The signs of Vietnam’s economic development are visible on the skyline of Ho Chi Minh City, or Saigon as it is still referred to by most who live here.
The almost completed Vietcombank tower, designed by renowned architecture firm Pelli Clarke Pelli, is a soaring art deco-inspired structure and sits only a few block north of the city’s tallest building the Bitexco Financial tower, which was opened in 2011.
It is often easy to get caught up in short-term economic indicators, but sometimes it is useful to stand back a little to take in the longer-term view. Like, say, a few decades back
Thirty years ago Vietnam was one of the poorest nations on earth, today it is officially a lower middle income country. In 1986 the policy know as Doi Moi was instituted to move the country away from a centrally planned economy back to a market oriented one.
Visitors to Vietnam, particularly from western countries, are often surprised by the office towers, high-end boutiques and bustling streets. Their impressions are often set from the images of conflict and rural poverty beamed on to television screens around the world in the 1960s and 1970s.
To say the country has well and truly moved on is something of an understatement. In 1986 the average annual income was around US $100. This figure is now almost $2,000 and double that in urban areas.
Like the rest of the world, Vietnam suffered the of the ill effects of the global financial downturn, but GDP growth in the first half of 2015 reached 6.3%, the equivalent of its growth average during the 2000s. After struggling with rising inflation in recent years, the CPI rose only 0.6% in August 2015 compared to 4.3% for the same period the year before.
Vietnam is about to ratify the Trans Pacific Partnership trade agreement which some analysts are predicting could provide an 11% boost to the economy over the next 10 years. Talks are also well advanced on a free trade deal with the European Union.
Helping to drive this growth in a country of 94 million people is a disproportionally young and well connected population. According to 2014 data, more than 40% of the populations was under 25 years of age.
The country is also incredibly connected, with just about every café, restaurant or bar offering free wifi to patrons, and smartphone ownership exploding. The 2014 The Global Connected Consumer Study by research firm TNS found 40% of the population access the internet on a daily basis, while one in thee Vietnamese own a smartphone.
There have certainly been growing pains along the way. Income disparity is growing, poverty remains stubbornly persistent in the country’s ethnic minority groups, corruption is a continuing issue across all levels of government, while business and property ownership regulation and red tape remains burdensome despite recent changes to help streamline these processes. The World Bank’s ease of doing business index ranks Vietnam 90th out of 189 surveyed economies.
However, despite these challenges there is much to be positive about in the economic outlook for Vietnam. Considering where the country came from only 30 years ago, it can be regarded as one of the quiet success stories of Asia.
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