The Dong is the official currency of Vietnam. It is divided into 10 hao, which are subsequently divided into 10 xu. The hao and xu have become so insignificant recently that they are no longer issued. Bill denominations exist in 200; 1000; 2,000; 5,000; 10,000; 20,000; 50,000, 100,000, and a newly issued 500,000 worth approx. 30 American dollars. Dong, which literally means "copper" in Vietnamese, was originally named for the currencies used when Vietnam was still part of French Indochina. After the fall of Saigon, in 1975, Vietnam changed the name of its currency to the "liberation dong". Each new dong was worth 500 of the southern dong. The unification of the country led to the unification of the currency as well. In the mid 1980's, the dong was revalued, with the new dong equal to 10 old dongs. As of June 2005, Vietnam was the second least valued currency after Romania.
| Moody's Rating |
| B1 |
| S&P Rating |
| BB- |
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Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets. |
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Political Structure
Vietnam is a self-proclaimed communist state, which consists of three branches: executive, legislative, and judicial. Leading the executive branch, the chief of state, is the president, who is elected by the National Assembly to a five-year term. The president appoints the prime minister from among the members of the National Assembly. The prime minister appoints the deputy prime minster. The president also appoints his own cabinet, although the national assembly must approve them. The legislative branch consists of a unicameral body, the National Assembly, which has 498 seats. The judicial branch is made up of the Supreme People's Court, whose judges are appointed by the National Assembly.
Prominent Figures
The current president of Vietnam is Tran Duc Luong, who has been in power since 1997 and will be up for reelection in 1997. The Prime Minister, Phan Van Khai, has been in power since 1997. The central bank of Vietnam is the State Bank of Vietnam, headed by Governor Le Duc Thuy.
Unique Characteristics
Vietnam is one of the few countries remaining that bases its government, and subsequently its economy, on a traditional Leninist Communist society. The Communist Party has supreme influence over all aspects of the government. The government struggles to make local governments more accountable; however, the national system has not undergone any radical changes in recent years. On the other hand, the government has tried to grow with the changing times, and privatize many state-owned sectors. Vietnam has succeeded in reducing wide spread poverty, as well maintaining high rates of economic growth. The government plans to accede into the World Trade Organization in 2006, to hopefully further liberalize their trade regime.
Key Economic Factors
In 2004, both the value of manufacturing exports, and merchandise imports increased thereby creating a merchandise trade deficit to 5.5%.
Vietnam relies heavily on agriculture, around 65% of the labor force works in agriculture, forestry, and fishing, however, the agricultural sector only accounts for approx. 23% of the GDP. Vietnam is the second largest exporter of pepper, coffee, rubber, tea, and rice. Industrial GDP has increased by more than 10% in the last decade. Industrial contribution towards the GDP has accounted for almost 40%. Mining gas and oil, has also generated a large profit for Vietnam. Oil production has seemed to reach a climax, while gas production is expected to continue to grow.
Although state owned sectors produced 40% of industrial output, it was much lower in comparison with foreign invested and private owned firms. Although private owned sectors in Vietnam only account for small portions of the GDP, they employ almost four times as many employees as the state owned institutions.
Increased government saving has contributed towards the share of investment of the GDP to grow from 11% to 32% in the last 15 years.
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