UPSC Prelims 2022 Question:

Consider the following statements

1. Vietnam has been one of the fastest growing economies in the world in the recent years.
2. Vietnam is led by a multi-party-political system.
3. Vietnam’s economic growth is linked to its integration with global supply chains and focus on exports.
4. For a long time, Vietnam’s low labour costs and stable exchange rates have attracted global manufacturers.
5. Vietnam has the most productive e-service sector in the Indo-Pacific region.
   
   

Which of the statements given above are correct?

Explanation:

• Vietnam is one of Southeast Asia’s fastest growing economies and is expected to be a global top 20 economy by 2050. Between 2002 and 2021, Vietnam’s GDP per capita increased 3.6 times, reaching almost US$3,700. Vietnam was one of only a few countries to post GDP growth in 2020 when the pandemic hit. So, statement 1 is correct.
  
  
• There is no multi-party system in Vietnam. The Socialist Republic of Vietnam is an authoritarian regime headed by the Communist Party of Vietnam (CPV). While the ideological orthodoxy of Communism has become less important, the country is still influenced strongly by the CPV. The separation of powers between executive, legislative and judiciary is weak. The overlap between the CPV and the government is far-reaching. So, statement 2 is not correct.
  
  
• Vietnam’s remarkable growth has been propelled by its openness to trade and investment. Its comparative advantage in low-cost labour has enabled Vietnam to emerge as a key manufacturing node in global supply chains. The exports from Vietnam have also shown huge growth. Vietnam’s total exports expanded 25.2 % year-over-year in Apr 2022. Vietnam stable exchange kept around a 3 percent trading band by the central bank has been a key ingredient of the country’s foreign direct investment driven export sector. So, statements 3 and 4 are correct. 
  
  
• Vietnam does not have the most productive e-service sector in the Indo-Pacific region. Countries like USA, South Korea and Japan have highly advanced and productive e-service sectors. So, statement 5 is not correct. 
  
  

Therefore, option (3) is the correct answer.

Subject: Economics|Foreign Trade and Investment