Three major developments over the past 20 years have led to the industry’s present vibrancy. One was the introduction in 1986 of the so-called Doi Moi economic reforms which notwithstanding the government’s communist leanings gave encouragement to the private sector and allowed market forces to determine the allocation of resources.

A second was the collapse of the Comecon (Council for Mutual Economic Cooperation) bloc in 1990-91 and that of the Soviet Union in 1991. These events caused initial hardship but prompted the country to forge links with the West and enter the international community. The third was the granting by the USA of normal trading relations (NTR) or most favoured nation (MFN) status in December 2001, which led to a dramatic reduction in import tariffs in the US market.

The future for the textile and garment industry in Vietnam looks promising. Vietnam joined the World Trade Organisation (WTO) at the beginning of 2007 and seems set to build upon its recent export success. Moreover, the Vietnamese government is highly supportive of the textile and garment sector, and there are strong incentives to attract foreign investment. The government has outlined ambitious plans for the industry’s development. If these plans are fulfilled, employment and exports in the sector will double by 2010.