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PESTEL Viet Nam Analysis Essay

A. Introduction of Viet Nam

Vietnam is approximately 331688 km2 in area and occupied the eastern coast of the Southeast Asian peninsula. The northern part of the country part consists mostly of highlands and the Red River Delta. The south is divided into coastal lowlands and extensive forests. Because of differences in latitude and the marked variety of topographical relief, the climate tends to vary considerably from place to place. During the winter or dry season (November to April), the monsoon wind blowing from the northwest brings considerably moisture. Consequently the winter season in most parts of the country is dry. Major Vietnamese cities include Hanoi in the north, Da Nang in the mid coastal region, and Ho Chi Minh City (formally known as Saigon) to the south. Vietnam has considerable energy resources such as oil, gas and coal and its 41,000 km long waterways provide the basis for hydropower. The country is rich in minerals such as bauxite, iron ore, lead, gold, precious stones, tin, chromate, anthracite, granite, marble, clay, white sand and graphite. In addition, Vietnam has a considerable fresh and saltwater fauna, dense tropical forestry resources and it possesses great agricultural potential.

The history of Vietnam, reference to the Geneva Accord signed in 1954. The accord ended French colonial rule, and the country was partitioned into the Democratic Republic of Vietnam, led by Ho Chi Minh and the Republic of Vietnam in the South. The capitals were Hanoi for the North and Saigon for the South. Fights led by Ho Chi Minh to unite the country started in 1959 and lasted until 1975. Hanoi became the capital of the country whilst Saigon was renamed Ho Chi Minh City. Following reunification, the Vietnamese government’s initial plan was to manage the economy via methods of central planning. Based on experiences gained during the 1976-1980 five years plan, subsequent central plans introduced more relaxed policies with respect to agricultural collectives, State Owned Enterprises and allowed more scope for private initiatives. These measures were instrumental in elevating poverty. Growth rates during the early 80’s were higher than during the 1976-1980 five year plan, however it became evident that further policy shift were necessary to enable the Vietnam economy to perform closer to its potential. Economic reform was the key point of discussion at the Sixth National Party Congress held in December 1986. The process then initiated of moving from a centrally planned economy to an open, socialist-oriented and multi-sector market economy known as Doi Moi (renovation). In 1992, the National Assembly revised the post-unification constitution to better reflect the aspirations articulated in the Doi Moi process. Economic performance since 1986 has justified the policy of relaxation of central control, the challenge faced by Vietnam has been the maintenance of rapid economic growth and integration into the global economy.

1. Politics

The Socialist Republic of Vietnam is a single-party state. Its current state constitution, which replaced the 1975 constitution in April 1992, asserts the central role of the Communist Party of Vietnam in all organs of government, politics and society. In 2011, Viet Nam held the 11th Congress of Vietnam Communist Party, in which happened the Election of the Party Central Committee for the new term. Mr. Nguyen Phu Trong was elected to be the General Secretary. After the Congress, there happened the fist Congress of the Parliament, term 13th, in which Mr. Nguyen Sinh Hung was elected to be the President of the Parliament, Mr. Truong Tan Sang the President of the Country, and Mr. Nguyen Tan Dung was elected to continue the position of Prime Minister. This Congress also issued 4 degrees: first, approving the State Budget, second, agreeing on the program of building laws and ordinances in2012, third, beginning the study of the amendments and supplements of the 1992 Constitution and establishing the revised draft of the 1992 Constitution, and finally, the degree on the issuance of certain additional tax measures to remove difficulties for enterprises and individuals, contributing to economic development in 2011. In 2011, the disputes over the East Sea was the main cause of some changes in relations between Vietnam and some important countries in the world, especially the Vietnam – China and Viet Nam – U.S. Tension in the East Sea has escalated due to China’s provocative acts in May, 2011. Then happened many anti-Chinese protests in Ha Noi and Ho Chi Minh city. In this context, the relation between Viet Nam and the U.S was proclaimed to be elevated to strategic partnership.4 And late 2011, the tensions in the Vietnam-China relations down to the visit by the senior officials of the two countries.

