Last month, I was invited to speak to a group of U.S. students who are participating in a fall study abroad program that begins in HCMC and spends the remainder of the semester in Hanoi. My assigned topic was Revitalizing Vietnam’s Economic Miracle. After a brief refresher on Vietnam in the recent past, I took them on a whirlwind tour of the socio-economic landscape of Vietnam of the past five years or so using relevant facts and figures and sharing personal impressions.
One of slides I shared with the group was entitled Vietnam is Heating Up! (PDF download), an upbeat assessment of Vietnam’s economy from Nielsen’s 2010 Personal Finance Monitor. Bullet points included:
- Healthy GDP growth in both urban & rural areas
- Vietnam is currently ranked equal #2 in the world on Nielsen’s consumer confidence index
- Business leaders continue to show bullish expectations for business growth over the next 12 months
- Well over 50% of total population is under 30 years old
Of course, it was around that time that the economy began to overheat, hence the name of my next slide: What a Difference Three Years Can Make. The inevitable economic downturn, whose causes and symptoms included sky-high inflation, rampant real estate speculation, rising interest rates, decreased foreign direct investment (FDI), overdevelopment, and excessive diversification, was the result of a lack of checks and balances in a free market economy set in motion with the renovation reforms of 1986. Simply put, greed reigned supreme. These are what I often refer to as the growing pains of a rapidly developing economy in a country that has just opened up to the world in the last 20 years. (To put this in perspective remember that the U.S.-led economic embargo, which it imposed against the former Democratic Republic of Vietnam in 1965 and extended to the entire country after the war, was lifted just 19 years ago by the Clinton Administration.)
We also discussed sustainable growth vs. development with a look at…
- Culture of philanthropy
- Educational system
- Environmental pollution/solid waste management/wastewater treatment
- Food safety
- Transportation infrastructure
- Income and wealthy inequality
- Tax policy
If a picture is worth a thousand words, these Google Earth photos from 2002 and 2012 of the Landmark Tower, a $1 billion Korean-invested project that is the tallest building in the country, and surrounding area tell a significant part of the story of Vietnam’s recent development, including some of its successes and failures.
Vietnam’s progress will ultimately be measured by how it addresses these pressing issues that affect the quality of life for all of its citizens. At the end of the day, the miracle will be not to return to the days of record economic growth but to create a path towards sustainable development, realizing that sustainable growth, an oxymoron, is both destructive and counterproductive.