It's clear that much has changed in Southeast Asia since the Vietnam War. Over the past 25 years, Vietnam has transformed itself. In 2007, Vietnam became a full-fledged member of the global economic community through its membership in the World Trade Organization. It has become a magnet for foreign investment and is evolving rapidly from an agricultural economy to one focused on higher-value manufacturing and services. But if Vietnam wants to sustain its remarkable growth, it will need to boost labor productivity in the industrial and service sectors in the years ahead.
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Here are 10 takeaways from the McKinsey Global Institute report "Sustaining Vietnam's Growth: The Productivity Challenge" that might surprise you.
1. Vietnam has grown more rapidly than any other Asian economy except China.
Vietnam, a country once ravaged by war, has been one of Asia's economic success stories over the past quarter-century. Ever since the Communist Party introduced reforms known as "Doi Moi" ("Renovation") in 1986, the country has reduced barriers to trade and capital flows and opened the economy more widely to private business. During this period, the economy has expanded faster than any other Asian economy except China's, posting annual per capita GDP growth of 5.3 percent. This growth has continued in the face of the 1990s Asian financial crisis and the recent global economic downturn (the economy grew 7 percent per year from 2005 to 2010) -- a more robust record than many other Asian economies can boast.
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