recent years, and rural unemployment, estimated to be between 25% and 35% during non-harvest periods, is already at critical levels.

The December 10, 2001, entry-into-force of the Bilateral Trade Agreement (BTA) between the U.S. and Vietnam was a significant milestone for Vietnam’s economy and for normalization of U.S.-Vietnam relations. Implementation of this agreement, which includes provisions on trade in goods, trade in services, enforcement of intellectual property rights, protection for investments, and transparency, fundamentally changed Vietnam’s trade regime and helped liberalize its economy. By virtue of the BTA, normal trade relations (NTR) status was accorded to Vietnam on a conditional basis. Bilateral trade between the two countries expanded dramatically, rising more than five-fold from 2001 to $7.69 billion in 2005.

By requiring a range of reforms to Vietnam’s trade and investment regime, the BTA also helped Vietnam prepare for the next major step in its integration into the world economy: membership in the WTO. Following the conclusion of bilateral negotiations with interested WTO members and completion of multilateral negotiations in 2006, the WTO General Council approved the terms for Vietnam’s membership on November 7, 2006. Vietnam formally acceded to the WTO as its 150th member on January 11, 2007. Vietnam was granted unconditional normal trade relations (NTR) status by the United States through a Presidential Proclamation signed by President Bush on December 29, 2006. On January 11, 2007 the United States removed the application of quotas on textile and apparel imports from Vietnam consistent with the terms of our WTO bilateral market access agreement and treatment provided other WTO members. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations. As a result, foreign investors and those seeking to sell goods and services to the increasingly affluent Vietnamese population will benefit from the improved legislative framework and lower trade barriers. Local firms that have heretofore enjoyed a range of protections, meanwhile, will experience increased competition. As 2006 drew to a close, the Government of Vietnam reasserted its goal of becoming a middle-income country by 2010. That would entail raising the average per capita income to at least $1,000 from the 2005 average of $638. Economic analysts, including those at the World Bank, believe that this goal is attainable.