In terms of politically domestic policy, the government kept a political stability, and showed some positive signs. For example, the freedom of the press seemed to be extended. In addition, the government was also more aware of its limitations and of the policy mistakes. Concretely, at the Fourth Conference of the Party Central Committee (XI), Mr. Nguyen Phu Trong said: ―Besides the achievements, the Party building work still has many limitations and shortcomings, weaknesses, even spanning multiple defects; these limitations would reduce people’s trust in the Party; if not corrected, they will be the challenge for leadership of the Party and the survival of the regime.

2. Economy

The year of 2011 was important for the economy of Viet Nam because this is the first year in the latest Socio-Economic Development Strategy (2011-2020), with the goal of becoming an industrialized and modern economy by 2020. This strategy goes on to identify the country’s key priorities to meet this ambitious target: stabilize the economy, build world-class infrastructure, create a skilled labor force, and strengthen market-based institutions. According to Vietnam Development Report (VDR) 2012, meeting these aspirations will not be easy. In fact, the country has experienced bouts of macroeconomic turbulence in recent years—double-digit inflation, depreciating currency, capital flight, and loss of international reserves—eroding investor confidence. Besides, rapid growth has revealed new structural problems. The quality and sustainability of growth remain a source of concern, given the resource-intensive pattern of growth, high levels of environmental degradation, lack of diversification and value addition in exports, and the declining contribution of productivity to growth. Vietnam’s competitiveness is under threat because the power generation has not kept pace with demand, logistical costs and real estate prices have climbed, and skill shortages are becoming more widespread. And these difficulties strongly existed in 2011. Concretely, the inflation in 2011 was 18.13%; the growth of GDP has slowed (5,89%). Domestic and international gold price gap increased. The Corruption index 2011 from Transparency International ranked Viet Nam at the position 112.

This shows that Viet Nam has been faced one of the most difficult challenges of economic development. In terms of financial, according to the document of World Bank, in 2011, foreign direct investment inflows (to Viet Nam) continued at a steady pace, although new commitments declined. International reserves increased in the first half of the year while the Vietnamese dong benefitted from a period of relative calm. In the last quarter of the year, however, exchange rate fluctuations increased due to volatility in gold prices, deepening uncertainties and the seasonal increase in demand for foreign currency as the year end approaches. With approximate 9 billion U.S. dollars, the amount of money coming from overseas Vietnamese was one of the biggest sources of foreign currency in 2011. This amount is equivalent to the amount of FDI. Hong Kong, Singapore, and Japanese are the countries that contributed the biggest investment to Viet Nam in 2011. Hai Duong, Ho Chi Minh city, and Ha Noi are three places that has been most invested in recent time. The sectors that most attract the attention of foreign investors are processing industry, electricity supply, and accommodation and dining service. However, according to the analysis of a chief economist, Dr. Allan Pham, though facing the difficulties as mentioned above, the economy is coming to a better prospect in 2012, especially with a certain success in the fight against inflation of the country (the inflation has been trending down since the 4th quarter of 2011).

Following is the figure of the selected macro indicators of the economy in recent years:

Key Indicators
GDP growth (%)
CPI (%)
Trade deficit (USD)
Exports (USD)
Imports (USD)
FDI commitments (USD)
FDI disbursement (USD)
Credit growth (%)
SBV Base rate
Deposit rate (%)
10.0- 11.0
Lending rate (%)
USD/VND (bank rate)

Foreign Affairs

At present, Vietnam has established diplomatic relations with 168 countries, and it has economic and trading relations with about 165 countries. Vietnam joined the United Nations in 1977. Vietnam became an official member of the Association of South East Asian Nations (ASEAN) in 1995, and has concluded a cooperation agreement with the European Community. Relationships with multi-national financial institutions such as the World Bank (WB), the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have been re-established. Viet Nam has been participating in the ASEAN Free Trade Area (“AFTA”) since 1996 and became a member of the Asia Pacific Economic Cooperation Forum (APEC) in 1998. Vietnam became an official member of the World Trade Organization (WTO) on 11 January 2007. In January 2008, the country started a two year term as an elected non-permanent member of the UN Security Council. Vietnam signed the bilateral trade agreement (BTA) with the United States in 2000. Besides aspects of international trade, the BTA covers a variety of other areas, including intellectual property rights, trade in services, development of investment relations, business facilitation and the obligation to ensure transparency of laws and regulations. The BTA essentially constitutes a commitment by both countries to open their markets to each other.

