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VIETNAM: A COUNTRY, NOT A VIETNAM: A COUNTRY, NOT A WARWAR

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So Where is Vietnam?So Where is Vietnam?

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A Closer View A Closer View

The five points of the star represent farmers, workers,

intellectuals, youth and soldiers

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Yeah, come on all of you, big strong men, Uncle Sam needs your help again. He's got himself in a terrible jam

Way down yonder in Vietnam So put down your books and pick up a gun,

We're gonna have a whole lotta fun.

And it's one, two, three, What are we fighting for ?

Don't ask me, I don't give a damn, Next stop is Vietnam;

And it's five, six, seven, Open up the pearly gates,

Well there ain't no time to wonder why, Whoopee! we're all gonna die.

Feel-Like-I’m-Fixin’-To-Die Rag” by Country Joe McDonald (1968)

http://www.youtube.com/watch?v=LBdeCxJmcAo

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Total Area: 329,560 sq km (slightly larger than NM – 10 times Maryland)

Type of Government: Communist President of Vietnam Prime Minister Nguyen Tan

DUNG (since 27 June 2006)

Head of Communist Party: Nong Duc Manh (since 2001)

Capital City: Hanoi Population: Population: 86,116,560 (July 2008 est.) Population growth rate: .99% (2008 est.) Urban population: 30% Population under age 15: 32.6 Percent Infant mortality rate: 21.61 deaths/1,000 live births Life expectancy at birth: 71.33 (2008 est.) Total fertility rate: 1.86 (2008 est.)

Socialist Republic of Viet Socialist Republic of Viet NamNam

Independence, Freedom and Happiness

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Major Economic Indicators, Viet Nam, 2006-2009, %

Item 2006 2007 2008 2009 GDP Growth 8.229% 8.48% 6.152 % 5.32GDP (Current

Prices, US Dollars)

US$ 60.933 Billion

US$ 71.13 Billion US$ 89.829

BillionNA

GDP Per Capita (PPP), US

Dollars

US$ 2,357.02

US$ 2,602.48

US$ 2,783.75

Inflation (End of Year Change %)

6.99% 12.631 % 19.891 % 6 -7 %

Unemployment Rate

2.40% 2.00% 4.30%

Budget Balance (% of GDP) -3.8 -6.9 -5.1 -7.3

Current Account Balance (%

GDP)

-0.269 % -9.83 % -9.384 % -11.5%http://www.economywatch.com/economic-statistics/country/Vietnam/

Major Economics IndicatorsMajor Economics Indicators

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Vietnam consumer price index

0

10

20

30

40

Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08

perc

ent

General

Food & Foodstuff

Non-food

Mainly driven by higher food prices. But non-foodinflation has risen too, and the causes are domestic

Closer Look at the Rate of Closer Look at the Rate of InflationInflation

www.viet-studies.info/kinhte/WB_VN_June08.ppt

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Poverty Level Poverty Level

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Vietnamese Dong Exchange Vietnamese Dong Exchange RateRate

1$ = 17827 VND (November 10, 2009)

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VN Stock IndexVN Stock IndexVN Stock IndexesVN Stock Indexes

HCM Stock IndexHCM Stock Index

Hanoi Stock IndexHanoi Stock Index

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Industries : food processing, garments, shoes, machine-building, mining, cement, chemical fertilizer, glass, tires, oil, coal, steel, paper

Agriculture - Products :

paddy rice, corn, potatoes, rubber, soybeans, coffee, tea, bananas, sugar; poultry, pigs; fish Aquaculture, particularly shrimp and catfish farming,

Structure of the Structure of the EconomyEconomyEconomic Sectors

Service, 38.10%

Industry, 41.80%

Agriculture 20.10% Agriculture

Industry

Service

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Foreign Direct Investment (July Foreign Direct Investment (July 2008)2008)

1945Pre 1945 1954 1975 1976 1986

Struggle with

French Colonialism

Independence DemocraticRepublic of

Vietnam

Communist forces of Ho

Chi Minh force French

out.

Southernresistancecrumbles,

ending a 30-year war

South officially integrated

with the North under

communist rule.

CPV implemented free market

reforms known as Doi Moi

Acceptance to WTO

2007

Brief HistoryBrief History

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Brief HistoryBrief HistoryApril 30, 1975 – Country Reunited. Beginning of Socialist experiment supported by the USSR.

Vietnam “wins the war, but loses the peace.” Economic policy brings country to the brink of starvation

Beginning in 1986, Vietnam embarks on a process of economic reform and business liberalization (called doi moi)

Doi Moi involves transitioning from a centrally planned economy towards a “market-oriented socialist economy ”

Since late 1980s, considerable economic progress

High growth during 1994-1997Affected by Asian economics crisis (but mostly indirectly)

Signed US-Vietnam Bilateral Trade Agreement in 2000

During the 2000s, one of the fastest growing economies in the world

January 11, 2007 – becomes a member of WTO

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Vietnam has grown rapidly in the last 20 years but the economy is still at the level of a less developed country.

Indicators on infrastructure, education, human development index … range in 1/3 of the lowest group in the world.

The Doi Moi Reform Further The Doi Moi Reform Further Examined Examined

Vietnam has commitments on economic integration but the state system, education … still have more disparities in comparison with other countries in the world.

After more than twenty years of doi moi, Vietnam has established the main elements of a “market-economy with socialist orientation.”

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Exports in 2008 were over US$57 billion in value.US is Vietnam’ s largest export market.Textiles and garments account for over 18% of total exportsMarine products account for 12%, and footwear for 11% of total exports.

