MACROECONOMIC MANAGEMENT AND THE TRANSITION TO THE MARKET IN VIETNAM

Vietnam's macroeconomic performance during the transition to a market economy has been very strong, better than those of most economies in Eastern Europe and of the former Soviet Union. Vietnam grew at an average annual rate of 7% during 1989-1992; inflation declined from over 400% in 1988 to 17% in 1992; and exports increased at more than 30% per year during this period. The macroeconomic success can be attributed to the combination of good endowments and good policy. Vietnam's output is concentrated in agriculture, services, and light industries, all sectors that responded quickly to price liberalization, strengthened property rights, and real exchange-rate devaluation. (C) 1994 Academic Press, Inc.