Intellectual Property

In recent years, the Government has taken various measures to increase the legal protection of intellectual property and has created an environment of respect for intellectual property as compared to other neighboring countries. Intellectual property rights are protected by the Civil Code (1995 and 2005), the Law on Intellectual Property (2005) and a host of subordinate legislation. Vietnam is a long-time signatory to the Paris Convention, the Madrid Agreement on International Trademark Registration, and the Patent Cooperation Treaty (“PCT”) and became a member of the World Intellectual Property Organization in 1976. On 27 June 1997, Vietnam entered into an Agreement on copyrights with the US. According to the Viet Nam-US Bilateral Trade Agreement, Vietnam is under the obligation to adhere to the Berne Convention. The National Office of Intellectual Property (“NOIP”) is the authority responsible for the registration of industrial property and for the resolution of disputes with regard to industrial property in the first instance. Foreign organizations and individuals seeking to register their industrial ownership should file their applications through an authorized agent, who will transfer their application to the NOIP. The Office of Copyright Protection under the Ministry of Culture, Sport and Tourism has also been established and is responsible for the protection of copyright. Works may be registered with the Office of Copyright Protection; however, registration is not a prerequisite for copyright protection. Currently, patents are protected for a period of 20 years. A certificate of utility solutions may be granted for 10 years. A certificate of industrial design is granted for 5 years and may be renewed every 5 years. However, the total effective period of a certificate cannot exceed 15 years. Certificates of trademarks are granted for 10 years with no restrictions on the number of renewals.

Investment Guarantees

The Government of Vietnam guarantees fair treatment for investors. Capital and other legal assets of investors will not be expropriated or confiscated by law or administrative measures and businesses with foreign-invested capital will not be nationalized. Foreign investors are allowed to remit abroad investment capital and profits, loan principal and interest, and other legal proceeds and assets. Expatriates working for businesses with foreign-invested capital or for a business cooperation contract are permitted to remit their income abroad. The Vietnam government respects intellectual and industrial property rights and the interests of foreign investors relating to technology transfers into Vietnam.

Economic Risks

Global Finance Crisis is the hottest issues that people discuss most in this few years. The global financial crisis that started from the United States raises a very broad impact to Vietnam.


Inflation has been in double digits since 2007 and peaking at 28% in August 2008. The fiscal deficit accounted for 4.5-5% GDP in 2008 while trade deficit reached US$17.5 billion (or over 20% of GDP), a level that signals vulnerability to a sudden drop in external demand (Figure 2). A high rate of investment combined with a sizeable fiscal deficit resulted in rapid growth in aggregate demand in the first half of 2008. Massive capital inflows generated asset price inflation, especially in real estate and land prices.

Export Decline

Vietnamese exports have suffered the strongest negative impact. With economic problems in the US, EU and Japan, which together account for more than 60% of Vietnamese exports, Vietnam saw a significant decline in export revenues. Vietnam’s export revenues fell 6.5% in November 2008 and a further 24% drop in January 2009 (year-on-year) (Figure 3). Orders for manufactured exports including garments, footwear and furniture dropped quickly, while seafood5 producers are also under pressure. The decline of orders has caused great difficulties for exporting companies, many of them are at risk of closing down.6 Vietnamese exports’ growth is forecasted to decline from 30% in 2008 to 13% in 2009.


Unemployment has worsened. At February 28, 2009, 66,700 workers (out of 45 million workers) lost their jobs in 2008 with national unemployment rate of 4.65%. Thus, it is estimated that over 80,000 workers lost their jobs nationwide in 2008. The latest forecast of Vietnam Labor and Employment Agency estimates the figure to hit 400,000 nationwide in 2009. Job cuts are rising especially in big cities11 with industrial, processing and exporting zones. The situation may worsen in 2009 with an unemployment rate of 5% and at a projected economic growth of 6.5%. High unemployment has already affected domestic demand and consumers’ sentiment in Vietnam, which are bearish in recent months.

