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Like many of its Southeast Asian neighbors, Vietnam faces the twin challenges of sustaining economic growth and protecting the environment. On the one hand, the impressive poverty reduction and growth performance attained over the past 25 years is now challenged by slower global and domestic growth, more intense international competition for foreign direct investment, and the need to drive domestic productivity improvements. On the other, Vietnam's vast natural resources--as represented by two major river deltas, a long coast line, and a multitude of rivers and canals--and the large portion...

Vietnam has attained a strong record of economic growth and poverty reduction since the adoption of market-based economic reforms and pro-poor policies starting in the mid-1980s. Much of this achievement was driven by an untapped, rapidly-growing labor force and the enablement of greater labor participation in higher-productivity sectors of the economy. Yet, as Vietnam has restructured its economic activity towards manufacturing, more mechanized primary sector production and, increasingly, services, and as the labor force is projected to expand at a markedly lower rate than before, finding...