The role of the state in industrialization and modernization in Taiwan during the international economic integration period 1961-2003 - Lessons learned and the possibility of application to Vietnam

increased. In 2001, the rate of trained workers was 16.8% and by 2006 it had reached 27% [7, p. 67].

- On international economic integration policy

With the policy of expanding cooperation, equality and mutual benefit with all countries and international organizations, regardless of different political and social regimes on the basis of the principles of peaceful coexistence of our Party and State, the process of international economic integration has been gradually implemented.

In 1993, Vietnam opened relations with the IMF, WB, ADB. In December 1994, Vietnam officially submitted an application to join the WTO and began to carry out tasks such as policy transparency, preparation and implementation of bilateral and multilateral negotiations. On July 28, 1995, Vietnam became an official member of ASEAN and fully participated in ASEAN activities. From January 1, 1996, Vietnam began to implement its obligations and commitments in CEPT within the framework of AFTA. On July 17, 1995, the Framework Agreement on Vietnam - EU Cooperation was signed, creating a favorable legal basis for developing economic relations between the two sides. In March 1996, Vietnam joined ASEM as one of the founding member countries.

Since the 8th Congress (1996), with the policy of "building an open economy", "accelerating the process of regional and world economic integration", "actively and proactively penetrating and expanding international markets", our country's international economic integration process has continued to make important steps forward. On November 18, 1998, Vietnam became an official member of APEC, developing and implementing a national action program (IAP) to realize APEC's goals of trade and investment liberalization and facilitation by forming commitments in 15 areas of tax, non-tax, services, investment, intellectual property rights, etc. Vietnam also paid special attention to participating in the economic and technical cooperation program (ECOTECH). In particular, after more than 4 years of negotiations, the trade agreement

The Vietnam - United States Agreement was signed on July 12, 2000 and took effect on December 10, 2001. After the 10th Party Congress, our country's international economic integration process was carried out with a stronger, more urgent, more comprehensive and deeper spirit than in the previous period. With the great efforts of the Party, the State and all classes of people to diversify and multilateralize international economic relations; proactively implement bilateral and multilateral commitments and apply the rules of the game of international economic and trade institutions on the basis of ensuring the country's highest interests, Vietnam became the 150th official member of the WTO on January 1, 2007. This was a very important historical milestone affirming Vietnam's success in the process of international economic integration.

Immediately after joining the WTO, on February 5, 2007, at the 4th Conference, the 10th Central Executive Committee issued Resolution No. 08-NQ/TW on “Some major policies for the economy to develop rapidly and sustainably when Vietnam becomes a member of the World Trade Organization”, which set out policies and major orientations that need to be implemented immediately in 2007 and the 2007-2010 period. Following that, on February 27, 2007, the Government issued Resolution No. 16/2007/NQ-CP with the Government's Action Program to institutionalize the policy, ensuring the Party's Resolution is effectively implemented. The Government has proposed to solve 12 specific tasks related to aspects that the economy may be affected immediately when implementing WTO commitments. At the same time, the Government has assigned 26 specific actions to be implemented from the beginning of 2007 and 120 other specific actions to be implemented from 2007 and the following years to ministries, branches and localities. On that basis, competent state agencies have issued many documents and resolutions on guidelines and policies to resolve important issues in various fields to implement commitments to the WTO, while proposing specific solutions to overcome challenges and effectively take advantage of opportunities when Vietnam becomes an official member of the WTO.

To date, Vietnam has diplomatic relations with 172 countries and economic, trade and investment relations with nearly 200 countries and territories, is a member of 63 international organizations and has relations with about 500 non-governmental organizations. Expanding international economic relations and gradually integrating into the world economy has helped Vietnam enhance its national position in the international arena, creating conditions for expanding foreign economic activities, attracting external resources for industrialization and modernization, expanding markets, and increasing import and export turnover.

- On infrastructure development policy

Recognizing the importance of infrastructure as a prerequisite for industrialization and modernization, our Party and State have issued many specific policies and solutions to promote infrastructure development. State agencies have focused on planning the development of the transportation system, electricity infrastructure, postal and telecommunications system, irrigation system and urban infrastructure and mobilizing resources for the development of socio-economic infrastructure.