3. Socio-Culture

3.1 Education
Viet Nam’s population enjoys a relatively high standard of education. In fact, Confucian ethics has strongly influenced upon Vietnamese’s viewpoint of social values, and education has always been considered as one of the best values that a person should desire to achieve. Nowadays, education has been still considered as one of the most important issues that the country has to pay great attention. Recently, at the 11th Party Congress, the government is determined to develop a national education policy as one of the priorities of the country. As a result, the country has gained big success in education. Concretely, according to the 2009 Census results, there are only nearly four million people who have never attended school (5.0% of the total population aged 5 years and over) and as compared with the 1999 Census this number has decreased 5% (6.9 million people, account for 10.0% of population aged 5 and over). This shows the significant progress of Vietnam’s education sector in minimizing the number of people who never go to school. The official figures also point out that the literacy rate for the population aged 15 years and over increased by 3.7% (from 90.3% in 1999 to 94.0% in 2009).

The female literacy rate increased 4.9%, while the male literacy rate increased 2.2%, significantly narrowing the literacy rate gap between men and women. Ha Noi, Hai Phong and Ho Chi Minh City are three provinces having the highest literacy rate (97.9%) while Lai Chau has the lowest (59.4%). This data shows that the literacy rate was not only increased quite rapidly but also express successes of Vietnam’s gender equality work in the education sector.13 Certainly, besides such successes, Vietnamese education system also has faced many challenges, including poor infrastructure, lack of equipment and teaching materials, low wages precipitating an acute shortage of skilled teachers and academic staff, a relatively poor linkage of higher education with research, production and employment, and some contradictions of the system. As the analysis of RFA, the situation of education in Viet Nam in 2011 had some notable points as following:

There were three positive points of the education in Vietnam in 2011. The first point is the plan of “reducing the load of textbooks” from primary to secondary school of the Ministry of Education and Training. The second is the plan of achieving universal preschool education for children of 5 years old. In this plan, the Ministry of Education will build public kindergartens for children at age 5 in the mountainous areas; and the poor students will be exempt from tuition fees, with the plan of over 95% of children enroll in 2 sessions / day by 2015. And the third is the policy of training and vocational training in poor areas such as the Highlands. On the contrary, there were also many crucially negative points of the education in 2011. First of all, there was the imbalance in enrollment in universities and colleges between students with practical needs. The sectors of social sciences, agriculture, forestry and fishery were registered by only 2.5% of exam registration records (while Vietnam has up to 70% of the population are farmers). And the sectors in demand such as business, tourism … had to be encountered the difference between training and recruitment practices; and this leads to the fact that graduates get difficulty to find job. Secondly, teacher’s salary does not meet their living when inflation is high; and this leads to some problems: the teachers could not focus on their business as they had to find extra jobs, or to open extra classes. Thirdly, there has existed the problem of the degradation in social ethics of many students, due to lack of paying attention on humanity teaching, which can be proved by many cases of students committed violent guilty or crime.

3.2 Human Resource

The national average population in 2011 estimated 87.84 million, up by 1.04% compared to 2010, including male population 43.47 million, (49.5%), and female population 44.37 million, (50.5%). Urban population is 26.88 million, (30.6%); rural population is 60.96 million (69.4 %). According to the official report, the population structure by age in Vietnam is in a positive change. The population in the working age is 46,48 million, increased 0,12% compared to 2010. The proportion of workers in the agriculture, forestry and fisheries declined from 48.7% in 2010 to 48.0% in 2011; in industry and construction rose from 21.7% to 22.4%; and in the services maintained at 29.6%. The unemployment rate in the working age was 2.27% in 2011, of which the urban areas account for 3.6%, the rural areas 1.71%. This is the period of the country with advantages in labor force, also known as the “demographic window period”, which began in 2003 and may last from 30 to 50 years. This is considered as a big advantage for the industrialization and modernization of the country, if it takes advantage of the superiority Vietnamese on the labor force.

3.3 Traffic: Conditions And Problems
Highway system

The road system consists of over 200,000 km network including over 10,000 bridges. However road conditions are not ideal, less than half of the national highways have two lanes or more. In addition, road congestion is increasing in major cities. In recent years, the Government has mobilized a significantly large amount of capital to upgrade the highway system with financial support from international lending agencies.


The rail network consists of about 2,600 km of single–track line covering several routes. There are about 260 stations in the network. The longest and most important route is the Hanoi – Ho Chi Minh City line, which stretches for 1,730 km. This line is now serviced by an express train, which makes the journey in approximately 29.5 hours. The lines connecting Vietnam to China were re-opened a few years ago.

