Structural adjustment and transition to a market economy: the case of Vietnam.

Summary Our work focuses on the problems that Vietnam may face during its transition to a market economy. It is based on its particularity of overlapping both the characteristics of a planned economy and those of a developing economy. Three lines of research have been defined in order to delimit our field of study. The first concerns the difficulties of macroeconomic stabilization in the context of an economy in transition. The comparison we have made in this area between Eastern European countries and Vietnam shows that the pace, timing and extent of reforms required by the transition to a market economy system can affect macroeconomic stability in the short run. The second line of research focuses more on the problem of financing the transition. In particular, Vietnam's characteristics as a developing country tend to accentuate the difficulties in this area: low savings and investment rates, underdevelopment of the banking and financial system, limited access to external financing. Therefore, the experience of China in the management of the savings-investment balance can be of great interest to Vietnam. The last line of research concerns the role of foreign direct investment and economic openness on development and growth. Like many other developing countries, Vietnam has actively encouraged the entry of foreign investors in order to facilitate the industrialization and economic modernization of the country.