For many years Vietnam has made strenuous efforts to improve infrastructure actively using the ODA funds and to attract foreign companies. Specifically since 2007 when it joined the World Trade Organization (WTO), the economy has continue to perform well with its trade flows and inflow of foreign investment increasing and it rose from a low income country to a lower middle income country. However, the economic development mechanism that relies on foreign assistance funds (loans) has put a burden on the Vietnamese fiscal balance, making the fiscal consolidation an urgent task. As in China, Vietnam maintains a dictatorial political regime controlled by a single party of the Communist Party, and the market economy that works on competition principles has been underdeveloped. Especially, state owned enterprises (SOEs), not only place a heavy burden on finance, but also they might pose an impediment in maintaining the current high economic growth. Despite its long efforts on the reform of SOEs, Vietnam has not achieved visible results, and it is required that the country finally works on the reform seriously.