The Role of Vietnamese Economic Reform in the Expansion of Middle Class in Vietnam

Abstract

Vietnam’s economy has been growing rapidly in recent years. It is assumed that Vietnam may be the fastest growing of Southeast Asia’s emerging economies by 2025. Vietnamese people’s income has improved significantly. As a result, there are a lot of new industry areas and urban, modern cities have been built in Vietnam. Nevertheless, the amount of middle class, which is the most im-portant class in an economy, in Vietnam is also increasing.

The purpose of this research is to investigate the role of economic reforms in Vietnam in the ex-pansion of Vietnam’s middle class. In addition, the readers will learn more about Vietnam’s econ-omy before and after economic reforms. They will also know how changes the reforms has made to Vietnamese people.

The thesis is a literature review, it used economic data from the World Bank, Vietnamese govern-ment sites and other sources were analyzed. Various measures of economic development were tested to achieve the results of this study.

The evaluation of data collected indicates that despite the expanded efforts and planning under the Doi Moi reform in 1986, which have resulted in impressive growth of the country, there has not been a significant expansion of the middle class. The middle class is just improving in big cities such as Hanoi and Ho Chi Minh City. There is a huge gap of income between people in urban areas and the ones who live in countryside.

Based on the results, the recommendation for government are given. It also has some initial thoughts on the problems of defining and delimiting the middle orders of society as well as the reasons behind those problems which has been preventing Vietnam from becoming an advanced country, a country worth living such as Singapore and Malaysia.