Vietnamese economy is among the fastest growing economies in the new millennium – average 6.5% within the last 10 years (source: CIA Factbook). Industries are gradually shifting away from agriculture productions and more into manufacturing and services:
(source: EU Trade Commission – click for large size)
Also, GDP per capita has been growing and is currently at its highest level of $1051 (as of 2008). Note that the spike around 1987 is due to a major economic policy renovation “Doi Moi” and the major jump started in 1992 is due the US lifting the trade embargo with Vietnam.
Vietnamese people are producing more ever year. They are also getting richer and have been consuming much more than ever. But have you ever wonder what is Vietnam selling and buying in the international market?
According to the EU Trade Commission, Vietnam’s exports to the EU comprises of 7.77 billion euros worth of goods. Among those, 24% are primary goods such as agricultural, fuels, & mining products. Of the others, 74% are manufactured goods including clothing (15.4%) and personal & household goods (34.5%).
Let’s take a look at Vietnam’s major trading partners:
(source: EU Trade Commission)
and also Vietnam’s account balance:
(source: EU Trade Commission)
As observed from the account balance graph, Vietnam’s is currently running a trade deficit (-7.8% of GDP in 2009). However, we can also see that Vietnam’s total volume of trade is growing consistently over the past 5 years, despite the major world wide recession in 2008. There is a minor drop in exports of 2009, however, due to the drop in the global demand for goods and services.
The future is hopeful for Vietnam and it is still among the fastest growing economies with projected GDP growth of 6% in 2010.
Hi Neal,
Great report. Have you seen my report on the impact of Viet Kieu investment on Vietnam? Would love your thoughts on it. Curious about your insights on Korea, especially the interface b/w Korea and Vietnam. My wife is Korean and I was stationed there from 2001-2002 with many shorter trips back afterwards. See alot of great examples in Korea and amongst the Korean-American community of collaboration and innovation that the Vietnamese would do well to emulate.
Best,
Tino
Tino,
I’d love to have a copy of your report on investment by Vietnamese Americans in Vietnam and share my views on it.
Thanks.
Great report Neil. Tino I would love to get a copy of your report.
Very nice to see VN expanding into the industry sector. There are a lot of opportunities there to pave the way for VN to create / own / innovate new technologies; a primary driver to accelerate.
Lucas
Hey Niel great post and thanks for promoting the world o understand more about Vietnamese economy and explaining to them why they should be eager to invest in Viet Nam and be more ambitious about the growth and potential of our country. There will definitely be a future for me in Viet Nam in term of investments I like the ONEVIETNAM idea and I hope you guys will be every successful in your goal!
what your inquiry in rice please give me tatial in our e-mail
Neil, yes a good report; and an issue drawing its share of attention here.
Not to be surprised, there has been a spike in the popular press (1) to “buy Vietnam” brands, and (2) casting aspersions on those who buy expensive overseas luxury items. It’s a mild, albeit mounting & obvious campaign to redirect Consumer Spending.
Still it’s development economics, and I’d expect to see trade deficits arising from Investment Spending to expand and improve capacity. Quite similar for Government spending as well vis-a-vis infrastructure, and the myriad of sectors, like health, being or needing to be modernized.
I’d be more curious to see the breakdown on both ends, as to what is being exported & imported, and to whom. Also, as an adjunct some basic numbers on energy, and consumer durables.
Have you seen research on ‘pent-up demand’ ?.
This is quite a nice report. You address some good features of Vietnam economy at the moment but fail to analyse the issues that we are facing such as the big trade deficits, especially the imbalances between Vietnam and China trades. It’s not only the matter of the size, it’s more about the elements of the trade. A large proportion of imports are intermediates goods which implies a significant dependence of our economy on other countries’ exports, remarkably China (account for approximately 80% of our imports).
I am also quite concerning about the government debts which is predicted to rise up to 60% of our GDP in 2011. Even though we are in the crisis and it is also time for us to catch up with the world technology which requires massive investment in infrastructure and heavy industries, the rate of growth is assuring an unsustainable level of government debt in the course of 5-year long.
Having traveled to, lived and worked in Vietnam for the past four years, I realized that Vietnam has much potentials, but will be just that for many years to come. The reality is not that rosy as the statistics Niel has reported. What many of us do not fully grasp is that in spite of all the fast growth Vietnam has experienced, Vietnamese are at least 50% poorer now than let say 10 years ago. Ten years ago, $100 could buy 1/10 of an ounce of gold (một chỉ vàng). Now $100 can buy less than 1/2 of that. (In Vietnam everything is based on gold). What has happened? Inflation is one. Neil cited that Vietnam has grown 6.5% for years. Yes, it has. However, inflation as a result of wasteful government investments and corruption has wiped out all of the so called “growth”.
Let us take 2010 as an example. The economy grew 6.5% and inflation was officially at 11%. So what is the net impact on Vietnamese pocket? The year before that, inflation was more than 20%. The net growth is indeed negative.
Show me a Viet Kiêu who claims that he made tons of money investing in Vietnam, and I will show you ten who have only his shirt left after doing business in Vietnam.
We want Vietnam to prosper. It cannot until the government root out much of the inefficiency (CORRUPTION). And that is just one of the prerequisites.