The Economic Impact of doi moi: I

Measuring Vietnam's Gross Domestic Product (the total of all goods and services produced within Vietnam during a year) is difficult if we want to compare it to other countries

Two methods: (1) calculate in dong and convert to dollars using the current exchange rate; or (2) take into account the fact that the price of many goods domestically produced are considerably below world prices (haircuts = 25 cents; restaurant meal = $1.75)

Using exchange rates Vietnam's per capita income is about $275, up from $200 in 1986; using international prices (called purchasing power parity or PPP) Vietnam's per capita income is about $1,000, or less than 5% of that in the U.S.

The following chart helps to summarize the effects of doi moi:

Vietnam: 1986-1998

Average GDP growth rate, 1986-1998 7%

Changes between 1986 and 1995

	1986	1995
Population (millions)	60	74
Electricity production (mil.kwh)	5.7	14.5
Grain output (kg rice per capita	198	249
Hard Currency Exports ($mil.)*	509	5,220
Tourists ('000)	7	1,000
Inflation	600	13

*Vietnam has returned to its traditional role as a major rice exporter, now the third largest in the world