Pattern and Sources of Growth of the Vietnam Economy: A Deviation from Proportional Growth Analysis

Abstract

The purpose of this paper is to conduct a deviation from proportional growth (DPG) analysis for the Vietnamese economy over the period of 1996-2007. This aims to determine the pattern and sources of growth of the economy based on the experience of other developed and newly developing Asian economies. Their experiences could provide indicative information to the authorities of Vietnam for delineating future growth paths. Similar analyses were also carried out for other major Asian economies and the results are compared with those of Vietnam. While the 10th and 11th Congress of the communist party of Vietnam have adopted targets for Vietnam to become an industrialized economy by 2020, sorting out and implementing the most appropriate strategies have become the key to whether the targets will be met or not. Our results shows that The Vietnamese economy in this period exhibited several similarities with Taiwan during the period 1966-1984, Korea 1963-1985, and Japan 1914-1975. Even though the Vietnamese economy has grown rapidly since 1996, especially during the period from 2000 to 2007, the process of industrialization in Vietnam during this period was still slower and weaker compared with those NITs before 1985 and in Japan before 1975. We also predict that its hard for Vietnam to become an industrialized economy by 2020.