'When aircraft-leasing companies come in to lease them aircraft and look at the books, they are impressed,' said Jim Eckes, the managing director of Hong Kong-based airline management consultancy Indoswiss Aviation.

Analysts believe Vietnam Airlines was able to pull this off by cutting costs (especially salaries), dumping inefficient Soviet airliners for the latest Airbus and Boeing models, and hiring an open-minded management team, most of whose members soaked up skills and experience on overseas postings or training.

Vietnam Airlines, in its present form, grew from the state airline monopoly in the early 1990s. From its humble origins, it now flies to 22 destinations, including Europe, Australia and east Asia.

Foreign-partner airlines, including Air France and Cathay Pacific Airways, have been sharing know-how in such areas as marketing, revenue and yield management and code-sharing.

Centre for Asia-Pacific Aviation managing director Peter Harbison said: 'I've no doubt it will become one of the leading carriers in the Asia-Pacific in five years, certainly in Southeast Asia.'

By 2010, Vietnam Airlines plans to fly worldwide, operating 70 aircraft, against 35 now.

For Mr Eckes, the airline demonstrates why he thinks the country has a golden future.

'What we're seeing here is an example of the Vietnamese inherent skill as businessmen. They just absorb business skills rapidly,' he said.

Managers and investors often cite Vietnamese commitment to education as a key driver. For instance, according to some observers, Vietnam's software programmers may soon give their Indian counterparts a run for their chips.

PXP Vietnam Asset Management director Kevin Snowball said: 'A large part of it is education. People want to improve themselves. People want to produce quality.'

But it was not always so. In the early 1990s, foreign investors brimming with optimism swarmed all over Vietnam. A few years later, they left, fed up with sour deals, bad regulations and suffocating bureaucracy.

Things appear better now, with the economy booming and a horde of new investors, especially from Japan, South Korea and Taiwan.

'The quality of production in Vietnam is higher than almost everywhere else,' Mr Snowball said. 'There is a lot of relocation of footwear [manufacturing] from Indonesia and China.'

Trade agreements have opened doors for deals - and experience - for Vietnam's burgeoning private sector. Thanks to a trade deal, Vietnam was able to export to the US textiles worth US$950 million in 2002 - a staggering increase from US$50 million in 2001.

'The US did not expect the Vietnamese to push the door open as far as they did. Consequently [last year], the US introduced quotas. Those quotas were full by June [last year],' said Mr Snowball.

Unfortunately, elimination of World Trade Organisation textile quotas over the next few years threatens to spoil the party, but perhaps not for long.

'Vietnam will probably compete by aiming for the higher end,' Mr Snowball said.

Rapid evolution in the private sector suggests Mr Snowball's hunch may not be far off the mark. Firms are wising up, realising they cannot just rely on exports and cheap prices.

'Most Vietnamese companies are changing now - they are learning to be more effective in marketing,' said Hoang Kim-chuong, the international sales and marketing director of Trung Nguyen Coffee's - a cafe franchise chain that has been expanding rapidly since 1996.

'Vietnam is becoming more open, interacting more with other countries and markets. We are becoming more aware. We have to be better, faster, cheaper,' he added.

Reforming state enterprises is never easy, much less switching from one economic system to another while trying to raise living standards and development.

But Vietnam Airlines' advance and the private sector's growing sophistication indicate Vietnam is a serious competitor for China and its Southeast Asian neighbours in agriculture, manufacturing and tourism.