Ha Noi (VNA) – Viet Nam attained many fruitful achievements, both in economic growth and poverty reduction in 2007, which international economists attributed to the country’s continuous renewal process rather than its joining the World Trade Organisation (WTO) on November 7, 2006.
Together with a steady growth rate of 8.5 percent, Viet Nam saw a further drop of poor households to 14.7 percent in 2007 from 18 percent in 2006.
The overall outlook for Viet Nam today is quite different with the economy remaining resilient despite a series of shocks, World Bank Country Director Ajay Chhibber said, adding that the country has managed to achieve inclusive growth while avoiding the kind of inequality that has plagued other countries as they moved from a planned to a market economy.
WTO – a landmark in the renewal process
Viet Nam has steadily been put on the radius screen of world investors, with foreign direct investment commitment in 2007 hitting a record high of 20.3 billion USD. Its economic structure has moved strongly towards a market model, with the share of industry and service sectors in the GDP climbing to 10.6 and 8.7 percent, respectively.
“It is not like because of WTO accession this year, things have suddenly changed overnight,” Asian Development Bank Country Director Ayumi Konishi told a Viet Nam News Agency reporter prior to a one-year anniversary of the country’s joining the world largest trade body.
“WTO accession is only one of the milestones, Viet Nam’s economic reforms started 21 years ago as “doi moi” and since then Viet Nam has been continuously reforming its economy,” he added.
According to the ADB country director, it is appreciable that Viet Nam has gradually introduced market principles, step by step opening up its economy. Even before joining the WTO, Viet Nam’s trade turnover accounted for close to 140 percent of the GDP during the 2004-2006 period.
WTO means not only increased trade for Viet Nam , but what is more important, it indicates progresses in domestic economic policies. ADB Country Director Konishi highlighted that adoption of the Investment Law and the Enterprise Law is the right step Viet Nam has taken to phase out unequal treatment between state-owned and private companies, as well as foreign and domestic firms.
Maintaining strong impetus for economic growth
The ADB representative said he believes Viet Nam will continue to integrate deeper into the world economy and maintain the 8.5 percent growth rate in 2008.
“I am certainly a strong believer that Viet Nam will probably reach that middle income country level in 2009, and then keeps trying to become an industrialised nation by 2020. In order to really meet that goal, Viet Nam needs to further opening up beyond what is had promised under the WTO,” Konishi stressed.
Meanwhile, WB Country Director Ajay Chhibber saw Viet Nam’s entrance into the WTO as a vehicle of opportunities for Vietnamese exporters to gain new footholds in markets that were previously closed to them.
He noted that Viet Nam has reduced tariffs on imported goods under the WTO commitments, yet this has turned out to help the country get easier access to foreign markets abroad, allowing Vietnamese manufacturers to earn better incomes and build stronger businesses.
“Viet Nam is already on a sustainable growth path and is leveraging off the advantages conferred by WTO membership. Growth has averaged 8 percent for five years now and membership of the WTO is assisting with that growth. The next 10 years should see profound advances in Viet Nam’s economy with respect to poverty reduction and economic advancement,” he said.