Review of Business and Economics Studies, 2016, том 4, № 3

Review of 
Business and
Economics 
Studies

EDITOR-IN-CHIEF
Prof. Alexander Ilyinsky
Dean, International Finance Faculty, 
Financial University, Moscow, Russia
ailyinsky@fa.ru 

EXECUTIVE EDITOR
Dr. Zbigniew Mierzwa

EDITORIAL BOARD

Dr. Mark Aleksanyan
Adam Smith Business School, 
The Business School, University 
of Glasgow, UK

Prof. Edoardo Croci
Research Director, IEFE Centre for 
Research on Energy and Environmental 
Economics and Policy, Università 
Bocconi, Italy

Prof. Moorad Choudhry
Dept.of Mathematical Sciences, Brunel 
University, UK

Prof. David Dickinson 
Department of Economics, Birmingham 
Business School, University of 
Birmingham, UK

Prof. Chien-Te Fan
Institute of Law for Science and 
Technology, National Tsing Hua 
University, Taiwan

Prof. Wing M. Fok
Director, Asia Business Studies, College 
of Business, Loyola University New 
Orleans, USA

Prof. Konstantin P. Gluschenko
Faculty of Economics, Novosibirsk State 
University, Russia

Prof. George E. Halkos
Associate Editor in Environment and 
Development Economics, Cambridge 
University Press; Director of Operations 
Research Laboratory, University of 
Thessaly, Greece

Dr. Christopher A. Hartwell
President, CASE — Center for Social and 
Economic Research, Warsaw, Poland

Prof. S. Jaimungal
Associate Chair of Graduate 
Studies, Dept. Statistical Sciences 
& Mathematical Finance Program, 
University of Toronto, Canada

Prof. Bartlomiej Kaminski
University of Maryland, USA; 

Rzeszow University of Information 
Technology and Management, 
Poland

Prof. Vladimir Kvint 
Chair of Financial Strategy, Moscow 
School of Economics, Moscow State 
University, Russia

Prof. Alexander Melnikov 
Department of Mathematical and 
Statistical Sciences, University of 
Alberta, Canada

Prof. George Kleiner
Deputy Director, Central Economics and 
Mathematics Institute, Russian Academy 
of Sciences, Russia

Prof. Kwok Kwong
Director, Asian Pacifi c Business 
Institute, California State University, 
Los Angeles, USA

Prof. Dimitrios Mavrakis
Director, Energy Policy and 
Development Centre, National and 
Kapodistrian University of Athens, 
Greece

Prof. Steve McGuire
Director, Entrepreneurship Institute, 
California State University, 
Los Angeles, USA

Prof. Rustem Nureev
Head of the Department of Economic 
Theory, Financial University, 
Russia

Dr. Oleg V. Pavlov
Associate Professor of Economics and 
System Dynamics, Department of Social 
Science and Policy Studies, Worcester 
Polytechnic Institute, USA

Prof. Boris Porfi riev
Deputy Director, Institute of Economic 
Forecasting, Russian Academy of 
Sciences, Russia

Prof. Svetlozar T. Rachev
Professor of Finance, College of 
Business, Stony Brook University, USA

Prof. Boris Rubtsov
Deputy chairman of Department 
of fi nancial markets and banks for R&D, 
Financial University, Russia

Dr. Minghao Shen
Dean, Center for Cantonese Merchants 
Research, Guangdong University of 
Foreign Studies, China

Prof. Dmitry Sorokin
Chairman for Research, Financial 
University, Russia

Prof. Robert L. Tang
Vice Chancellor for Academic, De La 
Salle College of Saint Benilde, Manila, 
The Philippines

Dr. Dimitrios Tsomocos 
Saïd Business School, Fellow in 
Management, University of Oxford; 
Senior Research Associate, Financial 
Markets Group, London School 
of Economics, UK

Prof. Sun Xiaoqin
Dean, Graduate School of Business, 
Guangdong University of Foreign 
Studies, China

REVIEW OF BUSINESS 
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ISSN 2308-944X

Вестник
исследований
бизнеса 
и экономики

ГЛАВНЫЙ РЕДАКТОР
А.И. Ильинский, профессор, декан 
Международного финансо вого факультета Финансового университета 

ВЫПУСКАЮЩИЙ РЕДАКТОР
Збигнев Межва, д-р экон. наук

РЕДАКЦИОННЫЙ СОВЕТ

М.М. Алексанян, профессор Бизнесшколы им. Адама Смита, Университет 
Глазго (Великобритания)

К. Вонг, профессор, директор Института азиатско-тихоокеанского бизнеса 
Университета штата Калифорния, 
Лос-Анджелес (США)

К.П. Глущенко, профессор экономического факультета Новосибирского 
госуниверситета