At the same time, the State has increased investment capital from the budget and has policies to attract diverse social capital sources for upgrading, building new and modernizing technical infrastructure systems such as transportation systems, postal and telecommunications networks, power plant systems and power supply systems, traffic and irrigation infrastructure systems in rural areas... In fact, the development of the infrastructure system has made an important contribution to socio-economic development, promoting industrialization and modernization.

3.1.2. Main results of industrialization and modernization

3.1.2.1. About achievements

Carrying out industrialization and modernization in the conditions of market economic development and international economic integration following the Party and State's innovation policy, our country's economy has achieved a number of great achievements.

First of all , the implementation of a multi-sector economic policy has created conditions for the liberation of productive forces and the mobilization of domestic and foreign resources for development investment. In addition to investment capital from the budget, capital from the private sector has also increased rapidly.

Table 3.1: Structure of total investment capital implemented in the period (1991 - 2006)

Unit: %

Year

Public sector	Private sector	FDI sector
1991	38.0	47.7	14.3
1995	42	27.6	30.4
2003	52.9	31.1	16.0
2005	47.1	38.0	14.9
2006	46.4	37.7	15.9

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Source: General Statistics Office: Statistical Yearbook 2001, 2006.

According to the General Statistics Office, from 2002 to present, the number of production and business establishments has reached 3,935,078 (an increase of 44.7%), of which the number of establishments in the enterprise type is 182,888 (an increase of 83.4%). After 5 years, production and business establishments in the non-state sector have increased sharply with corresponding figures of 140.3% and 166.3%. The number of enterprises with foreign investment capital has also increased rapidly. Therefore, the total social development investment capital compared to GDP has increased from 16% in 1990 to 29.5% in 2000; 36.32% in 2005; and

estimated to reach 40.6% of GDP in 2007.

Second , the arrangement and reorganization of the economic structure and effective solutions to increase investment capital have created conditions to promote the growth of economic sectors.

Table 3.2: Economic growth rate through stages

1986 - 1990	1991- 1995	1996- 2000	2001- 2005	2006	2007
GDP (%)	3.9	8.2	6.7	7.51	8.17	8.5
Industry and construction build (%)	6.0	12.7	10.4	10.25	10.37	11.0
Agriculture, forestry and aquatic products (%)	3.6	4.3	3.87	3.83	3.4	3.7
Service (%)	6.1	9.0	5.3	6.96	8.29	8.7

Source: Compiled from statistical yearbooks of each year, General Statistics Office.

Since 1991, the industry and construction sectors have grown at a rate of over 10% per year and have contributed the most to the overall growth rate of the economy. During the period 2001-2006, the processing industry has always had a high growth rate, averaging 11.81%. Some processing industries such as food and beverage; production of leather and imitation leather products; production of electrical equipment, means of transport, production of wood, rubber, metal products... have had a growth rate of over 20% in recent years. The growth rate of service sectors is quite fast, in which the growth rate of some high-end service sectors such as post - telecommunications, finance - banking, tourism... tends to increase. The growth rate of agriculture has decreased, but many targets set for food production have been exceeded. In general, over the past years, Vietnam's economy has grown at a relatively high rate compared to many countries in the region and the world. Thanks to that, the country has gradually emerged from the socio-economic crisis, creating momentum for the renovation process to continue in depth and contributing to accelerating industrialization and modernization.

Third , the economic structure has shifted towards rapidly increasing the proportion of industry and reducing the proportion of agriculture. In 1986, agriculture

Agriculture accounted for 34.7% of GDP, industry accounted for 26.8% and services accounted for 38.5% of GDP; in 2001, the agricultural sector accounted for only 23.24% of GDP, industry and construction accounted for 38.13% and services accounted for 38.63% of GDP; by 2006, the agricultural, forestry and fishery sector accounted for 20.36% of GDP, the industry and construction sector accounted for 41.56% of GDP, and the service sector accounted for 38.08% of GDP (Table 3.3).

