As the result of the “Doi-Moi” reform policy, Vietnam has experienced a remarkable phase of growth since 1986. In this period the Gross Domestic Product (GDP) quadrupled. Since the population of Vietnam (about 88.5 million people in 2010) is currently growing by more than one million people annually, the increase in per capita income lags behind GDP growth, but still reached 2900 U.S. dollars in 2009,which ranks 1652 in the world (see Table 1). In order to prevent its per capita income from falling off because of this huge increase
in population growth, Vietnam needs a real GDP growth of over 5%. Although the poverty rate was decreased from 58% to 13% between 2003 and 2008, considerable regional disparities especially between rural and urban areas continue to persist.
In the context of the currently ongoing financial crisis some research work has been done to outline the major weaknesses of the deregulated and liberalized financial system architecture. A growing shadow-financial system, the abuse of investment techniques and the available financial instruments, accompanied by poorly performing and overestimated rating agencies, short term oriented financial behaviour and a poorly developed regulatory and supervisory environment led to a two-digit trillion Dollar damage. The system has in parts lost its function to efficiently intermediate between savers and borrowers and thus became a continuous threat to the value creating real economy. To restore the functionality of the financial system a set of measures is discussed. The Vietnamese financial system partially mirrors weaknesses of the current global financial system, although its particular strengths and weaknesses have to be considered separately as they are borne by the specific features of the Vietnamese economic system.
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