С. Джеимангал, профессор Департамента статистики и математических финансов Университета Торонто 
(Канада)

Д. Дикинсон, профессор Департамента экономики Бирмингемской бизнесшколы, Бирмингемский университет 
(Великобритания)

Б. Каминский, профессор, 
Мэрилендский университет (США); 
Университет информационных 
технологий и менеджмента в Жешуве 
(Польша)

В.Л. Квинт, заведующий кафедрой 
финансовой стратегии Московской 
школы экономики МГУ, профессор 
Школы бизнеса Лассальского университета (США)

Г. Б. Клейнер, профессор, член-корреспондент РАН, заместитель директора Центрального экономико-математического института РАН

Э. Крочи, профессор, директор по 
научной работе Центра исследований 
в области энергетики и экономики 
окружающей среды Университета 
Боккони (Италия)

Д. Мавракис, профессор, 
директор Центра политики 
и развития энергетики 
Национального университета 
Афин (Греция)

С. Макгвайр, профессор, директор Института предпринимательства 
Университета штата Калифорния, 
Лос-Анджелес (США)

А. Мельников, профессор 
Депар та мента математических 
и ста тистических исследований 
Университета провинции Альберта 
(Канада)

Р.М. Нуреев, профессор, руководитель Департамента экономической 
теории Финансового университета

О.В. Павлов, профессор 
Депар та мента по литологии 
и полити ческих исследований 
Ворчестерского политехнического 
института (США) 

Б.Н. Порфирьев, профессор, 
член-корреспондент РАН, заместитель директора Института 
народнохозяйственного прогнозирования РАН

С. Рачев, профессор Бизнес-колледжа Университета Стони Брук 
(США) 

Б.Б. Рубцов, профессор, заместитель 
руководителя Департамента финансовых рынков и банков по НИР 
Финансового университета

Д.Е. Сорокин, профессор, членкорреспондент РАН, научный 
руководитель Финансового 
университета

Р. Тан, профессор, проректор 
Колледжа Де Ла Саль Св. Бенильды 
(Филиппины) 

Д. Тсомокос, Оксфордский университет, старший научный сотрудник 
Лондонской школы экономики 
(Великобритания)

Ч.Т. Фан, профессор, Институт 
права в области науки и технологии, 
национальный университет Цин Хуа 
(Тайвань)

В. Фок, профессор, директор по 
исследованиям азиатского бизнеса Бизнес-колледжа Университета 
Лойола (США)

Д.Е. Халкос, профессор, Университет 
Фессалии (Греция)

К.А. Хартвелл, президент Центра 
социальных и экономических исследований CASE (Польша)

М. Чудри, профессор, Университет 
Брунеля (Великобритания)

Сун Цяокин, профессор, декан Высшей школы бизнеса Гуандунского 
университета зарубежных исследований (КНР)

М. Шен, декан Центра кантонских 
рыночных исследований Гуандунского университета (КНР)

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CONTENTS

Vietnam — little ‘tiger’ with big possibilities

Zbigniew Mierzwa  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Impacts of monetary policy on asset markets:

The case of Vietnam

Thanh Nhan Nguyen, Hai Yen Vu and Ngoc Huong Vu  . . . . . . . . . . . . . . . . . . . . . . . . .39

Semi-strong form effi ciency: Market reaction 

to dividend and earnings announcements 

in Vietnam stock exchange

Tran Thi Xuan Anh, Nguyen Thanh Phuong, Pham Tien Manh  . . . . . . . . . . . . . . . . . .53

Organizational aspects of the internal audit 

of Italian corporate groups

Alessandra Tafuro, Antonio Costa, Alma Fanelli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

* Note. Coautor of article “Secrets and perspectives of Uzbekistan’s industrial policy”, Review of Business and Economics Study, 
No 1/2016 is Anis Chowdhury.

Review of 
Business and 
Economics 
Studies

Volume 4, Number 3, 2016

Вестник
исследований
бизнеса 
и экономики

№ 3, 2016

CОДЕРЖАНИЕ

Вьетнам – малый «тигр» с большими возможностями

Збигнев Межва . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Влияние монетарной политики

на рынки активов: пример Вьетнама

Tхань Нан Нгуен, Хай Иен Ву, Нгоц Хуонг Ву  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Средняя степень эффективности рынка:

реакция рынка на сообщения о дивидендах 

и доходах на бирже ценных бумаг во Вьетнаме

Тран Тхи Хуан Ань, Нгуен Тхань Пхуонг, Пхам Тиен Мань . . . . . . . . . . . . . . . . . . . .53

Организационные аспекты внутреннего аудита

в итальянских корпоративных группах

Алессандра Тафуро, Антонио Коста, Альма Фанелли . . . . . . . . . . . . . . . . . . . . . . .68

* Примечание. Соавтором стати «Секреты и перспективы промышленной политики Узбекистана», Review of Business and Economics Study, № 1/2016 является Анис Ховдури.

