Choosing SuccessHarvard Vietnam ProgramJanuary 2008Page 2 of 56
The Lessons of East and Southeast Asia and Vietnam’s Future
A Policy Framework for Vietnam’s Socioeconomic Development, 2011-2020
In the early 1990s the Harvard Vietnam Program compiled a series of strategy papers entitled
InSearch of the Dragon’s Trail
, the objective of which was to provide a framework for setting policy priorities and making economic policy decisions.
In Search of the Dragon’s Trail
was tailored to therealities of an economic moment that has passed. The regional economic crisis in 1997 exposedunderlying weaknesses of certain aspects of East and Southeast Asia’s development. Perhaps moreimportantly, the structure of the global economy has continued to evolve. Trade liberalization hascreated truly global markets for manufactures and increasingly for services. Two decades of mergersand acquisitions on an unprecedented scale have created massive global corporations at the apex of supply chains that penetrate deeply into the production systems of developed and developingcountries alike. Developing countries can no longer rely on industrialization strategies that haveworked in the past and must continually reassess their positions in light of rapidly changing trends inforeign investment, financial markets, technology and demography.Vietnam is also a very different country today. Many Vietnamese have escaped poverty and thecountry’s economy has grown rapidly. This success is due in part to far-sighted decisions by thegovernment to liberate the productive forces of society and integrate into the international economy.As a result of these changes, the Vietnamese economy is today much more complex, and deeplyintegrated. It is likely that the decision-making process is more heavily contested; politicaldecentralization and the rise of influential interest groups make it easier to maintain equilibrium thanto press ahead with additional reforms. In contrast to the urgency of the early years of
widespread optimism—nurtured by increasing foreign direct investment and lavish praise from donorsand the international media—is breeding a sense of complacency and satisfaction with the status quo.In light of these changes,
In Search of the Dragon’s Trail
is today perhaps more valuable to historiansthan to policymakers.
This paper provides a new framework for setting priorities and making strategic decisions, one that istailored to the realities of the Vietnamese and global economies of the early 21
century. The paper argues that from a development perspective, East Asia—defined here as Korea, Japan, Taiwan, HongKong and Singapore—has on the whole been more successful than Southeast Asia, defined here asThailand, Indonesia, Malaysia, and the Philippines. This paper views China as a special case: itsgeographic location, cultural traditions, extremely rapid economic growth, and the high quality of itselite institutions of higher learning are decidedly East Asian, yet today China suffers from many of theweaknesses that derailed Southeast Asian countries. For Vietnam, whose development strategy issimilar to China’s in many respects, the implications of this analysis are significant. Vietnam mustfollow an East Asian development trajectory but does not have recourse to many of the policy
This study, which is based on a paper by David Dapice, incorporates research by Dwight Perkins, NguyenXuan Thanh, Vu Thanh Tu Anh, Huynh The Du, Jonathan Pincus, and Tony Saich, all of whom also contributedto the text, which was edited by Ben Wilkinson. Research funding was provided by the United Nations inVietnam
In the Dragon’s Trail
relied primarily on comparative experience; its primary authors were internationalexperts who, with some exceptions, were not Vietnam specialists. Since this work was published, Harvard hasdeveloped a far more sophisticated and nuanced research capacity consisting of Vietnamese experts workingclosely with international colleagues. The center of Harvard’s Vietnam-based activities is the Fulbright Schoolin Ho Chi Minh City, which provides economics and public policy training to Vietnamese officials. Moreinformation is available athttp://www.fetp.edu.vn.