Original publication: October 2018
Author: Priit Ojamaa, Research Administrator
Short link to this post: http://bit.ly/2OZW28g
Available languages:

Introduction to Vietnam

Vietnam is a densely populated developing country that has been transitioning since 1986 from the rigidities of a centrally planned, highly agrarian economy to a more industrial and market based economy, and it has raised incomes substantially. The Doi Moi (renovation) process started in 1986 with the following main aims:

  1. Shifting from a planned centralized economy based on public ownership to a multi-sector economy based on the market;
  2. Democratizing social life by building a state on the basis of the rule of law;
  3. Strengthening external cooperation with other countries.

Vietnam has a young population, stable political system, commitment to sustainable growth, relatively low inflation, stable currency, strong FDI inflows, and strong manufacturing sector. In addition, the country is committed to continuing its global economic integration via multilateral and bilateral arrangements. Vietnam joined the WTO in January 2007 and concluded several free trade agreements in 2015-16, including the EU-Vietnam Free Trade Agreement (which the EU has not yet ratified), the Korean Free Trade Agreement, and the Eurasian Economic Union Free Trade Agreement and it is member of the Association of Southeast Asian Nations (ASEAN) since 1995. In 2017. Seeking to diversify its opportunities, Vietnam also signed the Comprehensive and Progressive Agreement for the Transpacific Partnership[1] in 2018 and continued to pursue the Regional Comprehensive Economic Partnership[2].

Current challenges are to continue its trajectory of strong economic growth.  The government acknowledges the need to spark a ’second wave’ of reforms, including reforming state-owned-enterprises, reducing red tape, increasing business sector transparency, reducing the level of non-performing loans in the banking sector, and increasing financial sector transparency. Vietnam’s public debt to GDP ratio is nearing the government-mandated ceiling of 65%.

Based on the United Nations Millennium Development Goals (MDGs) and the country’s own aspirations, Vietnam has established its own 12 development goals (referred to as Vietnam’s Development Goals or VDGs), which include social and poverty reduction targets. About 90 percent of the poor live in rural areas. Poverty still affects close to 15 per cent of Vietnamese people, including around 50 per cent of the ethnic minority population.  (UN 2009, GSO 2010).

Vietnam has done better than expected in human development terms in recent decades, says the 2013 Human Development Report (HDR). According to the global report of the UN Development Programme, Vietnam’s human development progress has increased by 41 percent in the past two decades. In 2012, Vietnam ranked 127th out of 187 countries – which is in the ‘medium’ category of human development. The new Vietnam’s Socio-Economic Development Strategy (SEDS) aims to

establish the foundations for Vietnam to become a modern, industrialized country by 2020.  The country is firmly on that track. Vietnam exceeded its 2017 GDP growth target of 6.7% with growth of 6.8%, primarily due to increases in domestic demand, and strong manufacturing exports. The recent successive GDP – real growth rates are also impressive:

  • 8% (2017)
  • 2% (2016)
  • 7% (2015)

GDP (purchasing power parity) is $647.4 billion (2017) and GDP (official exchange rate): is $220.4 billion (2017) in 2017 dollars positioning it 36th country by comparison to the world.The trade surplus, in 2017, remained stable to around the same level as in 2016, namely representing 2.9% of the country’s GDP. Inflation levels increased to 4.4% in 2017 from 2.7% in 2016 and there are concerns over more inflationary pressures due to increasing wage growth (World Bank, 2018).

Looking forward to the next 5-10 years, the UN sees the need to consolidate the gains made to date, in order to ensure sustainable recovery, broad-based and inclusive growth, and greater social inclusion.

Geographical location and population

Vietnam is located in Southeast Asia on the eastern Indochina Peninsula and covers a total area of 331,210 km2 (comparable to Germany e.g.). With a population just over 93.6 million in 2017, Vietnam is the eighth-most-populous Asian country and ranks 15th worldwide. Vietnam’s average annual population growth rate was 1.2% between 1999 and 2009, down from 1.7% in the previous 10 years.

Figure 1: Map of VietnamAlthough Vietnam has one of the highest population densities in the world, the population is not evenly dispersed; clustering is heaviest along the South China Sea and Gulf of Tonkin, with the Mekong Delta (in the South) and the Red River Valley (in the North) having the largest concentrations of people.  In these areas, agriculture has been a key contributor to the overall economy, in which the flat and fertile river deltas such as the Red River Delta in the North and the Mekong River Delta in southern Vietnam play an important role.

Urban population makes up 35.9% of total population (2018) and is growing at an annual rate of urbanization: 2.98% annual rate of change (2015-20 est.). The urbanisation rate although high is down from 3.4% of the previous decade (Vietnam General Statistics Office 2010, United Nations 2010).

Major urban areas are Ho Chi Minh City 8.145 million; Da Nang 1.444 million; Hai Phong 1.219 million; Can Tho 1.175 million; Haiphong 1.075 million; HANOI (capital) 1.064 million (2018).

Vietnam has 64 cities and provinces. Hanoi in the north is the capital city with the population of approximately 6.45 million people while Ho Chi Minh City in the south is the largest urban area, with a population estimated at 7.16 million. The Mekong River Delta is one of the most highly productive and densely populated regions of Vietnam. There are 54 different ethnic groups in the country. (Vietnam General Statistics Office, 2010).

Vietnam is prone to natural disasters, including typhoons, storms, floods, droughts, mudslides, and forest fires, with the poorest people in society the most vulnerable. More than one million people require emergency relief each year. At the same time, climate change models predict that that Vietnam will be one worst affected countries globally.