Inland Waterways

Often overlooked by foreign investors, the inland waterway system offers a cheap and flexible mode of transport. Vietnam has more than 2,300 rivers and canals with total length of 198.000 km. Currently, the inland waterway has a system of over 61,000 km. The two major inland waterway systems serve as major transportation outlets. The first major inland waterway system is in the Red River area in the north which stretches for approximately 2,500 km. Along this system there are five main ports, of which Hanoi is the largest. The second major inland waterway extends 4,500 km along the Mekong River and its tributaries in the South and boasts about 30 ports, including Ho Chi Minh City. The larger river vessels are tug-drawn barges. Official estimates put the fleet capacity at about 420,000 tons with speeds ranging from 2 to over 20 km an hour. Smaller, wooden barges are mostly privately owned.


Vietnam has eleven major seaports. Ho Chi Minh City serves most of the South and now boasts modern container loading facilities. Just a few hours’ drive from Hanoi, Hai Phong serves much of the North. Given the rapid rise in trade volume, increasing port capacity is a national priority.

Airports and Civil Aviation

There are three international airports: Ho Chi Minh City, Hanoi and Da Nang. Currently, the Government has significantly upgraded international airports to handle the increase in the volume of traffic associated with Vietnam’s invigorated economy. A new international terminal of the Tan Son Nhat airport in Ho Chi Minh City, capable of handling up to 10 million passengers a year was opened in December 2007. Noi Bai airport in Hanoi was upgraded, enlarged and completed for operation in 2002, construction of a second terminal is expected to start in October 2008 and completed in two years. Four new international airports are planned to be constructed in Phu Quoc, Dong Nai, Lao Cai and Quang Ninh provinces. Preparations for the new Long Thanh International Airport, 40 kilometers from Ho Chi Minh City in Dong Nai province is underway. The airport is scheduled to open in 2010 and by 2015 it will be further expanded to reach an annual transportation capacity of 80 to 100 million passengers, becoming one of the biggest airports in the region. In addition, there are 16 other domestic airports around the country.

Culture and Social

Vietnam is a country located in Southeast Asia, Vietnam is a culturally rich country whose distinct history played a role in the development of the modern day state. Vietnamese practices of Confucianism and showing reverence towards ancestors are evidence of China’s historical influence on Vietnamese society. Vietnam became an independent state in the tenth century but was colonized by the French in the mid 1800s. Vietnam gained independence in the mid twentieth century but still retains traces of French culture which are visible in the way people communicate verbally and nonverbally. Though Vietnam has struggled over the past century through colonial rule, the Vietnam War and recent economic upheavals, it is now rebuilding itself to be able to compete on a global scale. Having a comprehensive understanding of Vietnam’s unique cultural values and traditions can allow the company to develop strong and successful business relationships with Vietnamese counterparts.


Vietnamese is the official language, although there are distinct northern, central and southern dialects and accents. It is a tonal language, with each syllable; there are six different tones that can be used, which change the definition and it often makes it difficult for foreigners to pick up the language. There are other languages spoken as well such as Chinese, Khmer, Cham and other languages spoken by tribes inhabiting the mountainous regions. Although there are some similarities to Southeast Asian languages, such as Chinese, Vietnamese is thought to be a separate language group, although a member of the Austro-Asiatic language family. In written form, Vietnamese uses the Roman alphabet and accent marks to show tones. This system of writing called “quoc ngu”, was created by Catholic missionaries in the 17th century to translate the scriptures. Eventually this system, particularly after World War I, replaced one using Chinese characters (chu nom), which had been the unofficial written form used for centuries.

Non-verbal communication

For certain feelings, Vietnamese people favor non-verbal communication. Vietnamese do not express feeling of thankfulness of apology in verbal communication, but non-verbal through silence or a smile. The proper respectful behavior is to avoid eye contact when talking to person who is not equal status or of the same gender. The smile is another non-verbal symbol conveying the feeling of respect in Vietnamese culture. It is used as an expression of apology, or as expression of embarrassment. For the Vietnamese a smile is a proper response in most situation in which verbal
expression is not necessary, or appropriate.


