Vietnam is gearing-up to be an export powerhouse and the process
is just starting.
After spending most of the 20th century either under
colonial control or armed conflict, Vietnam enters the new century
as one of the most dynamic economies in Asia. With trade,
capital flows, and growth shifting from the western to eastern
hemisphere, the country's favorable demographics, geography, and
growth fundamentals create one of the most compelling investment
stories in recent memory.
Vietnam is the world's 13th most populous country
with 86 million people mostly between the ages of 25-35. The
country's post-war baby boom demographic is highly ambitious,
industrious, and captivated with modernisation. Isolated from
global markets until the mid-90's, normalisation of diplomatic
relations has sparked a rapid transition. Since Dragon
Capital established in 1994, the nation has visibly
evolved from bikes to motorbikes to cars. Vietnam is
centuries of material development compressed into decades.
Furthermore, the government is tempering "go for broke" growth
with equality resulting in political and social stability.
Starting with universal land tenure program that incentivised
the rural population, peasants became small farmers and
revolutionised agriculture productivity. From famines in the
80's Vietnam evolved by the 90's into one of the top
five global exporters of rice. The trend continues, as
produce advances from low-value rice to coffee and aquaculture.
Less competitive countries are left fumbling with trade
barriers and subsidies as the only means to maintain market share
against the Vietnamese small farmer.
With WTO these trade barriers will be much more difficult to
unilaterally erect, furthermore it opens Vietnam for the next stage
of development: manufacturing. So far the country remains at
the lowest rung of textile production, but with a coastal
population, continuing wage pressure in China, political stability,
and an eager workforce the nation looks primed for growth.
Intel, Canon, Foxconn, Olympus, Brother, and all the major
electronics manufacturing are investing on a grand scale.
Vietnam is gearing-up to be an export powerhouse and the
process is just starting.
