VJC econs 2020 Promo QP and SAMS

2020 Promo QP 71 H2 ECONOMICS – PROMOTIONAL EXAM 2020 QP Section A: Case Study [30 marks] The economic miracle of Vietnam Figure 1: Real Gross Domestic Product Growth (%), Vietnam Source: The Global Economy, 2020 Extract 1: Vietnam – An economic miracle Today, Vietnam is one of the stars of the emerging economies. Since 2010, Vietnam’s gross domestic product (GDP) growth has been at least 5 per cent per year. With such rapid economic growth, the country grew from one of the poorest countries in the world to a comfortably middle - income one. Its GDP per capita has increased ten-fold from US$230 in 1985 to US$2,343 in 2017. Vietnam’s economic growth rivals China’s, and its exports are worth as much as the total value of its GDP. With multinational corporations having set up factories, anything from Nike spor tswear to Samsung smartphones are manufactured in Vietnam. So how did Vietnam’s growth miracle happen? One key reason, among others, is that Vietnam has invested heavily in human and physical capital, predominantly through public investments. Vietnam made large public investments in primary education and also invested heavily in infrastructure, ensuring cheap mass access to the internet. Armed with the necessary infrastructure and with business-friendly policies in place, Vietnam became a hub for foreign investment and manufacturing in Southeast Asia. Adapted from World Economic Forum, 11 Sep 2018 %

2020 Promo QP 72 Extract 2: Vietnam is getting old Vietnam has a median age of only 26. But it is greying fast. Over -60s make up 12 per cent of the population, a share that is forecast to jump to 21 per cent by 2040. This shift in Vietnam’s population structure brings headaches. The most recent survey of the old, in 2011, found that 90 per cent of them had hardly any savings. Government spending to support the aged in t he country will therefore be on the rise. The International Monetary Fund predicts that pension* costs, at the present rate, could raise government spending as a share of GDP by eight percentage points by 2050. Adapted from The Economist, 8 Nov 2018 * A pension is an amount of money paid regularly by the government to a person who does not work anymore because they are too old or have become ill. Extract 3: Vietnam is entering its ‘golden period’ Vietnam’s GDP growth is projected to decelerate in 2020, remaining nevertheless robust at around 6.8 and 6.9 per cent. Her economic growth momentum will continue in 2020 on the back of strong macroeconomic forecast, a growing middle class, rapid adoption of cutting -edge technologies, and a surging manufacturing industry. Consumption, a key driver of Vietnam's economic growth, will continue to play a major role in the years to come. With trade tensions between the United States (US) and China still ongoing, Vietnam will re