The global economic recession, which stemmed in the US and later spread to other countries in Europe and Asia, has taken its toll on every economy, and Vietnam was no exception. It struck the Vietnamese economy faster and had far worse consequences than expected, alongside worries of the return of a high inflation rate, a fall in exports and the downward trend of the stock market.

In the face of this, the government introduced a VND14,000 billion economic stimulus package and a number of rescue policies to help the business community and the public overcome this difficult period.

The government applied a ‘people-based’ approach which once again proved effective. It showed a strong determination to stimulate production by helping businesses and individuals to access credit, maintain production and purchase the products they need to fuel consumer demand.

Many businesses kept their heads above water by adopting new and flexible strategies to adapt to the new circumstances. More importantly, they began to cash in on the domestic market which has been left open for a long time.

As a result, the national economy grew at 5.2 percent and the inflation rate was kept at under 7 percent. Though the GDP figure is relatively low compared to previous years, it is impressive given the global downturn, and Vietnam is one of five countries in the world to have achieved a high growth in 2009.

With these results, Vietnam convinced donors at the 2009 consultative group (CG) meeting in Hanoi to commit a record high of more than US$8 billion in official development assistance (ODA) to the country.

The international community also acknowledged the government’s efforts to ensure social welfare amidst these difficulties. Vietnam spent a total of VND22,470 billion on social welfare programmes, up 62 percent against 2008 and a record figure so far.

2009 was also the first year that the government put in place resolution No30a to support poor districts across the country. Under the resolution, many districts have been assisted  to build new houses, provide rice, generate jobs and send unemployed poor people overseas to work under contract.

Economic groups and State corporations also joined hands with the government to support 62 poor districts, pouring VND2,100 billion into development projects.

2009 was a successful year for the national poverty reduction programme as the rate of poor households fell to 11 percent compared to 22 percent four years ago.

However, the national economy revealed some foreseeable shortcomings, including poor infrastructure. The economy experienced bottlenecks in its growth due to poor planning. Hanoi and HCM City – the two big economic centres – still experienced massive flooding and huge traffic jams. An economy cannot grow when the environment is polluted so badly as the quality of life gets worse. Also, an economy cannot speed up the global integration process when it lacks adequate trained human resources.   

In addition, it is not easy to increase the efficiency of investments, especially in the State economic sector. Vietnam only earned US$56.5 billion from exports and slipped into a trade deficit of US$12 billion.

The fact is that Vietnam remains slow when responding to global issues, including those which put mounting pressure on the foreign exchange rate and the price of gold. It is high time that the economy was restructured with a focus on quality, efficiency and the stability of growth, while developing human resources, upgrading the infrastructure and speeding up administrative reforms.

Vietnam has bottomed out from the global economic crunch and is on the road to recovery. What the country has experienced will help it to cope better with similar crisis in the future. It can now fully tap into its potential and seize the opportunity to develop faster and in a more sustainable manner.