the rigidities of a
centrally planned economy. Substantial progress has been achieved
over the past 10 years in moving forward from an extremely low
starting point, though the regional downturn is now limiting that
progress. GDP growth of 8.5% in 1997 fell to 4% in 1998. These
numbers masked some major difficulties that are emerging in economic
performance. Many domestic industries, including coal, cement,
steel, and paper, have reported large stockpiles of inventory and
tough competition from more efficient foreign producers, giving
Vietnam a trade deficit of $3.3 billion in 1997. While disbursements
of aid and foreign direct investment have risen, they are not large
enough to finance the rapid increase in imports; and it is widely
believed that Vietnam may be using short-term trade credits to
bridge the gap--a risky strategy that could result in a foreign
exchange crunch. Meanwhile, Vietnamese authorities continue to move
slowly toward implementing the structural reforms needed to
revitalize the economy and produce more competitive, export-driven
industries. Privatization of state enterprises remains bogged down
in political controversy, while the country's dynamic private sector
is denied both financing and access to markets. Reform of the
banking sector is proceeding slowly, raising concerns that the
country will be unable to tap sufficient domestic savings to
maintain current high levels of growth. Administrative and legal
barriers are also causing costly delays for foreign investors and
are raising similar doubts about Vietnam's ability to maintain the
inflow of foreign capital. Ideological bias in favor of state
intervention and control of the economy is slowing progress toward a
more liberalized investment environment.

GDP: purchasing power parity--$134.8 billion (1998 est.)

GDP--real growth rate: 4% (1998 est.)

GDP--per capita: purchasing power parity?$1,770 (1998 est.)

GDP--composition by sector:
agriculture: 28%
industry: 30%
services: 42% (1996 est.)

Population below poverty line: 50.9% (1993 est.)

Household income or consumption by percentage share:
lowest 10%: 3.5%
highest 10%: 29% (1993)

Inflation rate (consumer prices): 9% (1998)

Labor force: 32.7 million

Labor force--by occupation: agriculture 65%, industry and services
35% (1990 est.)

Unemployment rate: 25% (1995 est.)

Budget:
revenues: $5.6 billion
ex