The Vietnam's Transition Economy and its Fledgling Financial Markets: 1986-2003

Quan Hoang Vuong, FINANCIAL MARKETS IN VIETNAM'S TRANSITION ECONOMY: FACTS, INSIGHTS, IMPLICATIONS, Chapter 3, VDM-Verlag, February 2010

73 Pages Posted: 19 Sep 2009 Last revised: 23 Feb 2010

See all articles by Quan Hoang Vuong

Quan Hoang Vuong

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management; Phenikaa University

Date Written: January 15, 2004

Abstract

In this paper, we analyze the context of Vietnam’s economic standings in the reform period. The first section embarks on most remarkable factors, which promote the development of financial markets are: (i) Doi Moi policies in 1986 unleash 'productive powers.' Real GDP growth, and key economic indicators improve. The economy truly departs from the old-style command economy; (ii) FDI component is present in the economy as sine qua non; a crucial growth engine, forming part of the financial markets, planting the 'seeds' for its growth; and (iii) the private economy is both the result and cause of the reform. Its growth is steady. Today, it represents a powerhouse, and helps form part of the genuine financial economy.

A few noteworthy points found in the next section are: (i) No evidence of financial markets existence was found before Doi Moi. The reform has generated a bulk of private-sector financial companies. New developments have roots in the 1992-amended constitution; (ii) The need to reform the financial started with the domino collapse of credit cooperatives in early 1990s. More stress is caused by the ‘blow’ of banking deficiency in late 1990s; and (iii) Laws on SBV and credit institutions, and the launch of the stock market are bold steps. Besides, the Asian financial turmoil forces the economy to reaffirm its reform agenda.

Our findings also indicate, through empirical evidences, that economic conditions have stabilized throughout the reform, thanks to the contributions of the FDI and private economic sector. Private investment flows continue to be an eminent factor that drives the economy growth.

Keywords: Vietnam, Financial economy, Transition, Financial time series, Corporate Bond Market

JEL Classification: C12, C22

Suggested Citation

Vuong, Quan Hoang, The Vietnam's Transition Economy and its Fledgling Financial Markets: 1986-2003 (January 15, 2004). Quan Hoang Vuong, FINANCIAL MARKETS IN VIETNAM'S TRANSITION ECONOMY: FACTS, INSIGHTS, IMPLICATIONS, Chapter 3, VDM-Verlag, February 2010, Available at SSRN: https://ssrn.com/abstract=1475530

Quan Hoang Vuong (Contact Author)

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management ( email )

ULB CP 145/01
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+32-2-6504864 (Phone)
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HOME PAGE: http://www.ceb-ulb.com/vuong-quan-hoang.html

Phenikaa University ( email )

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Ha Dong district
Hanoi, Hanoi 100803
Vietnam

HOME PAGE: http://sites.google.com/site/vuongqh2019/

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