Economy

Since the end of the Cold War and the collapse of the USSR in 1991 Vietnam has been moving quite successful from a planned to a market industry. Enormous increases in export earnings and massive state investment combined with a high level of political and social stability led to a robust growth (GDP: +7.6% p.a. between 1990 and 2000).

The Vietnamese economy is still largely influenced by the state and fundamental structural reform is needed, but nonetheless the country can be considered as an emerging market with favourable short to medium-term prospects. This is clearly documented by the country’s growth rates. So in 2002 the industrial sector increased by 14,5%, while the service sector has grown between 5 and 6% in recent years.

The volume of exports still rises as well (2002: +3.4%), but the country has to struggle with the negative price development on world markets. The most important export item is crude oil (profits in 2002 of EUR 3,45 billion), followed by textiles/clothing and fish. Moreover Vietnam is the world's second largest exporter of rice and coffee. The main export countries are the EU, Japan, China and the US, the export share amounts to 44% of GDP.

Due to the country’s political stability and the educational system, that generates relatively well trained and motivated personnel, Vietnam is very attractive to foreign investors. The United Nations Conference on Trade and Development (UNCTAD) listed Vietnam in the World Development Report 2002 as one of the five best economies for foreign direct investment in Asia.

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Development cooperation

Since the cooperation was resumed in 1990, Vietnam has been one of the focus countries of German development cooperation. Germany - as Vietnam's third largest bilateral donor – made available about EUR 500 million since then, which makes Vietnam the third largest recipient country in Asia behind China and India. The focal points of the cooperation are:

• support for economic reform
• vocational training,
• protection and sustainable use of natural resources
• health, family planning and HIV/AIDS prevention

In the context of the “Program of Action 2015” Vietnam is one out of four focal countries identified by the German government in recognition of the country’s special efforts to reduce poverty. The cooperation aims at reforms of the economic, legal and financial system and the development of the private sector. This implies, among other things, “advice to small and medium-sized enterprises (SME) in Vietnam as they engage in partnerships with European companies, and support is provided to institutions for the enhancement of SMEs which offer training in business management”.