The teachings of Confucius influence the Vietnamese describe the position of the individual in Vietnamese society. Confucian teachings emphasize the importance of relationships, responsibility and obligation. This philosophy is still a vital component of Vietnamese society and is prevalent in Vietnamese business culture in conserving the harmony of the collective good. The basic tenets are based upon five different relationships:

Ruler and subject

Husband and wife
Parents and children
Brothers and sisters


As like other group-oriented societies, Vietnam hierarchical structures are very much based upon age and status. This derives from Confucianism, which emphasizes social order. Everyone is seen as having a distinct place and role within the hierarchical structure, be it the family or workplace. An obvious example is seen in social situations where the oldest person in a group is greeted or served first. Within the family the head would be responsible for making decisions and approving marriages. Therefore companies that want to invest in Vietnam are made sense to give more authority to local managers to control the subordinates. The organization structure can be designed as hierarchical, with power derived from prestige, force, and inheritance.


Vietnam is a collectivist society in which the needs of the group are often placed over the individual. Family and community concerns will almost always come before business or individual needs. Family in particular plays an important role in Vietnamese society. You will notice that close ties between extended families and communities can have a major influence on individual behavior and oftentimes there are multiple generations living under one roof. For this reason, the company of the investor can pay more attention to their employees’ family members for example provide free
medical treatment, childcare leave, family trips, etc. This can increase the employees’ loyalty to the company. Besides, in order to increase efficiency of Vietnamese employees, the company should assign tasks to them by group rather than individual.


Religion in Vietnam is closely related to the history of Vietnam and most importantly the culture of Vietnam. The earliest established religions in Vietnam were Mahayana Buddhism, Confucianism and Daoism (called the ‘triple religion’). These religions have been co-existing in the country for centuries and mixed well with the Vietnamese tradition of ancestor worship. This special mix explains why the Vietnamese people find it hard to say exactly which religion the belong to. They usually classify themselves as non-religious, despite visiting religious temples several times every year. At the year 2006, the major religious affiliations amongst Vietnam born people were Buddhism (58.6%), Catholics (22.1%), other (4.6%), and no religion (11.03%). From the data, we were found that Buddhism, Confucianism and Daoism have greatly affected the Vietnamese’s behavior. The foreign investors should take note there are quite a large number of vegetarian in Vietnam, because of the Buddhism religion.

Food of Vietnamese

Food is a very important part of Vietnamese culture. The Vietnamese not only enjoy eating but believe eating good food can bring harmony and closeness to the family and relationships. The types of foods are chosen to bring luck and these vary from province to province. Buying daily for fresh food is essential for all Vietnamese cooking. In general, Vietnamese people are not as concerned about nutrition as Westerner. They are more concerned with the quality of the foods.

Concepts of Time

Like most Asians, the Vietnamese have a more extended concept of time than that of most Americans. The agrarian nature of their traditional society focuses on seasons rather than days or weeks. And this tradition is reinforced by the Confucian tradition of respect for earlier generations. Americans measure time by the clock, Vietnamese by the monsoon. Although this is changing somewhat, Vietnamese can still be expected to take a longer view of time and be suspicious of the need for urgency in making decisions or culminating a business deal. Patience remains the ultimate Confucian virtue in personal life as well as in business.

Personal Relationships

In Vietnam, propriety and courtesy play a major role in personal relationships. Vietnamese are generally more interpersonally formal than are Americans. This formality decreases the uncertainty surrounding interpersonal contacts in Vietnamese society and is carried over into the business realm for the same reasons. During initial meetings with Vietnamese officials, you can expect little real business to be accomplished. The Vietnamese will concentrate on getting to know you–your background, your expertise, your character. In their high-context communication culture, they will depend heavily on non-verbal clues to assess meaning. By becoming acquainted and establishing a personal relationship with you, they are merely trying to understand you better. Vietnamese society is comprised of an interconnected network of personal relationships, all of which carry obligations on both sides. These mutual obligations are the underpinnings of social order in Vietnam, so they are taken very seriously. Americans need to understand and be sensitive to the serious nature of what may seem to them to be casual business relations. Failure to do so could easily result in a loss of trust or credibility, with obvious implications for longer-term relationships.

