In the year 1986, Vietnam switched over from an economy, which was centrally planned to an economy, which was market oriented. However, the government continued to head all issues. The transition brought about by “Doi Moi” succeeded in tackling poverty and bringing about growth in the economy.
This objective was reflected in the economic strategy backed by Ninth Party Congress in the year 2001. The government conveyed that to attain the objectives, namely reducing poverty and facilitating growth in the economy, the country had to undergo structural reforms. These reforms would eventually alter policies related to finance and trade.
Opportunities pertaining to private investment would be liberalized. Efficiency in the working of the public enterprises would also be enhanced. On one hand, the launching of trade reforms in Vietnam would outdo the other reforms and the other reforms would not be able to keep pace with trade reforms in Vietnam.
On the other hand, due to the implementation of the reforms, the country would immensely profit from the same.
Foreign Trading Corporation or FTC:
Earlier, existence of a number of Foreign Trading Corporations or FTCs, characterized the trade regime of Vietnam. The foreign trading corporations exercised their monopoly over exports as well as imports of a number of trading commodities.
Trade reforms in Vietnam aimed at the following:
The main goal of trade reforms in Vietnam was the metamorphosis into a market oriented economic structure from a structure, which was centrally planned. This could be attained by the following means:
The domestic prices could be liberalized. They could be put in line with the global price.
Increasing the number of trading individuals as compared to the existing entities under the Foreign Trading Corporations. This step was taken to prevent distortion of the price signals owing to lack of competition.
Tools related to trade policies like licenses, tariffs and quotas could be worked out.
Removal of anomalies in the exchange rates.
Promotion of industries facilitating export activities was another objective of trade reforms in Vietnam. With the implementation of “Doi Moi” in the year 1986, trade has done fairly well in the country. Trade reforms in Vietnam ought to be such that they can meet the ever changing demand of the market and also be prepared to keep up with the trade volume of the future.
Trade reforms in Vietnam and relation with structural reforms in Vietnam:
As per rules, firms which are registered irrespective of the ownership status may carry out trade. However, there are barriers or obstacles, which prevent state owned enterprises or the SOEs from trading. The industries, which are market oriented as well as the state owned enterprises are usually favored by the trade policies. Bias pertaining to trade reforms in Vietnam may adversely affect the investment determinations of people. This may however lead to improper assignments of various resources in different sectors of the economy.
With regard to international trade, agreements pertaining to international trade have been reckoned to improve trade reforms in Vietnam. With the formulation of the Customs Law in 2001 October, operations related to customs have significantly improved.
Last Updated on : 26th June 2013