“Despite challenges such as limitations on foreign ownership, Vietnam’s success is undeniable”
AFTER the Vietnam War, when tourism became significant in Vietnam’s economy and the country opened to the world, my wife and I traveled many times to Ho Chi Minh City, the former Saigon.
On my part, it was more out of curiosity.
On the part of my wife, she loved going to the antique shops buying a little of this and a little of that.
It was a time when the antique dealers had boatloads of European antiques.
I, on the other hand, loved touring especially seeing the well-known Cu Chi tunnels and seeing where the Vietcong used to harass the American troops with guerilla tactics, suddenly disappearing into tunnels fit for the smaller Vietcong, but not fit for the large Americans.
Santa Banana, no wonder, the Americans lost the Vietnam War.
When then President Fidel V. Ramos made a state visit to Vietnam, Vietnam was considered at that time a very poor country.
In Ho Chi Minh, my wife used to stay at the famous Continental Hotel, built during the French colonial days, wherethe huge bathtubs had to be climbed into. But, it was an experience.
Later on, from those who had gone to Vietnam, I was surprised to learn how Vietnam has leap-frogged.
Santa Banana, from being a small cubicle which was called Saigon’s international airport, now Vietnam’s gateway can put to shame the NAIA (Ninoy Aquino International Airport).
But, there were already so many interesting things to see back then. . I still recall the Floating Hotel in the former Saigon.
Now Ho Chi Minh is a bustling modern city with so many skyscrapers and commercial establishments.
I heard Vietnam is one of the most successful economies in Southeast Asia.
What made Vietnam a success story is something our policy makers must look into.
It all began when Vietnam opened its doors to foreign investors.
Thus, with a little research and with reports of businessmen who have been to Vietnam, the country initiated what they call “Doi Moi,” a series of reforms that opened its economy, embraced trade, and attracted foreign investments.
Vietnam quickly transitioned from being one of the world’s poorest nations to achieving middle-economic status, increasing 18.5 times, or 1,753 percent, or 11 percent per year in GDP (Gross Domestic Product) per person over 28 years after 1994.
This remarkable transformation was driven by three waves of foreign investments: first, from companies like Honda and global sportswear brands, followed by tech firms in the early 2000s, and later by foreign retail businesses, such as Aeon.
As a result, Vietnam started becoming a significant export powerhouse, producing a substantial portion of local products, including more than half of Nike’s shoes and 60 percent of Samsung phones.
Samsung has played a significant role, employing over 310,000 people and accounting for an impressive 18 percent of all Vietnamese exports.
Vietnam’s competitiveness arises from lower labor costs and the quality of its workforce.
Vietnam’s attractiveness is further accentuated by its intent to shift from labor intensive industries towards more profitable sectors like semiconductors, reflecting the growing trend to diversify supply chains away from China.
Despite challenges such as limitations on foreign ownership, the country’s success is undeniable.
The nation’s pursuit of high-income status by 2045 requires sustained growth rates of at least 7 percent, a goal that becomes more challenging as it moves beyond low-hanging fruit and seeks to build a richer society.
However, Vietnam’s investment in education stands out, with students having the second-longest learning-adjusted years of schooling in Southeast Asia, second only to Singapore.
The country’s human capital index is also the highest among lower-middle-income economies.
In summary, Vietnam’s economic success story, reminiscent of China’s early 2000s boom, showcases the nation’s potential and opportunities for investors, and highlights lessons for business decision makers and economic policymakers.
From my viewpoint, above everything, the advantage of Vietnam over the Philippines is that there are no elections and no politics that hinder growth, unlike the Philippines.
I am reminded of what the late founder of Singapore Lee Kuan Yew once said after visiting our country, “The problem of the Philippines is that it has too much politics.”