As Hanoi was adorned with flags for the 14th National Party Congress, Dr. McCarty shared insights offering a warm, evocative portrait of a Vietnam steadily taking flight.
“Serious player” on global stage
In Dr. McCarty’s view, during the first two decades of Doi Moi, Vietnam consistently integrated into regional and global frameworks like ASEAN and the WTO during the first two decades of Doi Moi. Now a full participant, the country has served as a non-permanent member of the U.N. Security Council and recently hosted the signing of the U.N. Convention against Cybercrime (Hanoi Convention) in October 2025.
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Dr. Adam McCarty, Australian economist, founder of Mekong Economics |
These milestones confirm Vietnam as a “serious player” globally. Far from being a passive member, the nation actively shapes outcomes through debate, initiatives, and research. Within ASEAN, Vietnam’s role is increasingly prominent despite the bloc's diverse economic landscape. Dr. McCarty noted that while ASEAN must still reduce trade barriers and facilitate movement, Vietnam possesses the standing to lead these connectivity efforts.
Historic turning point
During the 13th National Party Congress tenure, Vietnam achieved striking economic growth. GDP rose 8.02% in 2025, among Southeast Asia’s fastest. The economy expanded from $346 billion in 2020 to $514 billion in 2025, ranking 32nd globally. Per capita GDP surpassed $5,000, elevating Vietnam to upper-middle-income status, figures Dr. McCarty called "genuinely impressive."
Major policies also sparked rapid change. In 2025, Vietnam launched a historic, large-scale reorganization to streamline the state apparatus and implemented a nationwide two-tier local government model. Swift legislative updates and new decrees pressured the civil service to act decisively and respond effectively to citizens and businesses.
Dr. McCarty particularly noted Vietnam’s determination to establish international financial centers in Ho Chi Minh City and Da Nang. Operating under global standards of transparency and trust, these centers reflect Vietnam’s confidence in competing on the world stage.
Creating competitive environment
Dr. McCarty emphasized that fostering a competitive environment is crucial, citing the 1970s "format war" where JVC’s VHS defeated Sony’s Betamax. This case proves that market outcomes are inherently unpredictable.
Regarding Vietnam, he questioned whether high-stakes strategic decisions should be made by leadership or the private sector. Top-down errors can be catastrophic; conversely, market competition contains the impact of individual failures while allowing success to emerge organically.
While 40% of small businesses fail within two years and even giants make costly missteps, competition ensures a level playing field. It identifies winners through performance, enabling firms like Samsung to become global champions while others, such as Nokia, lose their dominance.
Policy momentum
Dr. McCarty noted Vietnam’s effective macroeconomic stability, characterized by controlled budget deficits and low inflation. While ambitious growth targets remain feasible, he views an 8% rate as an excellent achievement. However, he warned of a “growth trap,” where pressure to meet targets might distort outcomes or misallocate resources.
Despite the long journey ahead, Vietnam’s rapidly improving policies foster a favorable business environment, making its economic trajectory particularly promising.
Translated by Tran Hoai