In Vietnamese provinces with good initial conditions - such as strong infrastructure, closeness to markets, and ample skilled workers - private firms have multiplied in number and generally performed well. However, in Vietnam’s periphery provinces (ie. those with fewer advantages, and consequently lower levels of economic growth), private firms have made some progress, but continue to lag behind those in the more well-endowed provinces. This study was undertaken in order to better understand which factors promote and hinder the development of the private sector in Vietnam’s periphery provinces.
There are four main reasons why such a study, that makes an explicit comparison between the high performing provinces and the provinces farther down the spectrum of economic development, is necessary. First, from a methodological perspective, early efforts at private sector development were limiting, in that they tended only to identify the necessary - but not the sufficient - conditions for private sector success. Second, it would be a little shortsighted to believe that best practices in the more successful provinces could be extrapolated nationally, without a greater recognition of the specific differences between provinces. Thus, private sector development programs should be tailored, to some degree at least, to the specific needs of local entrepreneurs in specific locations. Third, studies of periphery provinces in other transition economies have proved highly fruitful in generating policy-pertinent findings. Finally, a few of the periphery provinces in Vietnam have begun to develop quite rapidly, particularly in the wake of the Enterprise Law of 2000. As a consequence, MPDF, AusAID, the World Bank, and IFC funded a joint study of eleven provinces, including the high performers and six other medium and low performers (in terms of the size of the private sector relative to total population). This report draws on data collected for that study, and offers a depiction of the environment for private sector development in these provinces.
November 2004
Full report English 
(678kb) | Full report Vietnamese 
(2.3MB)
