chapter  6
23 Pages

Public debt sustainability and fiscal vulnerability in Viet Nam


Following the initiation of “Doi Moi” reforms in the late 1980s,1 Viet Nam embarked on a farreaching program to liberalize its previous, centrally planned economic system, open up to international trade and capital flows, and create the institutions for a market economy (Riedel and Comer 1998; IMF 2008; World Bank 2010a, b). As a result, Viet Nam has become one of the fastest growing economies in Asia and has moved from low-to middle-income status at the World Bank within the space of two decades. And, even though the last few years have been characterized by severe macroeconomic instability, Viet Nam’s economic prospects continue to be viewed very positively, provided it can deepen and broaden its reform program (IMF 2010; ADB 2011b).