Rapid Economic Development and Social Transformation in Vietnam: The Impact of Foreign Direct Investment on Labor Structure

Abstract

Abstract

This article examines Vietnam’s rapid economic development following the implementation of the Đổi Mới reforms in 1986, which marked a significant transition from a centrally planned economy to a market-oriented system open to international trade and foreign investment. The study aims to (1) analyze the role of foreign direct investment (FDI) in Vietnam’s economic growth, (2) investigate the impact of FDI on labor structure, and (3) explore the social transformations resulting from rapid economic development in the context of globalization.

 The findings reveal that FDI has played a crucial role in driving Vietnam’s economic growth by increasing investment, creating employment opportunities, and integrating the country into global value chains. In addition, the relocation of manufacturing bases from China to Vietnam has further strengthened its position as a key manufacturing hub in Southeast Asia. However, rapid economic growth has also led to significant structural changes in the labor market, particularly the shift of workers from agriculture to industrial and urban sectors. This transformation has contributed to urbanization and changes in workers’ lifestyles. At the same time, challenges have emerged, including social inequality, labor issues, and heavy reliance on foreign investment. The article argues that Vietnam should adjust its development model by upgrading its industrial structure, enhancing workforce skills, and promoting sustainable economic growth in order to improve long-term competitiveness.