Vietnam is now the world's second largest exporter of rice and coffee.Crude oil now accounts for roughly 20% total export earnings. Vietnam also generates substantial foreign exchange earnings from foreign tourists and labor exports in which Vietnamese workers work overseas

Vietnam’s ExportsVietnam’s Exports

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StrengthsLow –cost laborHard-working labor forceHigh productivity in some sectorsRelatively educated labor forcePolitical Stability

WeaknessesCorruptionPace of ReformIncome DisparityEducationHealth: H1NI, Previously SARS, Bird Flu

Vietnam’s Main CompetitiveVietnam’s Main Competitive Strengths and WeaknessStrengths and Weakness

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World Bank Evaluation of Vietnam’sWorld Bank Evaluation of Vietnam’s

Strengths and WeaknessStrengths and Weakness

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Vietnam is at the beginning of the industrialization process, but environmental damage is already severe:

deforestation and erosion of soil – leads to flooding etc.

water pollution due to rapid increase of aquaculture

abuse of fertilizers, insecticides and herbicides, uncollected solid waste

industrial pollution in urban regions, increased dust, and alarming increases of toxic gases are widespread.

Air quality in the cities is poor.

Environmental ProblemsEnvironmental Problems

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Good Thing it is Not Rush Good Thing it is Not Rush Hour!Hour!

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Before 1975, Vietnam succeeded in establishing a three-tier (commune, local, and central) health care system

Health care was generally free in all public health care centers, but depending on one’s position in the political system, the quality of health care was drastically different.

Given the low GDP per capita, the performance of Vietnam’s health care system, measured by childhood mortality and life expectancy, has and is relatively good.

Between 2000 and 2005, the infant mortality rate declined from 36.7 per thousand to 17.8; the mortality rate for children under five fell from 42.0 to 27.5 per thousand.

Accordingly, life expectancy at birth increased from 67.8 to 71.3 years (World Bank 2007).

Health Care SystemHealth Care System

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Public hospitals, especially well-known central clinics, are desperately over-crowded; two patients (or even more for children) must share a hospital bed, and family members must take care of the patients and must fight for reasonable service.

This imbalance between demand and supply provides fertile soil for bribery and abuse of power by the hospital staff.

Illness in Vietnam is one of the major causes of poverty or misery and is one of the most serious concerns of the population.

Health Care SystemHealth Care System

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Doing Business In VietnamDoing Business In VietnamEase of... Doing Business

2010 rankDoing Business

2009 rankChangein rank

Doing Business 93 91 -2

Starting a Business 116 109 -7

Dealing with Construction Permits

69 67 -2

Employing Workers 103 100 -3

Registering Property 40 37 -3

Getting Credit 30 27 -3

Protecting Investors 172 171 -1

Paying Taxes 147 140 -7

Trading Across Borders 74 73 -1

Enforcing Contracts 32 39 +7

Closing a Business 127 126 -1

Based on Survey of 183 countries

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Doing Business in Vietnam: Overall Ease of Doing Business (Vietnam 2007 - 91)

1320

83

129140 135

92

0

20

40

60

80

100

120

140

160

Singapore Thailand Malaysia China Vietnam Indonesia Philippines Cambodia

Doing Business In VietnamDoing Business In Vietnam

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Rank

Corruption Perception Index – Corruption Perception Index – Transparency International Transparency International

http://www.transparency.org

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Most Corrupt Government Most Corrupt Government AgenciesAgencies

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Political and social stability Social Unrest RatingsCountry Political

Score Rank Global Rank

Singapore 93 1 1

Vietnam 81 19 2

Hong Kong 76 34 3

China 74 43 4

Malaysia 74 43 5

Indonesia 64 86 6

South Korea 63 89 7

Philippines 57 109 8

Thailand 55 113 9

Country Social Instability

Political Insurrection

Hong Kong 1.73 0.61

Singapore 2.75 0.5

South Korea 3.36 1

Vietnam 4.26 2.5

China 4.77 2.5

Thailand 5.21 5.34

Malaysia 5.31 3.84

Philippines 6.53 8.25

Indonesia 6.7 7.43

Sources: World Bank

Political and Economic StabilityPolitical and Economic Stability

30Source: Ministry of Finance, Doisongphapluat.com.vn, Deloitte and others

According to the Ministry of Finance, the number of SOEs equitized decreased from 724 in 2005 to 640 in 2006, 150 in 2007, and 73 in 2008.

Equitization of State - Owned Equitization of State - Owned Enterprises Enterprises

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Regardless of impressive achievements in economic growth and poverty reduction, Vietnam still has a long way to achiever its growth targets.

Question as to weather Vietnam can overcome the “middle-income trap” and reach the level of high-income economy.

The state in Vietnam is not immune to corruption, conflict of interests and abuse of power.

Transparency, openness, inclusive development have to be implemented.

If Vietnam continues its reform efforts, build-ups the right policies and appropriate institutions, Vietnam can overcome these obstacles and achieve the long desired targets.

ProspectsProspects

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Vietnam has made remarkable progress over the past two Vietnam has made remarkable progress over the past two decades in its transition to a market economy decades in its transition to a market economy

Vietnam is a nation at peace concerned with improving the Vietnam is a nation at peace concerned with improving the living standard of its people. living standard of its people.

Discussion of Vietnam should focus on the positive Discussion of Vietnam should focus on the positive developments of the last twenty years as it is an important developments of the last twenty years as it is an important study of economic development, transition economics and study of economic development, transition economics and institutional change.institutional change.

VIETNAM IS A COUNTRY, NOT A VIETNAM IS A COUNTRY, NOT A WARWAR