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.
3 thoughts on ““Revitalizing Vietnam’s Economic Miracle””
From Thanh Nien News, 8 October 2013:
Vietnam’s economy is projected to grow at a moderate rate of 5.3 percent in 2013 and 5.4 percent in 2014 as sluggish structural reforms in banking and state-owned business sectors are still weakening the growth, World Bank says.
While Vietnam’s macroeconomic conditions have improved for the past two years with falling inflation, current account surplus, stable exchange rate, and increased reserves, the GDP growth will not be high in the medium term due to unsolved problems in banking and state owned enterprises sectors, World Bank said in the report released Monday.
I have stated in my igored book, “the 1-2-3 Stratgy for VN” the prescription: 1) Make and export high quality goods 2) Brand and sell your own products in outside markets 3) Target recruit support industries. That was a year ago and now I would add:
4) Create a strategic intention to FIX VN, and not sell it out
5) Move from debt financing to local equity financing and own your own country.
6) Pay official salaries and bonus so people do not NEED to steal
7) Rediscover and recreate a revoloutionary spirit.
So now you have the lucky seven!
Corporation Invasion Vietnam!
The Year is 2040, only 26 short years from now…
It has been 20 years since Vietnam switched from a state controlled bank to the “Private Independent” Central Bank. 20 years ago nobody dreamed that the currency of Vietnam, the dong, would be controlled by foreign bankers. Now decisions on currency valuation are now in the hands of some people in London and NYC. It seems that the Vietnamese never saw this coming…
For the last 15 years, the food security and sovereignty of Vietnamese farms has been dictated by foreign commodity markets and again a small group of people are making decisions on what Vietnamese farmers will grow, at what price they will sell, and how it all is hedged and financed. All of these decisions are made outside of Vietnam at this point. Monsanto seeds are the standard and they are sold on a subscription basis (called licensing of Intellectual property)
The privately owned and controlled export bank of Vietnam is setting the terms for production, quality and they have become the ultimate middleman, the chief marketing and production officer of Vietnamese manufacturing economy. This Export center handles the customer orders, since they are a part of the foreign mega ruling class cartel. What VN makes, how it makes it, and how and what price are all decisions made abroad.
At this point much and many income producing assets are foreign owned. Farmland, mines, powergrid, water tables and the rest. This happened little by little. The outsiders printed money out of thin air and lent it, drug dealer syle, to Viietnam until it could not pay back. Then the WTO police came in an took the assets in settlement in Global courts.
Many Vietnames look back in regret at how EVN was corporatized and now needed power is being diverted to Malaysia and these decisions are being made in Hong Kong. Now that the power grid and the water tables are foreign owned, there is nothing Hanoi can do.
Then there is the costly clean up from the Nuclear Plants accident…all funded by austerity and the work of local Vietnamese. It seemed like somebody cut corners and did not maintain the Nuke facility well and now millions are radiated and thousands already dead. This makes agent orange look like a small problem.
Vietnam and corporatism. Back on 2005 to 2020 many Vietnamse thought this “equitization” thing was a pretty good deal. At the time, it seemed like free fast money… Santa Claus! Almost as if the Vietnamse thought that the foreigner would save them from themselves? Little did they know that “equitization” or its cousin word, “privatization” really means CORPORATIZATION.
Freedom… Independence… Happiness… gone…Cartelocracy.
The Strategy of the Opposites: How to Prevent the above nightmare:
• From “growth” to “selective development”
• From currency weakening to stronger currency.
• From Foreign Debt/Equity Financing to Local Equity Financing.
• From Integration to Independence using “Selective Integration” with bi lateral and other agreements and getting out of the WTO and TPP. It also advocates getting rid of foreign companies which are intent on taking over Vietnam via the financial industry, and the agra industry. This means being wary of the IMF (international mafia fund), the World (domination) Bank and the like. Others who need to be kicked out are Monsanto and other Agra cartel members who wish to destroy food sovereignty in Vietnam by turning seeds into subscription income via licensing of GMO seed as “intellectual property”
• Quality , Branding, and Vertical integration to Market ownership and control. Building of Support industries. All opposite from today’s strategy.
• True SOE reform using the Social Enterprise Model. This includes massive change in hiring policy and hiring the best graduates who have returned from foreign universities with MBAs etc. Salaries are to be benchmarked against the world so that executives and workers are paid well so they do not have to steal.