Integration into the World Economy

Southeast Asian Affairs, January 1, 1998 | Go to article overview

Integration into the World Economy


Vietnam's joining ASEAN in July 1995 has moved the economy towards integration into the regional and world economies. This has produced positive results in furthering change within the country's institutions, as it moves to meet requirements for participation in AFTA arrangements. It has ten years from 1995 to meet AFTA requirements fully.

Agencies that have been at the forefront of ASEAN integration17 have rapidly adapted themselves and expanded their influence, in spite of limited resources. Of the ministries, the ministry of trade has managed rapidly to exploit new trade relations and increase its overall effectiveness in regulating market and trade distortions. The ministry's Market Management Agency stands out as an effective agency for inter-agency co-ordination, responding promptly to fraud and other trade violations, notwithstanding rampant smuggling. Trade reform, which will allow direct export of most products by private businesses in 1998, has also been implemented faster than other sectoral reforms. Under the modified governmental structure, trade and foreign affairs are to be more integrated and responsive to external changes under the leadership of deputy premier Nguyen Manh Cam. Nevertheless, the passage and implementation of trade measures in 1997 was constrained by weak policy co-ordination, the drag created by mismanagement and fraudulent activities in the financial sector, and persistent quota misallocations.18 Without a comprehensive overhaul of the financial sector, the country's trade growth --- which expanded by more than 390 per cent in 1990-96 --- will be unable to sustain itself.

Vietnam's actual contribution to AFTA arrangements has been cautious and gradual. …

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Integration into the World Economy
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