4. Technology

In terms of technology, Viet Nam is a rapidly developing country. The year 2011 was the beginning of the strategic plan of economic and social development, period 2011-2020, in which infrastructural building is considered as one of main targets. With this plan, the country has been building many expressways and will let the local transport network be eventually upgraded to meet the requirements of rural industrialization and modernization, and connect itself with the national system. In addition, the above plan also includes a project which will work to narrow its scientific and technological gap with the world in some key fields by 2020. To launch this project, the Government will give top priority to enhancing the competence of scientists and related managers while encouraging the organization of training courses partnered with foreign competent partners.
According to the project, the Government will focus on scientific and technological renovation to sharpen the competitive edge of local products and assisting businesses to purchase patents in some prioritized areas: biotechnology, information technology, new materials technology – Nano technology , manufacturing technology and automation.

5. Legislation

The communist party-controlled government of Vietnam has ruled under four state constitutions. The first was promulgated in 1946, the second in 1959, the third in 1980, and the current in 1992 (amended in 2001). Significantly, each bore the mark of its time. On paper, all these constitutions seem to establish a solid democracy. In fact, the purpose of the 1946 constitution was essentially to provide the communist regime with freedom of speech, the press, and assembly. The second constitution was explicitly communist in character. Its preamble described the Democratic Republic of Vietnam as a “people’s democratic state led by the working class,” and the document provided for a nominal separation of powers among legislative, executive, and judicial branches of government. The 1980 Constitution concentrates power in a newly established Council of State much like the Presidium of the Supreme Soviet, endowing it nominally with both legislative and executive powers. Many functions of the legislature remain the same as under the 1959 document, but others have been transferred to the executive branch or assigned to both branches concurrently. The executive branch appears strengthened overall, having gained a second major executive body, the Council of State, and the importance of the National Assembly appears to have been reduced accordingly. The role of the Council of Ministers, while appearing on paper to have been subordinated to the new Council of State, in practice retained its former primacy.

Having inherited the previous constitutions with substantial and basic changes, on the one hand, the 1992 Constitution continues reaffirming the basic principles in the constitutional history of Vietnam. First, it reiterates the target of socialist construction in Vietnam and the popular nature of the State. Second, the 1992 Constitution continues affirming the Communist Party of Vietnam’s leadership over the State and the society. Third, it continues affirming the mechanism of State powers performed by the people through the National Assembly and the People’s Councils, the organization and operation of the State under the principle of concentrated powers; the concentration of State powers uniformly into the National Assembly with the division of responsibility among State bodies for the exercise of the legislative power, executive power and judicial power. On the other hand, the 1992 Constitution sees big changes: Vietnam decided to take economic renewal as the central task, First, building the multi-sector and multi-ownership market economy along the socialist orientation. open-door policy and international economic integration. In reality, however, final authority on all matters rested with the Political Bureau; especially, the guarantees provided by the constitutions for freedom of speech, the press, and assembly has been never intended to be carried out. The constitutions eventually show its limitations since Vietnam has joined the stream of globalization, especially in the field of human rights and land-ownership law.

In a report made public at the Conference on the Rule of law for human rights in the ASEAN region held by the Human Rights Resource Centre for ASEAN (HRRCA) in Jakarta, Indonesia on 30 April 2011, Mr. Vo Van Ai, President of Que Me: Action for Democracy in Vietnam and the Vietnam Committee for Human Rights called on Vietnam to urgently reform its legal system and bring domestic legislation into line with international human rights laws. Mr. Vo Van Ai declared: ―36 years after the end of the Vietnam War, the rule of law exists only in theory in Vietnam. The government has incorporated human rights into its 1992 Constitution. Yet it has also adopted a whole arsenal of Laws, Decrees, Ordinances and Decisions which restrict or even nullify the exercise of these rights, in total violation of the UN Covenant on Civil and Political Rights (ICCPR) to which Vietnam adhered in 1982‖. At the beginning of the New Year 2012 (Jan 1, 2012), there happened The Tien Lang land withdrawal case: in Tien Lang district (on the outskirts of Haiphong, a port city east of Hanoi) a fish farmer, Doan Van Vuong, and his family had resisted a large force moving in to enforce an eviction order. With an improvised mine and muskets bought on the black market, they’d wounded two soldiers and four policemen, including the local police chief. Prime Minister Nguyen Tan Dung himself had to meet the Haiphong City authorities to resolve the case; and finally came to the conclusion on Feb 2 that the Haiphong government was absolutely wrong in the case; and he ordered the Haiphong City authorities to review their wrong works as and repair the situation.