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

Vietnam–little ‘tiger’ with big possibilities

Zbigniew Mierzwa, 
PhD in economics, Financial University, Moscow, Russia
zemezhva@fa.ru

Abstract. In the fi rst issue of journal (1/2016) we said we are convinced that Russia is not alone in the 
world. Thus, the theme of our inquiry will be searching for friendly-oriented countries—economically 
and politically as well. In the second part of our inquiry, we present the success story of Vietnam. 
Country’s transition from low- income to middle-income countries per capita was amazing. Vietnam 
is placed among those countries with the best indicators of economically sustainable and politically 
friendly-oriented countries. Russia and Vietnam are connected with strategic partnership but it is 
insuffi cient for further development of economic relationships. It is urgent need to intensify the 
penetration Vietnamese market, searching for mutually benefi cial partnership and long-lasting 
cooperation.

Keywords: Vietnam, World Bank, World Economic Outlook, Asian Development Bank.

Вьетнам — малый «тигр»
 с большими возможностями

Збигнев Межва, 
д-р экон. наук, Финансовый университет, Москва, Россия

Аннотация. В № 1/2016 журнала в статье «Россия в поисках дружественно ориентированных 
стран» были поставлены вопросы: какие страны из числа дружелюбно относящихся к России 
сегодня можно рассматривать в качестве ее потенциальных партнеров; какие критерии 
необходимы для этого выбора? Учитывая неиспользованные пока возможности для плодотворного 
сотрудничества, наш выбор пал на одно из наиболее динамично развивающихся государств — 
Вьетнам. В статье представлен обзор социально-экономического развития Вьетнама и планы 
на ближайшую и дальнейшую перспективу. По нашему мнению, Вьетнам является надежным 
экономическим партнером, о чем свидетельствует растущий интерес к этой стране международных 
организаций и ряда стран. Поскольку свято место пусто не бывает — не упустить бы России этот 
шанс. Тем более что Вьетнам традиционно принадлежит к странам политически дружелюбным 
по отношению к России. Стратегическое партнерство с Вьетнамом требует и всесторонней 
интенсификации экономических отношений.

Ключевые слова: Вьетнам, World Bank, World Economic Outlook, Asian Development Bank.

Vietnam is a development success story. After 30 years of political and economic reforms 
since the launch of Đôi Mói (renovation) in 
1986, have transformed the country from one 
of the poorest in the world, with per capita income around US $ 100, to lower middle income 

status within a quarter of a century with per 
capita income of around US$ 2,100 by the end 
of 2015. From a poor, war-ravaged, centrally 
planned economy, which was closed off from 
much of the outside world, Vietnam has become 
a middle-income country with a dynamic mar

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

ket economy that is deeply integrated into the 
global economy1.
Vietnam’s economic growth has been increasing since 2011, while inflation has remained in single digits. Well-balanced macroeconomic policies have helped restore stability 
and investor confi dence, with growth being propelled by a surge in foreign direct investment 
and export-oriented manufacturing. Vietnam 
needs to continue to develop a more dynamic 
market economy — one that can compete globally and deliver sustainable, equitable growth 
over the long term. Despite remarkable achievements in reducing poverty, serious development 
challenges remain, with income and other socioeconomic gaps still evident in pockets of ethnic 
minorities and other vulnerable groups.
Vietnam’s per capita GDP growth since 1990 
has been among the fastest in the world, averaging 5.5 percent a year since 1990, and 6.4 
percent per year in the 2000s. Vietnam’s economy continued to strengthen in 2015, with GDP 
growth rate of 6.7 percent for the whole year. 
Social outcomes have improved dramatically 
across the board. Using the US$ 1.90 2011 PPP 
line, the fraction of people living in extreme 
poverty dropped from more than 50 percent in 
the early 1990s to 3 percent today. Concerns 
about poverty are now focused on the 15 percent of the population who are members of ethnic minority groups, but account for more than 
half the poor.
Vietnam’s economic growth has not only 
been rapid, but also stable and inclusive, translating into strong welfare gains for the vast majority of the population. This is an impressive 
record of success — one that the Vietnamese 
people take justifi able pride in, while appreciating the support of the international community.
Regarding the twin goals of eliminating extreme poverty (living on less than US$ 1.25 
per day) by 2030 and boosting shared prosper
1 See: “Overall strategy for international integration through 
2020, vision to 2030” (Part I, Part II, Part III). Approved on 
January 7, 2016 by VGP — PM Nguyen Tan Dung.
See also: “The Socio-Economic Development Plan 2016–20” 
(forthcoming, draft available) and “The Socio-Economic Development Strategy 2021–30”, “Viet Nam Sustainable Development Strategy for 2011–2020”. Decision No. 432/QD-TTg on approving the Viet Nam Sustainable Development Strategy for the 
2011–2020 signed on April 12, 2012 by Prime Minister Nguyen 
Tan Dung.

