bolition, developing factor markets, and diminishing state enterprises. On the "but" side, there are dangerous bends ahead such as dynamic instability, skills and institutional gaps, complacency, and special interest groups (e.g., peasants, cadres, managers) demanding protections and interventions just like the old days. These potential dangers are real with a devastating potential for turning the clock back. In addition, like the other transitional economies, Vietnam has experienced negative side effects from the shift to the market in the areas of social services, the environment, and income distribution.Another area of concern is environmental degradation and the most serious problem is widespread deforestation, causing loss of topsoil, loss of natural water and air filtering capacity, increased flooding, and siltation of reservoirs. Similarly, the clearing of mangroves, coral reefs, and lagoons along the coast to make room for shrimp farms and rice paddies has reduced aquatic breeding grounds and natural barriers to storm damage and in some areas of the Mekong delta has exposed acidic soil. Other market-driven causes of environmental damage include chemical fertilizers and pesticides, unregulated disposal of hazardous waste by rapidly expanding numbers of small and medium enterprises, and the lack of waste water treatment plants in the growing urban areas.6. ConclusionAs a result of decades of war and international isolation, Vietnam stands among the poorest nations on earth in terms of standard of living with a per capita income in 1996 of $1,100 using international purchasing power parity . After more than ten years of economic liberalization, a policy officially endorsed at Vietnam's Sixth Party Congress in 1986, have brought considerable benefits to the country and its population. In general terms, Vietnam's reform path has been similar to China's. The transition began in agriculture in 1981, when cooperatives were allowed to co...