This case is just one among so many cases that show matters association with the land law. And this shocked case has raised the question of reforming the land law, which has been ambiguously claimed by the constitution as ―land is possessed by the whole people‖. Mr. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, comments that ―it’s possible to see the recent incident at Tien Lang as a climactic demonstration of the faults in our Land Law and how it is implemented at the local level. A good farmer, pure, simple and hardworking, who’s driven to defend his right to his land with home-made weapons – what misery! Everybody believes that there’s such a thing as justice and that the law ensures it. Certainly that’s what the farmers who built the fish ponds at Tien Lang believed. They went to the court expecting fair play, but the simple truths they understood proved elusive. The hopelessness of their situation drove them to take desperate measures. As mentioned above, the 11th Congress of Vietnam Communist Party held in 2011 issued four degrees; and one of them is beginning the study of the amendments and supplements of the 1992 Constitution and establishing the revised draft of the 1992 Constitution. This is urgent and necessary for the development of the country.

6. Environment

Viet Nam is blessed by the nature, with a great ecological and hydrological diversity. The country is made up of equatorial lowlands, high, temperate plateaus and cooler mountainous areas. It lies in the inter-tropical zone and local conditions vary from frosty winters in the far northern hills to the year-round subequatorial warmth of the Mekong Delta. At sea level, the mean annual temperature is about 27°C in the south, falling to about 21°C in the far north. Geographically, it stretches over 1600km (1000mi) along the eastern coast of the Indochinese Peninsula; and has two main cultivated areas, that are the Red River Delta (15,000 sq km/5400 sq mi) in the north and the Mekong Delta (60,000 sq km/23,400 sq mi) in the south. Vietnam also has diverse wildlife, with rare and precious fauna such as elephants, rhinoceros, tiger, leopard, black bear, snub-nosed monkey, crocodile and turtle. Forest area accounts for 2% of total forests in East Asia and Pacific. Fish catch is among the 10 highest countries in the world, with 1,451,800 tons per year.

However, as the report of the World Bank on the environment in Viet Nam, ―Rapid economic growth in Vietnam over the last ten years, and its associated industrialization, urbanization, as well as increased exploitation of natural resources, has created significant pressures for the environment.‖35 For example, the diverse wildlife is in precipitous decline because of the destruction of habitats, illegal hunting and pollution. In fact, Viet Nam Rhino was officially extinct in 2011.

One of the most obvious examples for illustrating the environmental pollution is the phenomenon of getting narrowed of the lakes in Ha Noi. According to the Hanoi Construction Department, there are 111 ponds and lakes in Hanoi which cover a total area of 1165 hectares. The total area of lakes has decreased sharply during the urbanization, while a lot of them have disappeared. It is estimated that 80% of the lakesides have got polluted, 71% of lakes have suffered from pollution, 26% of the lakes still do not have embankments, while 8% of lakes have partial embankments. Environmentalists have called on to take urgent actions to protect the remaining lakes, or they would also disappear one day. Vietnam is among the countries that can be seriously affected by climate change. And the fact shows that the increasing deterioration of environmental conditions is emerging as a barrier to growth and development in recent years. In fact, according to the General Statistics Office, domestic natural disasters occurred in 2011 has made 257 people dead and missing, 267 wounded; nearly 1.2 thousand houses collapsed and swept away; 391.8 thousand houses were submerged or damaged; more than 760 km of dykes, and the 680 km road motorized traffic bursts, landslides; 867 power poles broken or poured; nearly 54,000 hectares of rice and vegetables has been lost; more than 330,000 hectares of rice crops were flooded or damaged. Total value of
damage caused by natural disasters in 2011 was estimated at over 10 trillion VND. Thus, this is really a big challenge of the country; and it needs a national and urgent action to prevent an ecological and hydrological catastrophe.


With the aforementioned analysis of ―P.E.S.T.L.E‖, we see that in 2011, on the one hand, Viet Nam constantly attempted to keep its strategic plan of development, and also has obtained some important goals; on the other hand, the country had to face many difficulties and challenges which came both from outside and from inside.

In my opinion, there are some main issues that the government should pay great attention in the coming years: reforming the education system, fighting against corruption (especially, promoting fiscal transparency and the public availability of economic data and information), reforming the state-owned sectors, amending laws, narrowing the gap between the Kinh, the Hoa and the ethnic minority groups, and improving environmental conditions.

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