Viet Nam Overtook the Philippines in 2021: A Microcosm of Asian Development

Viet Nam surpassed the Philippines in terms of per capita gross domestic product (GDP, in constant 2015 USD) in 2021. This paper analyzes the reasons Viet Nam has overtaken the Philippines despite both countries experiencing challenging transitions in 1986, with Viet Nam significantly lagging behind the Philippines at that time. Qualitative methods are applied through a hermeneutic analysis to understand post-war economic development in Asia. Along with selected quantitative indicators, policy lessons from the history of Asian development are used to analyze and explain how Viet Nam overtook the Philippines. The study shows that many factors can explain the economic surge of Viet Nam between 1986 and 2021: an aggressive outward-oriented strategy, favorable topography that contributed to higher productivity in the agriculture sector, better energy security, and earlier onset of demographic transition. Although the Philippines made important strides in these areas, some experts argue that plans and programs are more effectively implemented in Viet Nam. One reason is the relative lack of accountability in the Philippines, which can be traced to a soft state, weak institutions, a dominant oligarchy, and persistent political dynasties. Meanwhile, revolutionary disruptions after the Second World War may have led to the establishment of a relatively disciplined and inclusive political organization in Viet Nam, the Communist Party. Viet Nam and the Philippines have indeed been an integral part of the remarkable transformation of Asia over the past six decades. Their divergent paths after 1986 may be attributed to factors cited earlier. A cursory survey of the future, however, indicates that institutions in both countries may have to be reformed or transformed to at least achieve the same level of success going forward.