Table 3.3: Sectoral structure in GDP (%)

1986	1990	2001	2005	2006
Agriculture - forestry - fishery	34.7	32.0	23.24	20.97	20.36
Industry and construction	26.8	25.2	38.13	41.02	41.56
Service	38.5	42.8	38.63	38.01	38.08

Source: Tran Van Tho, Vietnam Economy 1955 - 2000, p. 298; General Statistics Office, Statistical Yearbook of each year.

Fourth , the growth of economic sectors and the impacts of export promotion policies have contributed to the rapid increase in import and export turnover.

Table 3.4: Exports and GDP

1986- 1990	1991- 1995	1996- 2000	2001- 2005
Average exports (million USD)	1406	3431	10365	22166
Export ratio to GDP (%)	20.5	25.2	37.4	54.0
Exports per capita (USD)	18.1	43.6	129.9	274.0

Source: General Statistics Office: Overview of Vietnam's import and export in 20 years of renovation .

Besides promoting economic growth, the increase in exports and changes in the structure of export goods also create positive impacts.

positive for domestic production and has partly demonstrated the orientation of industrialization and modernization of the economy. From 1986 to 2005, Vietnam's export turnover increased by an average of 21.2% per year, reaching 32.4 billion USD in 2005, in 2006 exports increased by 22.1% and in 2007 increased by 20.5%.

The structure of Vietnam's exports has had positive changes. In particular, since 1996, when Vietnam accelerated the industrialization and modernization process, the proportion of deeply processed and refined products increased, while the proportion of raw or pre-processed goods gradually decreased.

Table 3.5: Export structure by processing level

1986-

1990

1991-

1995

1996-

2000

2001-

2005

Proportion of raw or semi-processed goods

70.1

74.6

54.8

45.3

Proportion of processed or refined goods

29.9

25.4

45.2

54.7

Source: Source: General Statistics Office: Overview of Vietnam's import and export in 20 years of renovation .

The proportion of processed industrial products accounted for 40.4% of Vietnam's total export turnover in the period 2001-2005. Up to now, electronic products and electronic components, garments, footwear, seafood, rice and wood products have had an export turnover of over 1 billion USD.

Vietnam's export market has also undergone significant changes in the direction of increasing diversity, expanding a number of potential markets. In the period 2001 - 2005, the Asian market accounted for 50.9%; the American market accounted for 18.9% while the European market accounted for only 20.7%.

Import activities also have positive changes, focusing mainly on serving the export development strategy and meeting essential production requirements. In the period 2001 - 2005, imports of production materials, machinery and equipment accounted for over 30%. In order to innovate equipment and innovate production scale,

Technical progress, production technology, import market has been expanded to countries with advanced technical level, of which from Japan about 28%; EU 13% and North America about 4%.

The results achieved in foreign trade activities have clearly affirmed that the openness of our country's economy is currently very high, with total foreign trade turnover being nearly 150% of GDP in 2006. Thanks to that, the economy has continuously expanded its growth space and the structure of the development space has also changed. The shift in foreign trade structure is one of the key factors reflecting the structural transformation of the economy.

3.1.2.2. Limitations

Besides the achievements in industrialization and modernization, Vietnam's economy also reveals many limitations. These are:

- Economic growth is still below potential, growth quality is slowly improving, competitiveness of enterprises and the economy is still low.

Economic growth in our country in recent times has mainly relied on increasing the number of input factors. The quality of growth is still low, reflected in the unreasonable allocation of resources, low investment profitability, high waste, and limited stability and sustainability of growth. Basically, economic growth in our country depends largely on the increase in investment by the state and state-owned enterprises. Although investment by the state economic sector always accounts for a large proportion of total social investment capital, the performance of this sector is not really commensurate with the potential and incentives from the state: it is not the force that contributes the most to GDP, nor is it the force that creates the most jobs nor provides the largest income for social workers. In 2005, investment capital of the state economic sector accounted for 52.2% of total social investment capital but only contributed