ECONOMIC DEVELOPMENT
ATTY.ERICKA DAGUINOD
MEMBERS:
BUCOG, JHON MARK
TOÑACAO, HAIDEE MARIE B.
UBANI, JOHNA FLOR
PONDO,PATRICK
BENSING,JAMES ARVI J.
MAGBANUA, JOEL
One of the key performance measures that can drive economic growth and
development based on the video is Trade Liberalization: Vietnam's embrace
of open trade policies, particularly with the U.S. and ASEAN COUNTRIES,
spurred its export-led growth, making it a manufacturing hub.
HUMAN CAPITAL
Vietnam has invested a lot in Human Capital which goes against any
preconceptions of Vietnam just being a magnet for cheap labor. According to
the PISA Standard International Testing, which ranks countries by the exam
scored of their 15 year olds. Vietnam Outcompetes most developed
economies when it comes to reading and math. Ranking an Impressive fourth
for science and investment it it’s population isn’t just something based in
The classroom. Vietnam’s human capital index has increased from 0.66 to
0.69 since 2010, This means that a child born today will be 69% as
productive as he or she could be, if they Enjoyed a complete education and
full health. Vietnam is tipped to benefit from an emerging Middle class,
something boosted by the nation’s very high participation rate of 80%
Compared to 65% incomparable developing countries. This high rate reflects
the increased Prevalence of women in the workplace at over a quarter more
than the global average. Now, All of this is good and well with Vietnam
remarkable progress over the last three decades.
Vietnam has significantly improved its human capital, ranking fourth in
science and outperforming most developed economies in reading and math.
The country’s human capital index has increased from 0.66 to 0.69 since
2010, indicating a potential 69% increase in productivity. Vietnam’s high
participation rate, 80%, reflects the increased prevalence of women in the
workforce, indicating significant progress over the past three decades.
AGRICULTURAL
Vietnam, which depends on agriculture for 40% of its economy, saw major
growth after changing from group farming to individual farming. This allowed
farmers to sell their own produce and keep the profits, leading more people
to start small businesses. Over time, this helped their economy grow.
Vietnam then shifted its focus to increasing exports and trade, which boosted
its development even further.
EXPORT RATES
Vietnam's export rates have tripled over the recent decade, a growth driven
by adopting open trade policies that have welcomed and spurred foreign
investment. Today, Vietnam stands out in the global trade arena with an
export similarity index closely matching that of China, especially in sectors
like electronics and apparel. The nation's strategic involvement in pro-trade
agreements, such as its membership in ASEAN, entry into the World Trade
Organization (WTO), and several free trade agreements, has solidly anchored
its position in international markets.
AGING POPULATION
Vietnam’s population has grown by over 25% in the last 30 years, but it faces
a rapidly ageing population. The elderly population is expected to double
from 7 to 14% by 2035, making Vietnam an aged society. Japan has set up a
knowledge-sharing platform with the World Bank to help Vietnam manage
this transition, despite its low development rate.
POVERTY RATE AND GDP
Vietnam's GDP per capita has increased from $95 to over $2,700 over 30
years, despite population growth. The country experienced a four-fold
increase, a four-fold decrease in poverty, and became a leading exporter.
Samsung alone accounts for nearly a quarter of exports, making Vietnam a
prime example of economic development.
LOW COST LABOR
Vietnam's recent success is largely due to its position as a cheaper
manufacturing base, providing jobs and propelling the economy into middle-
income status. However, increasing automation threatens this expansion,
eroding Vietnam's cheap labor advantage. The country's agricultural-based
workforce, with just under 40% working in agriculture and less than a quarter
having an employment contract, poses a significant challenge.
UPRISING INFRASTRUCTURE
Vietnam's significant infrastructure investment, including developing
transport networks, expanding digital and IT capabilities, and ensuring
energy supply, was key to its economic success. By improving highways,
ports, and digital connectivity, Vietnam lowered logistics costs, enhanced
trade, and attracted foreign investment. The country's focus on urban
development and renewable energy further solidified its position as a
competitive global manufacturing.
TRADE LIBERALIZATION
Vietnam has a history of pro-trade agreements, starting with the Foreign
Investment Law in 1987. The US ended its trade embargo in 1994, leading to
its membership in the ASEAN Free Trade Area in 1995. In 2000, Vietnam
signed a free trade agreement with the US. In 2007, Vietnam joined the
World Trade Organization, lowering tariffs to many countries. Recently, it
signed the Regional Comprehensive Economic Partnership, covering a third
of the global economy.
MIDDLE CLASS
Vietnam’s middle class has expanded significantly in recent decades, fueled
by rapid Economic growth and poverty reduction. As of 2020, nearly 20% of
the population was considered middle class, and this figure is expected to
grow to 25% by 2025. This growth is driven by increased employment
opportunities, rising incomes, urbanization, and a boom in consumer
spending. The rise of the middle class also presents new challenges,
including income inequality, housing affordability, and ensuring sustainable
economic development to meet the Aspirations of this growing segment.
DOI MOI REFORM
Before 1986, Vietnam grappled with a struggling economy under communist
economic policies, heavily reliant on Moscow, which was part of the broader
Soviet sphere of influence. However, the Doi Moi reforms initiated in 1986
marked a seismic shift. These reforms transitioned Vietnam from a centrally
planned economy to one that embraced market-oriented approaches,
significantly benefiting sectors like agriculture and private enterprises.
What are the lessons that we can derive from this case video on
“How Vietnam Became an Economic Miracle” to emulate and apply
to our own country to achieve economic prosperity?
The Philippines can learn a valuable lesson from Vietnam's Economic
success. Philippines should focus on improving Economic development by
opening its economy to trade and investment, actively seeking free trade
agreements and promoting a business-friendly environment. As well as
investing in infrastructure development, human capital that help to create a
skilled workforce that contributes to our economic growth and it may attract
more foreign investment. Attracting Foreign investment, embracing a
market- oriented economy and focusing on inclusive growth are essential
steps. The Philippines should learn from the past, adapt global trends and
understand that economic prosperity is a long term process requiring
patience and persistence to achieve a more prosperous future for our own
country.