ity among the poorest 40 percent in developing countries, Vietnam is a signature example 
of a country in recent times that has achieved 
rapid growth without a large increase in inequality. Thus, in Vietnam, the twin goals agenda 
suggests enhanced attention to four priority 
themes:
(i) supporting return to strong and inclusive 
growth;
(ii) giving more focused attention to non-income dimensions of poverty;
(iii) targeting communities that are getting 
left behind, notably ethnic minority communities; and
(iv) addressing sources of vulnerability.
The recent Vietnam Development Partnership Forum (VDPF) 2015 agreed on the need 
to strengthen reform efforts, competitiveness, 
citizens’ participation, the broader inclusion 
agenda, the unfinished poverty agenda — particularly relating to ethnic minorities — and the 
increasing vulnerability of a growing number of 
people who live close to the poverty line. The 
2015 VDPF also discussed the effective use and 
mobilization of development resources, which 
to some extent depend on implementing market 
institutions reforms. The VDFP, co-organized by 
the Ministry of Planning and Investment and the 
World Bank, is a platform for high level dialogue 
between the Government of Vietnam and Development Partners.
The World Bank forecasts are frequently updated based on new information and changing 
(global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic 
assessments of countries’ prospects do not signifi cantly differ at any given moment in time.
a. GDP at market prices and expenditure components are measured in constant 2010 U. S. dollars. Excludes American Samoa and Democratic 
People’s Republic of Korea.
b. Non-oil GDP. Timor-Leste’s total GDP, including the oil economy, is roughly four times 
the non-oil economy, and highly volatile, sensitive to changes in global oil prices and local production levels.
http://www.worldbank.org/en/publication/global-economic-prospects
But 30 years of success from reforms raises 
expectations for the future. The country’s am

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

bitions are aptly captured in the Vietnamese 
constitution, which sets the goal of “a prosperous people and a strong, democratic, equitable, 
and civilized country.” There is a fi rm aspiration that by 2035, Vietnam will be a modern 
and industrialized nation moving toward becoming a prosperous, creative, equitable, and 
democratic society.
Not only are incomes higher, but the Vietnamese population is better educated and has a 

higher life expectancy than most countries with 
a similar per capita income. The maternal mortality ratio has dropped below the upper-middle-income country average, while under-five 
mortality rate has fallen by half, to a rate slightly 
above that average. Access to basic infrastructure has also improved substantially. Electricity is now available to almost all households, 
up from less than half in 1993. Access to clean 
water and modern sanitation has risen from less 

Table 1. GDP growth in Vietnam 1986–2015

(constant LCU)

Indicator Name
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995

GDP growth 
(annual %) 
2.79
3.58
5.14
7.36
5.10
5.96
8.65
8.07
8.84
9.54

GDP per capita growth 
(annual %) 
0.43
1.07
2.62
4.86
3.12
4.03
6.73
6.22
7.03
7.76

Indicator Name
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005

GDP growth 
(annual %) 
9.34
8.15
5.76
4.77
6.79
6.19
6.32
6.90
7.54
7.55

GDP per capita growth 
(annual %) 
7.61
6.48
4.15
3.21
5.37
4.86
5.10
5.66
6.26
6.30

Indicator Name
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

GDP growth 
(annual %) 
6.98
7.13
5.66
5.40
6.42
6.24
5.25
5.42
5.98
6.68

GDP per capita growth 
(annual %) 
5.80
5.98
4.54
4.29
5.31
5.12
4.12
4.31
4.85
5.55

Source: The World Bank. World Development Indicators, 22 July, 2016.

Figure 1. Vietnam’s GDP growth rate

Source: www.tradingeconomics.com/General Statistics Offi ce of Vietnam.

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

than 50 percent of all households to more than 
75 percent.
In addition to the elaboration of three SEDS 
breakthrough areas, the five-year Socio-Economic Development Plan 2011–2015 focused 
on three critical restructuring areas — the banking sector, state-owned enterprises and public investment. The recent draft of the SEDP 
2016–2020 acknowledges the slow progress of 
the reform priorities of the SEDP 2011–2015 
and emphasizes the need to accelerate these reforms in 2016–2020 to achieve the targets set in 
the 10-year “Viet Nam Sustainable Development 
Strategy for 2011–2020.”
Vietnam also faces an unfinished economic 
modernization and structural transformation 
agenda. Part of this relates to maximizing the 
gains from the ongoing structural transformations that have been a major contributor to 
growth since the early 2000s.
With agriculture still accounting for almost half 
the labor force and with signifi cantly lower labor 
productivity than in the industry and services sectors, future gains from structural transformation 
could be substantial. The transformation from 