Current political situation

The Vietnam’s National Day (Vietnamese: Ngày Quốc Khánh) is observed on 2 September, commemorating President Hồ Chí Minh reading the Declarations of independence of Vietnam at Ba Đình Square in Hanoi on 2 September 1945.

The Socialist Republic of Vietnam is a one-party socialist republic ruled by the Communist Party of Vietnam. The President of Vietnam is head of state and the Prime Minister of Vietnam is the head of the government. The government and the President of Vietnam carry out the executive power. The National Assembly of Vietnam is the legislator. The judiciary power is independent from the executive branch. The current Constitution of Vietnam dates from 15 April 1992 and it has since been amended one time.

The centralization of political power by the government has brought stability over the past forty years. This certainly is one of the factors, driving the foreign investment inflows to Vietnam.

Elections and appointments to executive posts:

The president is indirectly elected by National Assembly from among its members for a single 5-year term; election last held on 2 April 2016 (next to be held in spring 2021).

The prime minister is appointed by the president from among members of the National Assembly, confirmed by National Assembly.

The Deputy prime ministers appointed by the prime minister, confirmed by National Assembly.

Cabinet: Cabinet proposed by prime minister, appointed by the president, and confirmed by the National Assembly.

  • Chief of state: President Tran Dai QUANG (deceased 21.September 2018);
  • Vice President now President: Dang Thi Ngoc THINH (since 7 April 2016)
  • Head of Government: Prime Minister Nguyen Xuan PHUC (since 7 April 2016);
  • Deputy Prime Ministers:
  1. Truong Hoa BINH (since 9 April 2016),
  2. Vuong Dinh HUE (since 9 April 2016),
  3. Vu Duc DAM (since 13 November 2013),
  4. Trinh Dinh DUNG (since 9 April 2016),
  5. Pham Binh MINH (since 13 November 2013)

Legislative branch: the unicameral National Assembly or Quoc Hoi (500 seats; members directly elected by absolute majority vote with a second round if needed; members serve 5-year terms). Last election were held on 22 May 2016 (next to be held in May 2021)

Judicial branch: high court(s): Supreme People’s Court (consists of the chief justice and 13 judges). Chief justice is elected by the National Assembly on the recommendation of the president for a 5-year, renewable term; other judges appointed by the president for 5-year terms.

Subordinate courts: Court of Appeals; administrative, civil, criminal, economic, and labour courts; Central Military Court; People’s Special Courts; note – the National Assembly can establish special tribunals.[3]

Economic overview of the fisheries sector

Agricultural exports represent nearly 8.5% of total exporting value, constituting an important source of income for the country. Among those, the export of products of fisheries and aquaculture is the most important covering almost ¼ of total exporting agricultural value, mainly concerning exports of frozen or fresh shrimps and prawns and fish such as pangasius , tilapia and tuna.

The traditional fishing activity in Vietnam can be described as in-shore (rivers and lagoons and up to 4-5 nm from the coast) and coastal fishing along its 3260 km coastline.  The relatively recent development of offshore fisheries was driven by the country’s political aspirations to elevate itself to a status of regional maritime power.[4] (Fau, 2015).

This off-shore fisheries development goal was set in 2007 (Vietnam’s Maritime Strategy Toward the year 2020) which follows up from the Program on Offshore Fishing of 1997. The latter aimed at transition from coastal artisanal and family fishing towards professional off-shore fishing.  The in-shore fisheries represented about 70% of the catches in the beginning of the millennium, but by the end of the first decade, the offshore fisheries had caught up representing half of the catches.  (Le Hong Hiep 2014). The changes include an increase in vessel size and the professionalization of fishers[5].

This development has produced spectacular results: In 2014, Vietnam took over Thailand as the leading Southeast Asian exporter in terms of value, but was temporarily overtaken by India in 2017.  According to the 2016 report of the Food and Agriculture Organisation of the United Nations (FAO), Vietnam is the third largest exporter worldwide after China and Norway before Thailand and India. In a decade (2004- 2014), the export value has risen threefold from 2,444 billion USD in 2004 to 8,029 billion USD in 2014, giving an annual growth rate of 12.6 % (FAO 2016). The table below is 2017 FAO source indicating a lower value for exports.

Table 1: Vietnam fish and fisheries products stats.


[1]        The TPP was signed on 4 February 2016, but never entered into force as a result of the withdrawal of the United States. The formal signing ceremony was held on 8 March 2018 in Santiago, Chile. The agreement enters into effect 60 days after ratification by at least 50% of the signatories (six of the eleven participating countries), with three countries having ratified as of 18 July 2018.

[2]        The Regional Comprehensive Economic Partnership (RCEP) is a so-called mega-regional economic agreement being negotiated since 2012 between the 10 ASEAN (Association of South-East Asian Nations) governments and their six FTA partners: Australia, China, India, Japan, New Zealand and South Korea.
RCEP is largely driven by ASEAN. It is reported that a broad agreement is likely to be reached in November 2018.
[3]         https://www.cia.gov/library/publications/the-world-factbook/geos/vm.html
[4]       Fau, N. (2015). La maritimisation de l ’ économie vietnamienne : un facteur exacerbant les conflits entre le Viêt Nam et la Chine en mer de Chine méridionale ? Herodote, 2(157), 39–55. doi:10.3917/her.157.0039
[5]       Impacts du changement climatique sur la pêche hauturière vietnamienne / François Gemenne, Note d’Analyse n° 1, Ministère de la Défense, Observatoire Défense et Climat, mars 2017, 30 p.

Link to the full publication: http://bit.ly/629-175

Please give us your feedback on this publication

This slideshow requires JavaScript.


Leave a Reply

%d bloggers like this: