1.     Developments since 1997

Vietnam's economic stance following the 1997 Asian Financial Crisis, East Asian recession has been a cautious one, emphasizing macroeconomic stability rather than growth. While the country has shifted toward a more market-oriented economy, the Vietnamese government still continues to hold a tight rein over major state sectors of the economy, such as the banking system, state-owned enterprises, and areas of foreign trade.[12] GDP growth fell to 6% in 1998 and 5% in 1999.

The July 13, 2000, signing of the Bilateral Trade Agreement (BTA) between the USA and Vietnam was a significant milestone for Vietnam's economy. The BTA provided for Normal Trade Relations (NTR) status of Vietnamese goods in the U.S. market. Access to the U.S. market is expected to allow Vietnam to hasten its transformation into a manufacturing-based, export-oriented economy. It would also concomitantly attract foreign investment to Vietnam, not only from the U.S., but also from Europe, Asia, and other regions.

In 2001 the ruling Communist Party of Vietnam approved a 10-year economic plan that enhanced the role of the private sector while reaffirming the primacy of the state.[11] Growth then rose to 6% to 7% in 2000-02 even against the background of global recession, making it the world's second-fastest growing economy. Simultaneously, investment grew threefold and domestic savings quintupled.

In 2003 the private sector accounted for more than one-quarter of all industrial output.[11] However, between 2003 and 2005 Vietnam fell dramatically in the World Economic Forum's Global Competitiveness Report rankings, largely due to negative perceptions of the effectiveness of government institutions.[11] Official corruption is endemic, and Vietnam lags in property rights, the efficient regulation of markets, and labor and financial market reforms.[11]

Vietnam had an average growth in GDP of 7.1% per year from 2000 to 2004. The GDP growth was 8.4% in 2005, the second largest growth in Asia, trailing only China's. Government figures of GDP growth in 2006, was 8.17%. According to Vietnam's Minister of Planning and Investment, the government targets a GDP growth of around 8.5% for 2007.[13]

On November 7, 2006, Vietnam became the World Trade Organization (WTO)'s 150th member, after 11 years of preparation, including 8 years of negotiation. Vietnam's access to WTO was intended to provide an important boost to Vietnam's economy, to ensure the continuation of liberalizing reforms and create options for trade expansion. However, WTO accession also brings serious challenges, requiring Vietnam's economic sectors to open the door to increased foreign competition.

Although Vietnam’s economy, which continues to expand at an annual rate in excess of 7 percent, is one of the fastest growing in the world, the economy is growing from an extremely low base, reflecting the crippling effect of the Vietnam War (1954–75) and austerity measures introduced in its aftermath.

US Economy Adds Jobs for Third Month in Row

Meredith Buel

Washington

07 Nov 2003, 19:20 UTC

The U.S. economy has gained jobs for a third month in a row.

New figures released by the U.S. Labor Department show businesses hired 126,000 people in October. That is twice the number expected by economists.

The jobless rate fell by .1 percent to six percent, indicating economic growth in the United States has translated into more jobs.

The economy grew at a sizzling 7.2 percent in the third quarter. But partly due to large gains in productivity, the job market has been lagging behind other indications of the economic recovery.

A major portion of the increase in payrolls came from the service sector. Jobs were also created in the retail industry, education and health care.

Manufacturing continued to lose jobs in October, but at a slower pace than in previous months.

Economist Ken Mayland says business owners and managers are now feeling more confident about the economy, and have started to hire new workers.

"I think we are finally breaking through to the point where there is some increasing belief that, hey, maybe this economy is on a sustainable path to decent economic growth, and now it is time to put some bodies to work in the form of permanent new hires," he said.

Unemployment is an important political issue ahead of next year's presidential election, because the U.S. economy has lost at least 2.6 million jobs since President Bush took office in January 2001.

Mr. Mayland says he expects, with the improving economy, two million new jobs will be created between now and when voters go to the polls next November.

"With this economy now producing meaningful job gain, I think we are going to see some significant decline of the unemployment rate, maybe as much as a half a percentage point," he said. "If that in fact happens, that is going to figure prominently in President Bush's re-election chances. That is an economic call, that is not a political call on my part."

Mr. Mayland says the increase in hiring puts to rest what some economists have been calling the "jobless recovery."

He expects consumer confidence to rise as unemployment rates fall.

Mr. Mayland says the good economic news comes at the best possible time for businesses, just as the holiday shopping season is about to get under way.

Japanese Automaker Toyota Reports Record Earnings

Amy Bickers

Tokyo

07 Nov 2003, 14:31 UTC

Japan's largest automaker reports record earnings while the country's top cosmetic maker sees its profit slide.

Toyota Motor is powering ahead, becoming Japan's largest company by market value and reporting record sales and profit for the first six months of the year.

Toyota's market capitalization, the value of its shares, on the Tokyo Stock Exchange now totals about $112 billion, surpassing mobile phone giant NTT DoCoMo, the previous market leader.

Toyota said this week that its net profit rose 23 percent to $4.8 billion for the first half of the year compared with the same period last year. Revenue rose eight percent to $75 billion. Toyota credits cost cutting and global marketing efforts for its strong results.

Managing Director Takeshi Suzuki tells reporters that he is pleased with the company's performance. He adds that the automaker is increasing local production around the world to minimize the effects of volatile currency exchange rates.

Toyota says it aims to control 15 percent of the world auto market by 2010, up from the current level of just over 10 percent.

Japan's second biggest automaker, Honda, is recalling almost 700,000 vehicles in the United States and Canada because of a defect.

Honda says it will recall five models including the popular Accord sedan because of a faulty mechanism that causes parked cars to roll. The recall will cost the company $32 million.

The U.S. National Highway Traffic Safety Administration says there have been four injuries linked to the defect and more than 100 complaints have been made about it.

Japan's biggest cosmetics maker posted weak earnings. Shiseido say its net profit declined 34 percent in the first half of the fiscal year to $60 million, from the same period a year earlier.

Overseas sales, which account for a quarter of the company's revenue, were down sharply. Many Japanese women buy cosmetics overseas at duty-free shops where they are less expensive. But many would-be travelers stayed home this year because of the U.S.-led war in Iraq and the outbreak of Severe Acute Respiratory Syndrome.