Vietnam--an Emerging Tiger?

November 9, 2011

Geography

• Extending 1,650 km north to south, Vietnam is only 50 km across at its narrowest point

• Low, flat delta in south and north; central highlands; hilly, mountainous in far north and northwest

CC

• Ho Chi Minh City 6 million

• HANOI (capital) 2.7 million

• Haiphong 1.9 million

• Da Nang 807,000 (2009)

Population

• 1 China 1.341• 2 India 1.195• 3 U.S. 311• 4 Indonesia 238• 5 Brazil 191• 6 Pakistan 175• 7 Nigeria 158

• 8 Bangladesh 150• 9 Russia 142• 10 Japan 127• 11 Mexico 112• 12 Philippines 94• 13 Vietnam 90

The People

• Age Structure: 25% 14 and under ; 75% born after 1975

• Median Age: 27.8 years• Ethnic Viet 86%• Religion—Buddhist 9.3%,

Catholic 6.7%, none 80.8%, but……

Labor Force

• 46.21 million (2010 est*.)

• Agriculture: 54%• Industry: 20%• Services: 26% (2009)• Country comparison to the

world: 13

*CIA World Factbook 2011

System of Government

• Communist State• Party Congress 1/11• Prime Minister Nguyen Tan

DUNG (since 27 June 2006) will continue

• CPV will continue with its grip on power

Looking toward the future

• “Vietnam is one of the best-performing developing economies in the world. It is going through a far-reaching transformation from an inward-looking planned economy to one that is globalized and market-based. It has the potential to be one of the great success stories in development.” World Bank

Growth!

• Real income has grown an average of 7.2 percent per year over the last decade

• GDP per capita has gone from $189 in 1993 to $1,113 in 2010.

• Vietnam’s poverty rate has fallen from 58 percent in 1993 to 10.6 percent in 2010.

Economic Milestones

• 1986 Doi Moi reforms proclaimed• 1995 U.S. and Vietnam reestablish diplomatic relations;

Vietnam joins ASEAN• 2001 Vietnam and U.S. sign BTA• 2005 PM. Phan Van Khai visits the U.S.• 2007 Vietnam becomes the 150th member of the WTO,

Commerce Secretary leads trade mission to Vietnam• 2008 PM Nguyen Tan Dung visits the U.S.• 2010 Vietnam becomes full member of TPP negotiations

Economy

• GDP—6.7% (2010)

• 7-7.5% (2011-15 target)

• GDP -- $102 billion (2010)

• GE -- $156 billion (2009)

Growth vs. Inflation

Macroeconomic Instability

The GVN has favored economic growth over macro stability.

• Growing inflation (12% in December 2010)

• Weakening currency/ Low foreign currency reserves

• SOE Reform (Vinashin)

State Owned Enterprises

Ownership Component of GDP about 34%!

Challenges

• Infrastructure (ports, airports, roads, power, and HR)

• Inflation• Human rights• Corruption• Red tape• Environment

Transparency International Corruption Perception Index 2010

Rank Confidence

Singapore 1 9.3Hong Kong 13 8.4

U.S. 22 7.1

Taiwan 33 5.8South Korea 39 5.4Malaysia 56 4.4Thailand 78 3.5Indonesia 110 2.8Vietnam 116 2.7Philippines 134 2.4

Education reform may be the biggest and most important

structural challenge.

Trading Partner

• The GVN is committed to deepening its trade relations with the United States.

• Engaged partner in Bilateral Investment Treaty (BIT) talks and our bilateral Trade and Investment Framework Agreement (TIFA) negotiations.

• In 2010, Vietnam moved forward on its commitment to WTO obligations by implementing laws and regulations to increase compliance of local industries.

TPP

• In November 2010, Vietnam joined the United States, Peru, Chile, Malaysia, Singapore, Brunei, New Zealand, and Australia to participate as a full member in the Trans-Pacific Economic Partnership

• TPP is a high-standard, 21st century Asia-Pacific

free trade agreement.

Best ProspectsCountry Commercial Guide Vietnam

2011

• Power Generation, Transmission and Distribution• Telecommunications Equipment and Services• Oil and Gas Machinery and Services• Information Technology (IT) Hardware and Software• Airport, Ground Support Equipment, ATM Systems, etc.• Environmental and Pollution Control Equipment and Services• Medical Equipment• Safety and Security• Education and Training• Franchising• Plastic Materials, Equipment and Machinery• Architecture, Construction and Engineering

How to contact us

U.S. Commercial Service VietnamTel: {64 4 3850-5199}

Email Hanoi: Sarah.kemp@trade.gov Email HCMC: James.mayfield@trade.gov

www.buyusa.gov/vietnam

www.export.gov

Into which specific ASEAN country or countries does your company plan to expand?

Brunei1%

Myanmar1%

Laos2% Cambodia

4%Singapore

7%

Malaysia8%

Philippines12%

Thailand12%Indonesia

18%

Vietnam35%

Combined Regional Respondents

BUSINESS DIRECTION IN ASEAN

U.S. Exports to Vietnam Grow by 19% in 2010!

• Vehicles: 445,968• Machinery: 368,391• Iron/Steel: 236,820• Meat: 221,340• Cotton: 171,770• Plastics: 150,012• Feed: 134,180

Environmental Issues

• Logging and slash-and-burn agricultural

• Water pollution and over fishing threaten marine life populations

• Groundwater contamination• Growing urban industrialization

and population migration are rapidly degrading environment in Hanoi and Ho Chi Minh City

Opportunities: Energy

• Double-digit increases in consumption

• State owned EVN monopoly

• Growing potential for private sector involvement

• Renewables…

Opportunities: Waste

• Production and consumption growth

• Need U.S. tech and expertise

• Modernization goals for 2025 and 2050

Opportunities: Water

• Key issue, growing challenge

• USTDA grants• Measurement, monitoring,

flood remediation and control

• Treatment and purification, water resource management

Opportunities:Green Building,

Architecture and Design

• Crane-spotting• If it ain’t broke, knock it

down• Short time horizon• Green is coming• Internationally driven

Summary Points on the Environment Sector

• Vietnam has environmental issues, but awareness is growing

• Difficult business environment, but opportunities abound

U.S./Vietnam Collaboration

• Science and technology• Technical assistance and

capacity building• Water management• Climate change• Nuclear safety • HIV/AIDS, AI, etc.

Financing

• ODA• World Bank• Asian Development Bank• Emerging Private Sector• Ex-Im Bank and OPIC…

Imports from Vietnam 2009

• 49.7 % APPAREL

• 11.3% FURNITURE

• 10.5% FOOTWEAR

• Grand Total $12.3 billion

http://www.stopfakes.gov/int_ipr_ap.asphttp://www.stopfakes.gov/int_ipr_ap.asp