Question 70 from UPSC CSE 2022 - Internatio nal Relations

Question

Consider the following statements:
1. Vietnam has been one of the fastest growing economies in the world in 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?

IASCODEX · Accepted Answer

Correct Option: C. 1, 3, and 4

Strategy: Identify statements consistent with Vietnam's economic and political landscape:
*   Exclude Statement 2, acknowledging Vietnam's one-party Communist system.
*   Discard Statement 5, as Vietnam's e-services are still developing, not dominant.
*   Affirm Statements 1, 3, and 4, which accurately reflect Vietnam's rapid, export-driven economic growth and low labor costs.

Key Info: ## Vietnam: Economic and Political Overview

Vietnam is a Southeast Asian country governed by the Communist Party, making it a one-party socialist republic. Its economic transformation began with the Doi Moi (Renovation) policy in 1986, shifting from central planning to a market-oriented economy.

Key aspects of this transformation include:
*   Pro-business reforms.
*   Joining the World Trade Organization in 2007.
*   Participation in regional agreements such as ASEAN, CPTPP, and RCEP.

The country's rapid economic rise has been fueled by:
*   Integration into global supply chains.
*   Export-led growth.
*   Abundant, low-cost labor, attracting manufacturing relocations from higher-wage East Asian economies.

Economic performance highlights include:
*   An annual average GDP growth exceeding 6% from 2010-2019.
*   Resilience during COVID-19, posting positive growth in 2020.
*   A stable exchange rate policy supporting trade and foreign investment.
*   A dramatic reduction in the poverty rate.
*   Becoming a major exporter of electronics, textiles, and footwear.

Regarding the e-services sector:
*   It remains nascent with limited regional dominance.
*   Economies like Singapore, Indonesia, and the Philippines currently surpass Vietnam in e-commerce penetration and financial technologies (fintech).
*   While infrastructure and digital readiness are improving (as highlighted by the World Bank and Asian Development Bank), Vietnam's e-services productivity is not ranked highest in the Indo-Pacific.

Overall, Vietnam is recognized for its rapid, export-driven growth. However, its political system remains firmly one-party, and its digital sector is still developing relative to regional leaders.

IASCODEX · Answer

Option A: 2 and 4

IASCODEX · Answer

Option B: 3 and 5

IASCODEX · Answer

Option D: 1 and 2