THE DETERMINANTS OF THE VIETNAMESE ECONOMICS COMPETITIVENESS, A LESSON FOR DEVELOPING COUNTRIES

Van Ha Nguyen () and Xavier Galiegue
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Van Ha Nguyen: National Economics University, Vietnam.
Xavier Galiegue: University of Orleans, France

No 12, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: Vietnam has been very successful for the last two decades, since the adoption of “Doi moi” in 1986. Over the last two decades, an economic growth rate in Vietnam has been one of the highest worldwide (with GDP growing by respectively 8% per year). The increase of the Vietnamese share of world trade is the highest of all major Asian exporters (including China) since the mid-1990s. « Why is Vietnam so competitive with respect to other Asian exporters? » This paper considers Vietnam's competitiveness, its definition and measurement. The major characteristic of East Asian economic development is rapid industrialization. It has been accelerated by export orientation and a specialization pattern that has evolved from simple (ie garment, shoes, toys, etc.) to more sophisticated products. Countries have used their comparative advantage to catch up industrialized economies. According to Okita (1985) the great diversity among the Asian nations in their stages of development and resource endowments “works to facilitate the flying geese pattern of shared development as each is able to take advantage of its distinctiveness to develop with a supportive division of labour.” The “flight of wild geese” image has acquired different meanings over time. It was first used to describe the life cycle of industries (Akamatsu, 1962); it has been successively extended to the evolution of industrial structure, then to the shift of industries from one country to another. According to this latter meaning, as Japan and the other East Asian countries leave industries in which they have no comparative advantage, later industrialized countries are able to move in these industries and join the “flying geese” formation. The textile & clothing industry offers an example of the shift of industries in Asia, from Japan to Hong Kong, Korea, Taiwan etc. then to Malaysia, Philippines, Thailand etc. and now to China, Vietnam, etc. In this paper, we also analyze Vietnam's potential for sustainable growth and international integration. Our paper draws on international foreign trade databases and uses traditional indicators of trade specialization and competition.

Keywords: Competitiveness; Exportation; Exchange rate; labour costs; FDI (Foreign Direct Investment); revealed comparative advantage (RCA). (search for similar items in EconPapers)
JEL-codes: F1 F31 L6 O24 O57 P5 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011
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