Jonathan Pincus, dean of the Fulbright Economics Teaching Program, said Vietnam’s approach to lower middle-income status is still based on growth that draws from “moving people out of very low-productivity activities.
Growth for middle-income countries must be based on “mastering new technologies, producing more sophisticated goods, breaking into new markets and improving workers’ skills,” Pincus said.
The country’s development has been “passive,” dependent on the “liberalization effect” after doi moi and large inflows of investment, capital and aid, and unable to create “internal value” to ensure sustainable growth.
Vietnam is still some years away from the middle-income trap, he said, “but since it takes a long time to build the institutions of a modern economy, it is never too early to start.”
Why do I like this article so much? Because it show the reality: Vietnam may developed a middle class, but this class represents a small percentage and is mainly based on cash. People got rich and wealthy by selling assets like land and gold, some by getting licences from foreign companies. The Vietnamese value comes only from rice, coffee and fish. There is no industrial good Vietnam is able to export. Beside food there is not much left that is produced in Vietnam. so the country needs innovation and improvment. That's the challenge for 2010.