ABSTRACT
This chapter argues that while further growth is possible under present policies, significant changes are needed if Viet Nam is to catch up with its wealthier neighbors. It explores the interaction of politics and economics that will decide whether those changes are adopted. The chapter discusses the Asian financial crisis and Viet Nam's responses to it. It examines the nature of the financial crisis in the region. The chapter focuses on the political challenge of keeping reform on track. Economic shocks stimulate economic policy reform, but it is history and institutions that do most to shape reform's long-term path. For Viet Nam, economic reform in the 1980s necessarily involved transition from a centrally planned economy to a market economy. The International Monetary Fund, the Asian Development Bank, and a succession of visitors, including Lee Kwan Yew, have echoed the World Bank in urging Hanoi to take up reform's unfinished tasks immediately.