state to private ownership of the economy is even 
less advanced. The state also wields too much infl uence in allocating land and capital, giving rise 
to heavy economy wide ineffi ciencies. So, adjusting 
the role of the state to support a competitive private sector-led market economy remains a major 
opportunity. This will be important for enhancing 
productivity growth which has been stagnating for 
a long time. Vietnam needs more rapid productivity growth to underpin sustained rapid growth in 
order to achieve its objective of reaching upper 
middle income status in the next few decades.
Vietnam has boosted its international economic integration as it enters into more free 
trade agreements with the Eurasian Economic 
Union, the European Union, South Korea and the 
Trans-Pacifi c Partnership. At the same time, the 
ASEAN Economic Community was established 
on December 31, 2015, and is likely to create 
more opportunities for the country to integrate 
into regional and global economies. But while 
global integration has advanced well, with Vietnam embedding itself in global value chains, the 
benefi ts are constrained by the absence of linkages with domestic fi rms.

Table 2. East Asia and the Pacifi c country forecasts

(Real GDP growth at market prices in percent, unless indicated otherwise)

Country
2013
2014
2015
2016
2017
2018

Cambodia
7.4
7.1
7.0
6.9
6.8
6.8

China
7.7
7.3
6.9
6.7
6.5
6.3

Fiji
4.6
5.3
4.0
2.4
3.8
3.5

Indonesia
5.6
5.0
4.8
5.1
5.3
5.5

Lao PDR
8.5
7.5
7.0
7.0
7.0
6.8

Malaysia
4.7
6.0
5.0
4.4
4.5
4.7

Mongolia
11.6
7.9
2.3
0.7
2.7
6.2

Myanmar
8.5
8.5
7.0
7.8
8.4
8.3

Papua New 
Guinea
5.5
8.5
8.6
3.0
4.1
2.9

Philippines
7.1
6.1
5.8
6.4
6.2
6.2

Solomon Islands
3.0
1.5
3.3
3.0
3.3
3.0

Thailand
2.7
0.8
2.8
2.5
2.6
3.0

Timor-Lesteb
2.8
6.0
4.3
5.0
5.5
5.5

Vietnam
5.4
6.0
6.7
6.2
6.3
6.3

Source: The World Bank. World Development Indicators, 22 July, 2016.

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

VIETNAM’S ECONOMY 
IN TRANSITION (1986–2016)

A Record of Strong and Equitable Growth, 
with Emerging Concerns
Vietnam is a major development success story. 
Its per capita GDP growth since 1990 has been 
among the fastest in the world, surpassed only 
by China. Growth has also been remarkably stable and inclusive, which, with major gains on human development, has contributed to impressive 
progress in alleviating poverty and improving 
non-income dimensions of welfare. But declining productivity growth, insuffi cient progress in 
including marginalized groups in the country’s 
development (ethnic minorities in particular), 
and degradation of the environment call into 
question the durability of the current development model. Vietnam’s governance structure 
could also be at an infl ection point. The institutions that were adequate to carry the country to 
its lower-middle-income level are now exposing 
gaps that, unless addressed with boldness and 
urgency, are likely to impede the journey to upper-middle-income status.
In 1986 an impoverished Vietnam, on the 
brink of an economic crisis, embarked on a path 
of economic renovation (Đôi Mói). It was an explicit recognition that the “fence-breaking” reforms of the previous decade — opportunistically 
initiated to test the limits of central planning — 
had shown promise and that the situation was 
dire enough to demand a more systematic approach. Annual inflation was running at more 
than 400 percent, the real economy on a downward slide and heavily dependent on foreign 
aid, food in short supply, the budget chronically 
short of resources, and the vast majority of the 
population in poverty.
Thus Đôi Mói began a process of macroeconomic stabilization, unshackling the economy 
from state controls and gradually but steadily 
integrating with the global economy. More durable foundations for a market economy were 
built over time. And in competently managing 
the transition from a planned to a market-economy structure, Vietnam succeeded where many 
countries that had been part of the former Soviet 
Union have failed.
The transition economy of Vietnam enjoyed 
remarkable achievements in the first 20 years 

