Vietnam Confronts Economic Quagmire

Although Vietnam's GDP is growing at 7% annually, double digit price increases, a downgrade on the country's sovereign debt, and an unstable currency make Vietnam's economy one of the most unstable in the region.  A big contributor to the instability is the existence of giant state-owned companies, especially Vinashin.  Vietnam's state-owned companies use 40% of the invested capital, but produce only 25% of the country's output.  Vinashin is now receiving a multi-billion dollar bailout from the government, and many investors believe that unless the Vietnamese government is willing to allow more state-owned companies to privatize or go under, the economy won't grow to its potential.

Vietnam Confronts Economic Quagmire - NYTimes.com