The Economy of VietnamVietnam's greatest economic resource is its literate and energetic population. Its long coastline provides excellent harbors,access to marine resources, and many attractive beaches and areas of scenic beauty that are well suited to the development of tourism; a lack of infrastructure,however, has inhibited full utilization of these assets.
The actual potential for economic growth based on Vietnam's wealth of natural resources, however,is being rendered increasingly problematic by population growth, environmental degradation, and rising domestic demand, and the country remains one of the poorestin the world.While inflation is a growing challenge across the region, the causes and the scale of the problem are very different in Vietnam. Across Asia,capital inflows have been driving prices higher while in Vietnam, rapid credit growth and wasteful spending by state-owned companies lies at the root of theproblem.In Vietnam, consumer prices rose by 13.9 per cent year-on-year in March.
The extent of the credit expansion in Vietnam over recent years has raised fearsabout financial contagion, especially in light of the problems at Vinashin, the state-owned shipbuilder that is unable to pay its foreign debt at present.