of economic renovation (Đôi Mói) from 1986 to 
2006. Notably, the economy grew at an average annual rate of 7.5 % in 1991–2000 period. 
Vietnam’s Amended Constitution 1992 recognized the role of private sector in the economy. 
U. S.-Vietnam Trade Bilateral Agreement (US-BTA) 
was signed in 2001. The country’s stock market 
made debut trading in 2000. Vietnam became 
a member of Association of Southeast Asian Nations (ASEAN) in 1995, then proceeded to full 
membership of the World Trade Organization in 
2007, following which registered foreign direct 
investment (FDI) reached an all-time high of US 
$ 71.7 billion in 2008. Together with the impressive economic achievements, Vietnam also saw 
its diplomatic and political status constantly 
improved in the international arena. The country has established diplomatic relations with 
more than 170 countries in the world, strategic 
partnerships with 12 important economies, both 
developed and emerging, namely China, Japan, 
Russia, India, England, France, North Korea, Italy, Germany, Indonesia, Malaysia and Thailand. 
The country also successfully hosted important 
events including the Asia Pacifi c Economic Cooperation (APEC) in 2006.
Upbeat sentiment helped to send Vietnam’s 
stock market index (VN-Index) to its peak of 
1,170 in March 2007 before its nosedive to 250 
in February 2009, auguring an imminent crisis. 
Since 2008 Vietnam’s GDP pace of expansion 
has slowed down markedly, with 2012 rate declining to 5 %, the lowest level in 13 years, while 
the macro economy faced paramount turbulence, 
large trade defi cit, high infl ation, overwhelming 
business closures, rampant corruption and transparency problems, demonstrations of enraged 
citizens, downgrading environment, and sovereignty confrontation with China.
Since the world’s geo-economics and geopolitics are entering an uncharted territory of 
evolving complication and rising uncertainty, 
not only Vietnamese entrepreneurs and households but also economists and policy makers are 
puzzled about what have happened, although 
the government has made a ten-year plan for 
2011–20 socio-economic development. The ruling elites appear to have written this plan based 
more on ‘the desirable’ than ‘the achievable’ 
while a clear vision for farther future based on 
careful projections and profound solutions is 

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

needed. Vietnamese and outsiders have been increasingly aware of noticeable gaps between the 
country’s promising potential and actual realization. As Vietnam has been considered somehow 
an entrance geopolitical game of East Asia and a 
600-million population ASEAN market, the keen 
eye of international players sticks to the Vietnamese political economic scene of the country, 
which will most likely defi ne the economic and 
diplomatic paths in the coming years.

The four characteristic sub-periods 
of post- Đôi Mói transition
From the adoption of Đôi Mói in 1986 by the 
CPV’s Sixth National Congress to present day, 
Vietnam’s economy has transformed from a centrally-planned model to market oriented with 
four characterized sub-periods. We divide the 
sub-periods based on the economy’s entrepreneurial perspectives, emerging cultural values, 
the building of market economy, and attitude 
toward global geopolitics and economics.

The period of “entrepreneurial 
policy-makers” (1986–1994)
In its history, Vietnam barely had economic 
prosperity that lasted for decades. Until early 
twentieth century, the feudalist nation was a 
small and outdated agrarian country with continuous wars and invasions from the North (China and Mongolia) and confl icts with the Southwest neighbor (Cambodia). In the 20th century, 
the French and American wars drew most national efforts to serve the combats. From the 
national unifi cation in 1975 to 1985, the nation 
struggled with its fi ve-year plans on collectivization of agricultural and industrial production. 
However, the real results were often far behind 
expectation because the guiding principles ‘violated the most important motivation for production development, that it is worked against the 
working people’s vital vested interests’.
Upon the failure of the 1985 price-wage-currency adjustment scheme, a severe economic 
crisis followed, resulting in hyperinflation of 
775 % in 1986, scarcity of staples and consumer 
goods, impoverished living conditions, industrial 
stagnation, and mounting foreign debts. The situation worsened as Vietnam could barely trade 
with the West due to the U. S.’s trade embargo. 
The chaos had put the CPV under immense pres
sure to get the country out of the crisis, and Đôi 
Mói policies were an answer introduced in 1986, 
with which it is believed that there was no “political revolution or ideological conversion on 
the part of the leadership”. The socialist ideology remained and was reiterated by the political 
leader of Đôi Mói, the Communist Party of Vietnam (CPV) General Secretary Nguyen Van Linh 
that “It is not objectively necessary to establish a 
political mechanism of pluralism and multiparty 
government. Socialism is the only right decision”.
However, Đôi Mói leaders demonstrated some 
remarkable entrepreneurial characteristics in 
their economic thinking and implementation as 
economic crisis and harsh realities were neither 
necessary nor sufficient conditions for the reform to take place which enabled an undertaking 
process that had brought about the long-awaited 
extensive reforms, learning lessons of economic 
policies from Ho Chi Minh’s times, 1945–1969, 
about the adoption of a multi-sectoral economy 
based on different types of ownership, encouraging for foreign investments, foreign trade.
Before Đôi Mói, Le Duan, CPV General Secretary from 1960 to 1986, was already critical of 
economic models taught by the Soviet Union and 
China for chronic economic malaise and blunders, although despite some innovative thinking 
Le Duan himself was a strong opponent of market economy and much of his policy turned out 
counter-productive. But in his time, Kim Ngoc, 
Party Secretary of Vinh Phuc province from 1966 
to 1967, was an accomplished entrepreneurial 
politician who soon recognized problems of the 
mass collectivization, which resulted in poor 
agricultural production, and the need to have 
property right in farm household. He ‘invented’ 
a pilot plan called Khoán, which had granted a 
certain degree of economic freedom to farmers, 
leading to remarkably higher rice yield and pig 
herds during the American war. Ngoc’s innovative ideas were basically not accepted by the 
North’s collectivism, and for a moment was regarded as an offensive to the prevailing socialist 
ideology.
After the death of Le Duan, Truong Chinh, a 
high-ranked politburo member and who would 
then briefly serve as CPV General Secretary 
(July-December 1986), was another highly infl uential leader and the one who laid down the 

