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Challenges in Searching for Vietnam's Growth Drivers Through 2030

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  • Luc Van Can
  • Tu Ngoc Dang

Abstract

Vietnam's long‐term economic growth comparisons with ASEAN nations have been striking since its 1986's economic reforms. Such key factors as economic liberalization, a young population and low‐cost labor, knowledge diffusion, and the manufacturing sector have driven Vietnam's growth. Until 2023, Vietnam has the potential to capitalize on several favorable circumstances, including the diversion of trade and investment from China, the growth of the middle class, and the global digital transformation. Nevertheless, Vietnam's economic growth will confront various obstacles and a declining trajectory that predates the COVID pandemic. To circumvent the risk of falling into the middle‐income trap, this paper proposes “active” economic integration, labor productivity, innovation and research and development, the services sector, and green growth as new growth drivers for Vietnam till 2030. Considering the many policy ideas put forth by the Vietnamese government and the World Bank, this paper presents several distinct recommendations on institution reform and human capital accumulation.

Suggested Citation

  • Luc Van Can & Tu Ngoc Dang, 2024. "Challenges in Searching for Vietnam's Growth Drivers Through 2030," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(2), pages 252-267, July.
    • Handle: RePEc:bla:asiapr:v:19:y:2024:i:2:p:252-267
    DOI: 10.1111/aepr.12458
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    References listed on IDEAS

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    5. Yuta Tsukada, 2022. "Premature deindustrialization risk in Vietnam," Journal of Asian Business and Economic Studies, Emerald Group Publishing Limited, vol. 30(3), pages 226-240, July.
    6. Ali, Tariq Mahmood & Kausar Kiani, Adiqa & Bashir, Tariq & Khan, Talah Numan, 2021. "R&D Expenditure as an Accelerator of Economic Growth with Special Reference to Developing Countries," Journal of Business and Social Review in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 7(3), pages 561-589, September.
    7. Kimura, Yuichi, 2011. "Knowledge Diffusion and Modernization of Rural Industrial Clusters: A Paper-manufacturing Village in Northern Vietnam," World Development, Elsevier, vol. 39(12), pages 2105-2118.
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    Cited by:

    1. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2024. "ASEAN: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(2), pages 153-171, July.

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