Vietnam: The Land Of Opportunity Awaiting To Be Tapped By Savvy Investors And Business!

Vietnam is one of the fastest growing in the Southeast Asian region with the GDP growth coming in at 8.4% in 2006, according to the International Monetary Fund. The country has recently become the 150th member of the World Trade Organization. The investment bank Citigroup has also hailed it as "the new powerhouse of southeast Asia".
The investment opportunities in this country are tremendous. With a dynamic, hardworking population of over 80 million, Vietnam is an attractive location for investors as manufacturing workers here are the cheapest in the world.

The country needs almost everything. A fundamental renovation of the infrastructure. The rapid development of the power industry. The modernization of all its airports. The development of its enormous tourist potential. Bridges, ports, railways, irrigation systems, waste disposal and effluent control, city transport, telecommunications, services of all descriptions. The list is endless.

The stock-market was created in July 2000 with a daily trading volume of about $50m. This is relatively small in scale in comparison with other countries in the region. But 70 large state-owned companies are set to list by 2010 and analyst say the total value of listed shares could rocket to around $20bn to $45bn by the end of 2007.

The command economic system has become history. The Money Week said deregulation, political and religious stability and a growing middleclass all add up to a very attractive investment story. American giants like Intel and Nike has been committing more and more resources to the country, aiming to expand their influences in the southeast Asian region.

As Merrill Lynch regional strategist pointed out Vietnam is a "10-year buy", the new Asian "Tiger" is now ready to take off.

ECONOMY
Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Since 2001, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive export-driven industries.
 Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US increased 900% from 2001 to 2007.
 Vietnam joined the WTO in January 2007 following over a decade long negotiation process. WTO membership has provided Vietnam an anchor to the global market and reinforced the domestic economic reform process. Among other benefits, accession allows Vietnam to take advantage of the phase-out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005.

Agriculture's share of economic output has continued to shrink from about 25% in 2000 to less than 20% in 2008. Deep poverty has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one-and-a-half million people every year.

The global financial crisis, however, will constrain Vietnam's ability to create jobs and further reduce poverty. As global growth sharply drops in 2009, Vietnam's export-oriented economy - exports were 68% of GDP in 2007 - will suffer from lower exports, higher unemployment and corporate bankruptcies, and decreased foreign investment. Real GDP growth for 2009 could fall between 4% and 5%. Inflation, which reached nearly 25% in 2008, will likely moderate to single digits in 2009.

THE VIETNAMESE?

The conquest of Vietnam by France began in 1858 and was completed by 1884. It became part of French Indochina in 1887. Vietnam declared independence after World War II, but France continued to rule until its 1954 defeat by Communist forces under Ho Chi MINH.
Under the Geneva Accords of 1954, Vietnam was divided into the Communist North and anti-Communist South. US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973.
 Two years later, North Vietnamese forces overran the South reuniting the country under Communist rule. Despite the return of peace, for over a decade the country experienced little economic growth because of conservative leadership policies.

 However, since the enactment of Vietnam's "doi moi" (renovation) policy in 1986, Vietnamese authorities have committed to increased economic liberalization and enacted structural reforms needed to modernize the economy and to produce more competitive, export-driven industries.

The country continues to experience protests from various groups - such as the Protestant Montagnard ethnic minority population of the Central Highlands and the Hoa Hao Buddhists in southern Vietnam over religious persecution. Montagnard grievances also include the loss of land to Vietnamese settlers.

-OKOYE O. PIUS
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