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

fi rst brick for the House of Reform of Vietnam, 
by launching the program of extensive reforms 
during the 6th CPV Congress in December 1986. 
As Truong Chinh stepped down, Nguyen Van 
Linh, CPV General Secretary 1987–91, continued 
to bring concepts of reforms to the nation’s economic life through a nationwide reform program 
with sweeping changes. The old-fashioned centrally-planned economy was replaced with socialist market mechanism, which promoted the 
concept of a multi-sectorial economy, open-door 
policies towards international trade and investment, and recognized private property rights.
The new Law on Foreign Investment initiated 
in 1987 enabled a surge of the fi rst wave of foreign direct investments (FDI) fl owing into Vietnam, which then reached 10 % of GDP in 1994. 
Vietnam was the largest FDI recipient among 
developing countries and economies in transition in proportion to the size of its economy 
thanks to its macroeconomic stabilization resulting from Đôi Mói and investor expectations 
of continuing reforms and improvements in the 
general investment climate. Corporate Law and 
Private Enterprise Law in 1990 ‘broke ground’ 
the national private growth engine. From the old 
Confucian view imposed by the feudalist elites, 
which favors “educated scholars serving the government”, by 1994 over 17,400 entrepreneurial 
fi rms started up. The 1992 Constitution extended 
human rights and recognized the multi-sectoral 
economy. Land Law in 1987 (revised in 1993) 
granted farmers land use rights. The milestones 
of Đôi Mói from 1987 to 1994 can be summarized 
in the following table.
Vietnam quickly grew to become the world’s 
third largest rice exporter in 1989 (approx. 1.2 
million tons exported), after China and the United States. The entrepreneurial policy-makers had 
been the core element to bring about change in 
macroeconomic management in 1990s although 
the CPV reserved status quo as the unique ruler.

Economic integration and adaption
of market economy (1995–1999)
An eminent reformer, Prime Minister Vo Van 
Kiet came in offi ce from 1992 to 1997, and continued to advocate extensive reforms. Vietnam 
sought further economic integration and diplomatic relations within the region and the world. 
From 1995 to 1999, the normalizing of diplomat
ic and trade relations with the United States was 
among the most remarkable for Vietnam, opening up opportunities to work with the world’s 
developed economies and international organizations around, including multi-lateral donors 
such as the World Bank and ADB.
While the conservative in the CPV may have 
been afraid of losing their control over economic 
development and the national politics, generally speaking the CPV adopted open policies as 
they saw benefi ts for the country while no direct 
threats to their power were seen. Despite existence of confl icting views within the CPV, Đôi Mói 
momentum was retained for almost two decades 
with political consensus over three major principles: a) Political stability is a prerequisite of economic development, and the CPV remains to be 
the unique power; b) To achieve economic goals, 
Vietnam must keep its door open to foreign trade 
and investment; and, c) Gradualism is preferred 
to avoid deviation from the socialist path. These 
principles have been preserved and implemented 
explicitly through the CPV and government’s socio-economic and foreign policies.
The U. S. also had some commercial interest 
in Vietnam’s growing economy and strategic 
political interest to work with allies and friends 
“to promote stability and development by integrating Vietnam more fully into the existing 
East Asian order.” Over US$ 10 billion of FDI entered the country in 1996 together with billions 
of dollars of ODA coming from the World Bank 
and Asian Development Bank. FDI enterprises 
played an important role in creating jobs, paying 
corporate taxes, encouraging consumption and 
competition, and contributing to export growth. 
Vietnam’s GDP grew at 9.5 % and 9.3 % annually 
in 1995 and 1996 respectively, the highest rates 
recorded in the post-Đôi Mói period.
The country also expanded its diplomatic relations within the region becoming member of 
ASEAN (1995), APEC (1998). The U. S. and Vietnam then expanded the relation into a US-Vietnam bilateral trading agreement (the BTA was 
later signed in 2001). The US-Vietnam BTA had 
an important political economy impact by spurring political will to speed up negotiations on Vietnam’s accession to WTO in later years.
Integrating in international markets has 
brought about new market opportunities and 
helped the country to deepen its reform, but at 

