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Is Vietnam economic paradigm sustainable for catch up


Author Info

  • Anh Nguyen Tu

    (Central Institute for Economic Management, CIEM, 68 Phan Dinh Phung Hanoi)

  • Thuy Nguyen Thu

    (Foreign Trade University, 91 Chua Lang, Hanoi.)


In the course of catching-up, Vietnam faces risks in two sectors: in real sector and in financial sector. In this paper we focus mostly on risk in real sector: the risk of getting stuck in middle-income trap. Vietnam is still far lagged behind her neighbors and much more further to developed economies. Does the economic paradigm that Vietnam follows in the last two decades allow her to catch up with those economies? We show that Vietnam’s economic growth in the last two decades based essentially on cheap but low skill labor and physical capital. Participation in international and regional production network probably lock Vietnam in low-tech position, hence low value added. If Vietnam keeps on growing in present paradigm, hardly can it catch up the neighboring economies.

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Bibliographic Info

Paper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 09.

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Length: 45 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:dpc:wpaper:0911

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Keywords: Flying geese paradigm; VAR models; TFP; Technological improvement; catch-up; Vietnam.;

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  1. Cuong Le Van & Manh-Hung Nguyen & Laurent Thai Bao Luong, 2006. "New technology, human capital and growth for developing countries," Cahiers de la Maison des Sciences Economiques, Université Panthéon-Sorbonne (Paris 1) b06065, Université Panthéon-Sorbonne (Paris 1).
  2. Xiaohui Liu & Peter Burridge & P. J. N. Sinclair, 2002. "Relationships between economic growth, foreign direct investment and trade: evidence from China," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(11), pages 1433-1440.
  3. Cuong Le Van & Tu-Anh Nguyen & Manh-Hung Nguyen & Thai Luong, 2010. "New Technology, Human Capital, and Growth in a Developing Country," Mathematical Population Studies, Taylor & Francis Journals, vol. 17(4), pages 215-241.
  4. Nair-Reichert, Usha & Weinhold, Diana, 2001. " Causality Tests for Cross-Country Panels: A New Look at FDI and Economic Growth in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 63(2), pages 153-71, May.
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