Vietnam: From rising star to regional superpower

Published on 31 March 2021
Vietnam: From rising star to regional superpower

Source: Financial newspaper (The Netherlands)
Author: Ate Hoekstra
Date: January 25, 2021

The one-party state of Vietnam is seen as one of the most promising economies in Asia. It quickly got the hang of covid-19 and expects 6.3% growth again this year. The country is gaining momentum as a leader in the region and elect new leaders this week. Communist Vietnam elects a new president and secretary general this week. The country has been tough on covid-19 and has not had a lockdown since the summer of 2020.

  • Communistisch Vietnam kiest deze week onder meer een nieuwe president en secretaris-generaal.
  • Het land trad hard op tegen covid-19 en kent sinds de zomer van 2020 geen lockdown meer.
  • Voor 2021 wordt een economische groei van 6,3% voorspeld.
  • Het land zet zich steeds steviger neer als regionale macht.

Certainly in recent years it has really gone fast with the economy

The country is increasingly establishing itself as a regional power. New skyscrapers, shopping centers and luxury residential areas are popping up like mushrooms ground. More and more expensive cars, scooters and motorcycles are on the busier roads. And the group of Vietnamese who can afford to go on holiday regularly becomes everyone year bigger. Vietnam, with over 96 million inhabitants, is on the rise and is considered one of the Asia’s most promising economies. This week a select group of Vietnamese choose the new leaders of the country, which has been ruled by a communist party for decades. They are committed to further developing the economic momentum and the Southeast Asian country more firmly as a regional power. “Certainly in recent years it has really gone fast with the economy” JochemLisser, entrepreneur in Vietnam ‘The economy has really gone fast in recent years,’ says Jochem Lisser from Ho Chi Minh City. Lisser has lived in Vietnam for ten years. The Dutchman started a meal delivery business and now operates – after selling his business to a South Korean competitor – to its own gin brand Saigon Baigur. Lisser sees life in Vietnam change. The country is getting richer, the population more prosperous. ‘It disposable income is growing fast. People have more and more money for non-essential things. So for example, there will be more restaurants and more cinemas. And where you were on it ten years ago airport saw a lot of foreigners, you now see mainly Vietnamese there. ‘

Take firm action against corona

Even the coronavirus, and the accompanying economic crisis, will not affect Vietnam knees. The economy received a major blow, and in particular tourism fell hard blows, but unlike many neighboring countries, Vietnam registered last year positive numbers. While other countries plunged into recession, Vietnam recorded in 2020 economic growth of 2.9%. This success is largely due to the resolute action against covid-19. Hanoi closed the borders early on, traced the corridors of infected people in detail and strict quarantine measures prevented a rapid spread of the virus. ‘If there was an infection in your street, the entire neighborhood had to be quarantined,’ says de Vietnamese entrepreneur Mike Tran on the phone. ‘That was a tough measure, but as a result, the economy has been functioning here since last summer without a lockdown. ‘

The wind in your sails

Vietnam is keeping the wind in its sails due to the successful fight against the corona virus. The Asian Development Bank predicts this year an economic growth of 6.3%, bringing the country back on the same growth path is coming as before the pandemic. Foreign investors have according to analysts trust the Vietnamese administration and how it is dealing with a crisis. According to Adam McCarty, an economist at the Hanoi-based economic research firm Mekong Economics, Vietnam has sent a clear signal that it is doing business well has each other. Ten years ago, the world still laughed at Vietnam and people founded the country the same line as Cambodia and Laos, but those days are over. The way Vietnam covid-19 tackles, gives confidence. You bet investors will return en masse like the pandemic is over, ‘he says. “Ten years ago the world still laughed at Vietnam and the country was put on the same line as Cambodia and Laos, but those days are over ” AdamMcCarty, economist Mekong Economics We do not need to change major policy changes at the Party Congress, McCarty said other experts. Optimizing the business environment and facilitating further economic growth will be main threads. This means, among other things, an improvement of the legal systems favorable conditions for foreign companies wishing to invest. If the Communist Party wants to maintain its unbridled power, there is no other choice than to pursue the course already set, says Khac Giang, a political expert at the Vietnam Institute for Economic and Policy Research. The majority of the people are satisfied. Much of the Party’s legitimacy comes from its achievements over the years, and from how Vietnam has been opened up to the rest of the world and to foreign investors. ‘ Clothes stall in Bac Giang province, above Hanoi. In the once poverty-stricken province foreign investment almost doubles annually.

Major regional power

The strong growth also means that Vietnam is increasingly presenting itself as an important one regional power. The country regularly leads the summit for Southeast Asian countries, Asean. And two years ago, it facilitated a meeting between Donald Trump and the North Korean leader KimJong-un. “Policymakers are fully debating whether Vietnam can establish itself as a middle power,” he said Khac. The researcher still expects some modesty from the leaders who become this week chosen, but the days of restrained foreign policy are over. ‘Vietnam will become stronger want to establish and strengthen the region. I expect them to proactively look for partners in the region, such as South Korea.’

New leaders

Delegates of the Communist Party of Vietnam (CPV), which has been Vietnam as one since 1976 one-party state, are gathering in Hanoi this week for the most important political ones decisions in five years. They elect the 200-strong Central Committee, which then members of the Politburo designates and votes for the President, Prime Minister, Speaker of Parliament and the most important position of the country: Secretary General of the CPV. Nguyen Phu Trong (76) has been since 2011 Secretary General and reportedly on the hunt for an extra term. It makes him the most powerful Vietnamese politician in decades. The country is being further strengthened by companies that have been looking for one in recent years alternative to China as a production country, for example because of the trade tensions with the United States. With lower wages and a good infrastructure, Vietnam is the preferred base for companies that want to relocate part of their production, according to a study by the Japanese bank Nomura. Samsung and Apple, among others, found a new home for part of their production Vietnam. That immediately revealed one of Vietnam’s greatest challenges: availability of sufficient staff. ‘Vietnam is still in the phase of moving people from the farm to the factory can be relocated, but a serious capacity problem is emerging, ‘he said economist AdamMcCarty. Hanoi street scene. The country is getting richer and people have more and more money for non-essentials Affairs.

Shortage of highly trained personnel

Higher educated personnel in particular are difficult to find. Experts blame it on the higher education in Vietnam. This is still largely stuck in old, socialist structures and is not catching up one measure with the demands of the business. Investing more in education and admitting more international universities is necessary, McCarty says. ‘Vietnamese universities are still too protected from international ones competition. Allow more international universities to open a school here, and leave shake things up a lot for them. That would be better for everyone. ‘ Nevertheless, optimism predominates. This is also the case with Jochem Lisser. His new company has now employs six people full-time. His gin is for sale in hotels and cocktail bars, among others. “The market is not very big, but we see that the product is becoming more and more popular,” he says. ‘And the The great thing about Vietnam is that a lot grows here. You can get almost anything you need to make gin make it local.’

No opposition

Vietnam barely has any freedom of the press and tolerates no opposition. Human rights activists accuse the Vietnamese authorities of it in the run-up to the Party congress to crack down on dissidents. According to Reuters news agency, there have been since last Party Congress, five years ago, arrested 280 people who allegedly have the state undermined. 260 of them were found guilty. Earlier this month, three received prominent bloggers years of imprisonment

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