Note on Vietnam's Business Climate
2003 | Case No. IB46
This note outlines the business climate faced by entrepreneurs in reform-era Vietnam around 1996. The most remarkable aspect of Vietnam’s reforms was that, despite the lack of official privatization, the private sector burgeoned and was the impetus to Vietnam’s impressive economic growth. Entry of new firms had been a powerful force in Vietnam—strikingly so, given the absence of the market-supporting institutions that are normally thought to be a prerequisite to entrepreneurship. Entrepreneurs had to overcome a host of impediments, for which they often devised their own ad hoc strategies: markets were geographically restricted, financial markets were inaccessible to most entrepreneurs, licensing regulations were onerous, corruption was rife, state-owned enterprises continued to be powerful, and there was little legal basis for private transactions.
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