Unit 7: Economic Reforms - Reading

Exercise 1: Choose the word or phrase that best fits the blank space in the following passage. In 1986 Vietnam (1)_____ a political and economic innovation campaign (Doi Moi) that introduced reforms intended to facilitate the transition from a centralized economy to a “socialist-oriented market economy.” Doi Moi combined government planning with free-market incentives. The program abolished agricultural (2) _____, removed price controls on agricultural goods, and enabled farmers to sell their goods in the marketplace. It encouraged the establishment of private businesses and foreign investment, including foreign-owned (3) _____. By the late 1990s, the success of the business and agricultural (4) _____ ushered in under Doi Moi was evident. More than 30,000 private businesses had been (5) _____, and the economy was growing at an annual rate of more than 7 percent. From the early 1990s to 2005, poverty (6) _____ from about 50 percent to 29 percent of the population. However, progress varied geographically, with most prosperity concentrated in urban areas, (7) _____ in and around Ho Chi Minh City. In general, rural areas also made progress, as rural households (8) _____ in poverty declined from 66 percent of the total in 1993 to 36 percent in 2002. (9) _____ contrast, concentrations of poverty remained in (10) _____ rural areas, particularly the northwest, north-central coast, and central highlands.

Exercise 2: Read the passage carefully, then choose the correct answer. The July 13, 2000, signing of the Bilateral Trade Agreement (BTA) between the U.S. 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 will 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. On January 11, 2007, Vietnam became WTO’s 150th member, after 11 years of preparation, including 8 years of negotiation. Vietnam’s access to WTO should provide an important boost to Vietnam's economy and should help 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 Second Indochina War (1954-75) and repressive economic measures introduced in its aftermath. Whether rapid economic growth is sustainable is open to debate. The government may not be able to follow through with plans to scale back trade restrictions and reform state-owned enterprises. Reducing trade restrictions and improving transparency are keys to gaining full membership in the World Trade Organization (WTO), as hoped by mid-2006. The government plans to reform the state-owned sector by partially privatizing thousands of state-owned enterprises, including all five state-owned commercial banks.