[QODLink]
Asia-pacific
Vietnam's economy runs out steam
Reforms assume urgency as property-market collapse hits banks, inflation rises and credit rating gets downgraded.
Last Modified: 04 Oct 2012 16:37

Vietnam has had one of the fastest growing economies in the developing world. In 2007, the country got more foreign investment than the Philippines, Thailand and Indonesia combined.

However, inflation is high and the country's credit rating has just been downgraded.

The economy is still growing at 4.7 per cent, but abandoned construction sites offer evidence that Vietnam is not quite the Asian Tiger it was a few years ago. And the collapse of the property market has left banks in a mess.

Officially bad debts stand at 10 per cent of their portfolio, but experts say it is probably more like 15 per cent of loans that will not be repaid.

The government says that by next year it will have reformed its policies and the economy will be much healthier. But many of those who have benefited most from the boom years are also in powerful positions.

Reform would mean relinquishing control and, as Al Jazeera's Wayne Hay reports from Hanoi, that is something they may not be prepared to do.

170

Source:
Al Jazeera
Topics in this article
People
Country
City
Featured on Al Jazeera
An innovative rehabilitation programme offers Danish fighters in Syria an escape route and help without prosecution.
Street tension between radical Muslims and Holland's hard right rises, as Islamic State anxiety grows.
Take an immersive look at the challenges facing the war-torn country as US troops begin their withdrawal.
Ministers and MPs caught on camera sleeping through important speeches have sparked criticism that they are not working.
Featured
Anti-government secrecy organisation struggling for relevance without Julian Assange at the helm.
After decades of overfishing, Japan is taking aim at increasing the number of bluefin tuna in the ocean.
Chinese scientists are designing a particle-smashing collider so massive it could encircle a city.
Critics say the government is going full-steam ahead on economic recovery at the expense of human rights.
Spirits are high in Scotland's 'Whisky Capital of the World' with one distillery thirsty for independence.