Review of Business and Economics Studies  
 
Volume 4, Number 3, 2016

the same time exposed the country to contagious 
risks. Although less hurt by the Asian fi nancial 
crisis in 1998 than other major Asian economies 
due to its young markets, Vietnam experienced 
GDP growth decline to 4.77 % in 1998 and committed FDI fell by half in 1997–1998 to approximately US$ 5 billion, compared to US$ 10 billion 
in 1996. When the Asian fi nancial turmoil broke 
out, Vietnam was still a nascent market model, 
without stock market; and the fl edgling banking 
system was controlled by the state-run powerhouses who occupied 75 % of assets and credit 
portfolio. Inefficient SOEs still accounted for 
50 % of the country’s output.

Economic boom and emerging 
cultural values (2000–2006)
Succeeding Vo Van Kiet, Prime Minister Phan 
Van Khai (1997-2006) continued to pursue further integration into the world economy, especially from 2000 to 2006. In 2005, Mr. Khai was 
the first Vietnamese leader visiting the U. S., 
strengthening diplomatic relations between 
the two countries. The U. S. then supported Vietnam’s accession to WTO in early 2007. Under 
Khai’s leadership, Vietnam’s economy experienced economic prosperity, quickly expanding 
fi nancial markets and GDP, low infl ation, surging 
FDI inflows and faster pace of privatization of 
SOEs. The capitalist symbolic fi nance machine — 
the stock market — was born in July 2000.
By the end of 2000, Vietnam stock market’s 
capitalization was negligible in economic terms, 
less than 1 % of GDP. But by the end of 2006, 
the fi gure rose to 22.7 %. In 2006 VN-Index rose 
150 %. From 2006 to early 2007, investors considered stock markets a ‘money machine,’ and herd 
mentality triggered huge market bubble risks. 
Despite immense risks, the market continued to 
go high as capital gains were still made easily, 
and macro prospects looked bright with Vietnam 
joining WTO soon.
An average GDP growth of 7.5 % in 2000–2005 
period and the economy ranked at 58th largest 
in the world in 2006 made Vietnam like a little 
tiger economy in Southeast Asia. However, the 
rapid rate succumbed to ‘resource curse’ problem 
as there appeared more evidence that economic 
growth heavily relied on overconsumption of 
physical assets or/and capital endowments while 
innovation and productivity were not the main 

emphasis, leading to a decline of competitiveness. Vietnam’s high incremental capital to output ratio (ICOR) of 7–8 times, compared to other 
Southeast Asian economies of 3–4, and rising 
investment to GDP over years, i.e., 4.9 % (from 
1996 to 2000) to 39.1 % (2001–05) to the staggering 43.5 % (2006–10) show its propensity to 
consume more resources while seeking growth. 
The absence of innovation and creativity together with resource curse will be destructive in the 
long run. Worse, the curse is more severe in the 
state-owned sector whose ICOR is two or three 
times higher than that in non-state sector.
Under P. M. Phan Van Khai’s leadership, although the state-led model was still advocated, 
he did not vow to establish the state-run conglomerates. (There were only two state-run conglomerates established under Khai’s tenure that 
are Vinacomin and Vinashin) In a stark contrast, 
his successor P. M. Nguyen Tan Dung established 
other eleven conglomerates within a few years 
after he took office. The breakdown of investment capital of the state-owned behemoths 
showed remarkably greater state budget investment in SOEs in 2008–09.
Still, combining the rapid growth and booming markets, Vietnam was successful in reducing 
poverty rate from 28.9 % in 2002 to 18.1 % in 2004 
and 15.5 % in 2006. Infl ation was kept under check 
with average CPI in the period at 4.5 %, a remarkable achievement as infl ation has always been a 
chronic disease of the post-Đôi Mói period.
The US-Vietnam BTA and investors’ projections that Vietnam would enter WTO in 2006 and 
China plus one strategy contributed to make Vietnam an attractive destination for FDI. Political 
and social stability played a signifi cant role in facilitating economic development and attracting 
FDI. FDI started to recover from 2003 (US$ 3.2 
billion registered capital) to 2006 (US$ 12 billion), generating growth and employment.
Privatization (politically correct: ‘equitization’) of SOEs also saw improvement in the 
2002–06 period with 2,813 enterprises being 
privatized, compared to a handful in 1990s, 60 in 
2011, and 16 from 2012 to 2013Q1.

Globalization and attitudes toward global 
geopolitics and geoeconomics (2007-present)
After two decades of growth, the engine 
started to lose its steam in late 2000s. The con