1)Identify the nature and causes of two major economic problems facing Vietnam 2)Explain how Vietnam is attempting to solve on of these economic problems.

1) Identify the nature and causes of two major economic problems facing Vietnam. There are many economic problems that face Vietnam. The two major problems are Foreign Direct Investment (FDI) Shortfall and Agricultural Impasse. Foreign Direct Investment (FDI) Shortfall According to World Bank figures, foreign investment inflows fell to an average of six hundred million dollars per year in 1998 - 2000 compared to two billion dollars per year between 1995 - 1997. Vietnam is still a high transaction-cost economy. …

…preferences to lend to party-related companies for the benefit of the rich and elite. The party controls government, judiciary and the media argues that it should retain that grip for the sake of stability. Vietnam should adopt policies and incentives that are more attractive than those in regional countries. Vietnam's investment policies are less attractive than regional counterparts, as they are drafted based on investors' opinions and proposal without taking into consideration the regional level.