The economic growth is an increase in gross domestic product (GDP) by measure the amount of income and products that occurring over some time period.
How is the economist defining the economic growth? The economists define the economic growth as an increase in real gross domestic product (GDP) measured on per capital and the arrangement for inflation. Furthermore, as an economist, they will look carefully at comparisons of GDP per capital between the countries that are absolutely different economic structures and cultural values.
“Growth begins when we begin to accept our own weakness” said by Jean Vanier. It means that if the people want to growth up the economic for their country, the people have to know about the country weakness and finding out the solution together to solving the country’s problems.
This assignment is going to discuss about the country with slow economic growth and what are the problem faced by them and what are the solution to solve these problems.
The economic growth is an increase in gross domestic product (GDP) by measure the amount of income and products that occurring over some time period. When the economic growth is increasing, it will bring many advantages.
The advantage of economic growth is improving the living standards. Furthermore, the positive effects on government finances because of government benefits and increase employment opportunities are also the advantages. At the movement, the people will not be unemployed and have a stable life. The last advantage is improving the confidence of firms and consumers which may lead to an increase in investment.
Country with low economic growth
The country which is in a slow economic growth is Vietnam. In Vietnam, the people are increase the economic growth with agrarian, subsistence, and village-oriented. The sources of economic are come from many sector, such as agriculture, fishing, forestry, mining and minerals, Industry and manufacturing, energy and tourist. The below are table show about the Vietnam GDP from 2003 to 2010.
GDP – real growth rate
Date of Information
From the 16th century, the Confucianism was losing its influence in Vietnamese society. The money economy was develops on a negative ways. The early commercial ports such as Hoi An were forced and foreign countries with their different cultures and their invasion ambitions were seen as a theat. Finally, this policy led to a degree of stagnation in the Vietnamese economy and finally Vietnam becomes the French colony.
Until French colonization in the mid-19th century, Vietnam’s economy had been stationary with agrarian, subsistence and village-oriented. The French colonizer is intentional developed differently. The import and export have been divisions into the north and south in 1954. The south is for agricultural and the north is for manufacturing. Besides that, the development of exports the coal is from the north and the rice is from south. The French do this is to stimulate the internal commerce.
During the year 1954 to 1975, the second Indonesia war was seriously affected the Vietnam’s economy. The Vietnam economy drops seriously and worsened by the country’s 1.5million military and citizen deaths and its later about one million of refugees, including tens of thousands of workers who are intelligent and can help to improve the economy of country.
After that, the government set up a Second Five-Year Plan start in the year 1976 to 1980. The plan they want to achieved between the year are increase the average annual growth rates of 16 to 18 percent in industry sector, 8 to 10percent in agriculture and 13 to 14 percent in national income. Furthermore, they also aimed to combine the north and south again. In the end, the plans aims were not achieved and the economy remained dominated by small-scale production, low labor productivity, unemployment, lack material and technological and insufficient and consumer goods. By following, the Vietnam Third Five-Year Plan was begun in the year 1981 to 1985. This plan is to comprise between ideological and pragmatic fractions. They emphasized the development of agriculture and industry. Efforts were also made to put down the power of government while planning and improve the managerial skills of government officials.
From 1970 to 1990, the Vietnam becomes a member of Comecon and trade with the Soviet Union and its allies. After the dissolution of the Comecon, Vietnam was forced to freedom trade, devalue its exchange rate to increase exports and embark on a policy of regional and international economic capitalization.
In 1986, Doi Moi reforms a centralized economy to a ‘socialist-oriented market economy’. In the year 1990, the business and agricultural is success and evident after reforms under the Doi Moi and the economy was growing at an annual rate of more than 7%, and the poverty was decrease nearly halved. The GDP fell in 1998 to 1999 because the government still holds a tight rein over major state sectors of the economy.
Vietnam had a average growth in GDP of 7.1% per year from 2000 to 2004 and the GDP growth in 2005 was 8.4%. On 7th November 2006, Vietnam became the World Trade Organization’s (WTO)150th member. Vietnam’s access to WTO was intended to produce an excellent economic growth to Vietnam, to ensure the continuation of open reforms and create options for trade expansion. The serious challenges were also provided to Vietnam to increased foreign competition.
The problems faced by the country
Vietnam is facing many problems in their country. The first problem is population. In Vietnam, the population is around 80 million, is the second largest country in Southeast Asia after Indochina. After the Vietnam War, the population is rising rapidly. Increasing population density, pressure on ageing infrastructure and worsening environmental damage prompted a policy of applying does not encourage a families have more than two children. Although the population is slow down, but the previous high rate of young population have make the strains on the education system and labour market.
The second problem is poverty, the poverty is still appear in the rural areas. The increasing of cities affluence has cause the migration from the poor rural provinces into the cities and provides the social problems there. The salary for the low-skill jobs is very less and the unemployment rate is high.
The third problem is Health. Most of the hospitals are in antiquated colonial buildings. In the hospital, there are only consists a basic equipment and the medical staffs are lack of skills and experience. Moreover, the poor people who are sick refused for treatment and medication because they do not have money to pay.
The fourth and is controlling smuggling. Smuggling now is seriously in Vietnam. Smuggling is on a massive scale, mostly between Vietnam and China. About a quarter of Vietnamese ‘import’ may be entering the illegally across its long, porous border with its mighty neighbour.
The last problem is pollution. The flora and fauna and the habitat destroy are not only threat by the pollution. The flora and fauna destroy also caused by poaching and illegal logging especially in the poor rural areas. This problem cause the people cannot have a good standard of living.
Recommendation to the country
People are a good thing to the country but the population growth is still need to have a limit. About the population problem, the government can reform tax in a way that encourages couple to have no more than two children. The couple still be able to have, but the tax code would no longer subsidize more than two.
The second problem is about poverty. The poverty was happened because the people are lack of knowledge. So, the government and citizen need to give the best education to the children. When the children are growing up, they will have the knowledge and develop the country to decrease the poverty percent. The government can also increase the tax of the rich people and using the tax to pay for the poor people and some social activities.
The third problem is about the health. In Vietnam, there are consists only the basic equipment and some unprofessional staff in the hospital. For this problem, the government needs to provide the modern equipment, some medicine and increase the knowledge of every staff. Furthermore, the price for the treatment must be able to pay by some poor people.
To control the smuggling, the government has to strengthen the law like increase the amount of fine and send to jail about 50 years. The lecturer also needs to give some speech to the new generation to make sure they will not involve in the negative activities.
The pollution in Vietnam is very seriously. To solve the problem, the citizens have to cooperate between each other to plant the tree to improve the standards of living. Moreover, government also needs to strengthen the law to stop them to continue illegal logging and poaching.