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Vietnam's market reform process and the adoption of economic institutions that have also fueled rapid economic growth and industrialization in the dynamic ASEAN economies (DAEs) have reversed the decades of growing divergence between it and the DAEs. Nevertheless, a fundamental dichotomy or “transitional gap” between Vietnam and the DAEs remains. This is partly an outcome of Vietnam's resistance to adopt two other crucial components of the DAEs' experience: robust private sector development and export-oriented industrialization. Vietnam can accelerate convergence, however, if it pushes forward critical institutional reforms, particularly in the areas of private sector development, export promotion and domestic competitiveness.