The introduction of dol mol policies in 1986 began a reorientation of the Vietnamese economy away from communist-style central planning and towards market-based principles. The communist economic system, combined with near-total isolation from the world in the wake of its 979 invasion of Cambodia, had left Vietnam a deeply impoverished country with estimated GDP per capita of less than US$250 and a shaky physical infrastructure, cobbled together from remnants of the French and US presence and Soviet equipment Since the late I 980s, Vietnam has moved from a rice-deficient country to become the world's third largest exporter of rice. It has reintegrated itself into the world economy through trade and investment links, reacquired borrower status from the World Bank and other muftilateral organizations, and achieved average GDP growth of 8% in the 1991 - 94 period. A foreign investment law was passed in 1987, and by mid-1995 over US$13 billion of foreign investments had been approved although perhaps only one-quarter of this sum has actually been invested.
Vestiges of central control remain, however. Prior to 1988 a small number of central trading monopolies dominated foreign trade activity, each conducting business for its own government agency or industry. Liberalization in 1989 introduced competition between state-owned companies through the granting of new import - export licences, and later manufacturing firms producing goods for direct export - including foreign-invested joint ventures - were also allowed to import and export goods, as long as they had the requisite licence. Very few private companies have met the additional criteria demanded to qualify for an import - export licence. Further, foreign trading companies - a classification which embraces all companies not manufacturing in Vietnam - are barred from establishing a subsidiary or branch office and may only operate under representative office status. Representative office activities are therefore confined to market research, relationship building and business coordination with offices in other countries. Direct business activity is forbidden, and the authorities have closed down several representative offices deemed to have overstepped the boundaries.
The concept of a national distribution network barely exists in Vietnam. Prior to economic reform there was little trade between different regions of the country, and barriers to the free movement of goods remained in the form of military or customs checkpoints at provincial boundaries even after formal restrictions were lifted.
THE OPENING OF VIETNAM AND THE REGULATORY ENVIRONMENT : SKF in Vietnam article from Business Management Catagory THE OPENING OF VIETNAM AND THE REGULATORY ENVIRONMENT
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