The United States’ complete lifting of the decade-long embargo on arms sales to Vietnam marked a historic milestone in US–Vietnam relations, paving the way for a strategic partnership between the two former foes. So what will this mean for Vietnamese security and domestic politics?
Vietnam has transformed from one of the world’s poorest countries to a lower middle-income economy in just 25 years. Beginning in 1986, Vietnam undertook key structural reforms in various areas, including state-owned enterprise (SOE) reform, private sector development, financial reform, public expenditure management and trade liberalisation.
The World Bank predicts that Vietnam could be at the same income level that Malaysia is today by 2035 if the government embraced a number of further structural and institutional reforms.
The biggest macroeconomic challenge facing Vietnam today is sustaining growth. Most doi moi-era growth has resulted either from efficiency gains associated with the introduction of a market economy (opening domestic markets and trade, relaxing restrictions on labour movement and land transactions) or from expanded endowments of low-skill labour and capital. GDP continues to grow at a very respectable rate, albeit lower than that projected in national planning documents.
After many years of slow growth and stagnation, the last couple of years have seen a significant boom in car sales in Vietnam. The country most known for its staggering motorbike population now appears to be rapidly heading for the age of the automobile. What has caused this change of fortunes for the auto industry, and will this new trend create a strong domestic auto industry in Vietnam?
Vietnam has announced a bold new higher education reform agenda. The government of Vietnam will offer up to 10,000 government scholarships for overseas doctoral study between 2014 and 2020 (or 1300–1500 per year) to tertiary and research institute staff. The so-called 911 Project will also offer scholarships to qualified non-academic professionals committed to tertiary teaching careers.
The World Trade Organization (WTO) recently released its “World Trade 2016 and Prospects 2016” report. In it, the only nation to achieve “impressive” import-export growth in 2015 was a surprising Southeast Asian nation: Vietnam.
The report analyzed the performance of 30 of the leading import-export economies of the world that are members of the WTO. None of the other nations reviewed showed results for import-export growth last year that were as high as Vietnam’s.
In late January 2016, the Vietnamese Communist Party (VCP) held its 12th National Congress to select leaders and set policy guidelines for the next five years. Although every VCP congress is a time of intense power struggles, the 12th Congress was especially partisan. Never before has politics in Vietnam been so reduced to the choice between two individuals.
Vietnam will hold its parliamentary election in May 2016. The three key positions of president, prime minister and chairperson of the National Assembly will all be elected. However, perhaps the most interesting aspect of this election is the emerging group of self-nominated candidates. This election, around 30 civil society activists are running for the Communist Party of Vietnam (CPV) controlled National Assembly.
The Doi Moi (renovation) policy initiated by the Communist Party of Vietnam (CPV) in 1986 transformed Vietnam’s economy at the time. However, the 30-year-old Doi Moi policies have long run out of steam. If Vietnam wants to catch up with other more advanced countries in Southeast Asia, it must embark on another Doi Moi aimed at liberalising the country’s political, as well as economic, structures.
After one of the most highly contested Vietnamese Communist Party (VCP) elections to date, the incumbent General Secretary Nguyen Phu Trong was re-elected to the top post of the Vietnamese regime in late January. However, victory in the elections is just the first challenge in Trong’s five-year term. The next major challenge for the new leader will be managing the relationship with China.
