Two years ago I read an article in the Wall Street Journal about Vietnam considering allowing transgenic crops. All I could think of was what a great opportunity. I could work with the government and provide a crop that was safe and provided value. This peaked my interest into the opportunity of Vietnam. I started reading about Vietnam’s Economy. The more I read the more I became certain that Vietnam was the place I needed to be.
After the War
When I tell people about the opportunity of Vietnam they think I am crazy. “Its’ a poor country” they say. Even some Vietnamese are skeptical of my outlook. My counter argument is to look at Japan after WWII and people would have said something similar about Japan. “It’s a ruined country”. Or about Korea after the Korean war. I am not going to say that war is good. It is not. However, there are advantages after a conflict (Post-World War II Economic Expansion). A war allows countries to rebuild and take a new direction in leadership and governing. WWI transitioned Germany from a monarchy to a democracy. Russia also transitioned its government after it’s exit from WWII.
After conflicts, Germany, Japan, and South Korea were all blesses with an economics miracle. In Germany, Wirtschaftswunder transformed West Germany and Austria. The Japanese economic miracle greatly changed the country and the world. South Korea had the Miracle on the Han River and is part of the Four Asian Tigers. After the War in Vietnam, the country was unified allowing it to move forward. The economy since the war has been steadily growing and is about to break out. There was a human cost to this which can not be justified with economics. After military conflicts, a country can have later economic growth.
Economic Reform
In 1986 Vietnam created Đổi mới which translates to renovation. The goal was to transform the economy into a “socialist-oriented market economy”. Private enterprises could produce commodities. Entrepreneurs quickly started selling things on the street. After these reforms, Bill Clinton lifted the US trade embargo on Vietnam. With private companies starting to enter Vietnam and western governments making it easier to do business with Vietnam, trade grew.
Vietnam is on the list
I was surprised to find that people try to predict which countries will become the largest economies in the future. I was even more surprised that Vietnam is on two major lists: CIVETS, and Next Eleven. The only countries that are on both lists are: Egypt, Indonesia, Turkey, and Vietnam. All four of these I believe provide excellent opportunities of the future. The except maybe Egypt with the recent change in government. How did they create these lists?
These lists were modeled after BRICS. Brazil, Russia, India, China, and South Africa. The countries were the past rockstars of economic growth. Presently they have slowed down in growth, but present a good model for the next countries to grow. For growth it seemed then you needed a large population, a large amount of resources, or both. The new lists were built around; economic diversity, political maturity, an openness of trade, investment policies, and the quality of education. I look at it that for economic growth there are three main ways to achieve it: population, demand, education. That is more people, more demand per person, and more production per person.
Vietnam’s Population
The first is to have a lot of people. More people means more demand for products. Vietnam is the 15th most populated country in the world. The population is approximately 95 Million (CIA Factbook). More people means more consumers. This is one of the major benefits of migration and immigration. While there isn’t a significant immigration to Vietnam the population is large and stable. Next is to have more things per person.
Consumer Demand
In 1993 60% of the Vietnam’s population lived under their national poverty line. In 2014 only 13.5% lived under the poverty line (Work Bank. Vietnam Overview). According to UC Davis, the percent of Americas under the poverty line was approximately 15% for 2014. This change in Vietnam means that more of the population is able to have a disposable income. More of a demand for things per person.
Education
With more people and more demand from the people, you need to supply that demand. How do you produce more things per person? Increase human capital and each person can produce more things. In 2013 school enrollment was 98% compare that with the United States at 93% for the same year (Work Bank. Compare United States with Vietnam). Vietnam’s population is large, growing in its demand for products and services and is educated.
Climate Change
Vietnam will be one of the most impacted countries from climate change. The Mekong Delta where many people live and work will look very different. One example is Ho Chi Minh City, formally known as Saigon. The city where 7 Million people live is expected to be flooded by 20% or more (The National strategy on climate change). Changes like this will present large economic and human costs, and present opportunities. The people displaced by the rising sea level will need new homes. More food will be needed to feed the same amount of people on less land. New agriculture technologies used to grow more food. From the ecological tragedy of climate change presents many economic opportunities for growth.
The Future
Even if I am wrong and the same thing happens to Vietnam as did the BRICS. I still thought about it and made a decision. Vietnam has economic demand from a large population and a population that is getting wealthier. It is well educated and predicted to be one of the largest economies in the future. Climate change will impact the country and present opportunities for economic growth through recovery.
The question I now ask in response to people asking me why Vietnam and why am I learning Vietnamese is “Why did you pick where you live?”. What criteria did you decide that the place you live now is the best place to live now and in the future? Why do you think the place you live will exist in the future? I know Vietnam will be a critical place in the future. Will your country or town be?
Work Cited:
List of countries and dependencies by population. Wikipedia. https://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population
CIA World Factbook. Vietnam. Updated May 01, 2017. https://www.cia.gov/library/publications/the-world-factbook/geos/vm.html
Work Bank. Compare United States with Vietnam. Net enrolment rate, primary, both sexes (%). http://data.worldbank.org/indicator/SE.PRM.NENR?locations=VN-US
Work Bank. Vietnam Overview. http://www.worldbank.org/en/country/vietnam/overview
UC Davis. Updated September 13th 2016. http://poverty.ucdavis.edu/faq/what-current-poverty-rate-united-states
Rising seas puts Vietnam in climate change ‘bull’s-eye’. Blaine Friedlander. April 21st, 2016. http://news.cornell.edu/stories/2016/04/rising-seas-puts-vietnam-climate-change-bull-s-eye
The National strategy on climate change. Socialist Republic of Vietnam. December 05, 2011. http://chinhphu.vn/portal/page/portal/English/strategies/strategiesdetails%3FcategoryId%3D30%26articleId%3D10051283
