Introduction to
ECONOMIC PROSPECTIVE
of
VIETNAM
Presented by Cao Hao Thi.
1
Outline
Vietnam overview
 Political situation
 Economic situation
 Summary and conclusions
 Q&A

2
Viet Nam overview

Abundant endowment
– Rich agricultural land
– Minerals and petroleum

GDP: $44 billion, growth rate: 8.4 % (2005)
– Agriculture:
– Industry:
– Service:


20.9%
41.0%
38.1%
GDP per capita $2800 (2005)
Population:
– Almost 84 million
– Half under 25
– Growth rate: 1.02%
3
Viet Nam overview

Labor
– Labor force: 44.39 million (2005)
» Agriculture:
» Industry:
» Service:
–
–
–
–
20.9%
41.0%
38.1%
Unemployment rate: 5.5%
Large and well educated
Inexpensive
Problems
» Managerial and English skills
» Tax
4
Viet Nam overview

Geography
– North (Ha Noi)
– Central (Da Nang)
– South (Ho Chi Minh)
Area: 329,247 sq km
 Administrative divisions:

– 59 provinces
– 5 municipalities (Ha Noi, Hai Phong, Da Nang,
Ho Chi Minh and Can Tho)
5
Political situation
6
Political structure

Official name
– Socialist Republic of Vietnam (SRV)

Form of state
– One party rule

The executive
– The cabinet

Head of state
– The president
7
Political structure (cont’d)

National legislature
– National Assembly

Local government
– 59 Provinces/ 5 municipalities

National government
8
Political structure (cont’d)

Main political organizations
– The Communist Party
– The Fatherland Front
9
Political structure (cont’d)

Main members of the cabinet
– Prime minister (1)
– Deputy prime ministers (3)
– Key ministers (18)

Execute policies and directions set by the Party
10
Political issues

Balance
– Economic growth
– Equality
– Political stability

Role of private sector
– Engage in private business (2002)
11
Vietnam’s economy
Economic structure
Vietnam’s economy
Investment climate
Economic issues
12
Economic structure

Multi-component economy
– Entire people (state owned)
– Collectives (cooperatives)
– Private individuals
Market mechanisms
 Under the management of the State
 A socialist orientation

13
Economic structure

Agriculture

Industry

Services
14
Economic structure

Agriculture and forestry (2005)
– 70% labor force
– 21% GDP robust growth (4.4%)
– Industrial crops
» Coffee
» Rubber
» Sugarcane
» Rice
15
Economic structure

Industrial sector
– Growth 14.4% annually
– 41% GDP
– Private sector grew fastest

Service and investment sector
– 38% GDP
– Fast growth
 Develop financial service
16
Vietnam economy

“Market-based economy with socialist orientation under
state management”

Macroeconomic indicators improved

More to do
– Benchmark the country’s progress
– WTO  member in 2006 ?
17
Vietnam economy

Challenges
–
–
–
–
Increase investment
Foreign investment (capital, skills, technology and market)
Prepare for the integration (region and world)
Legal and administrative reform
18
Investment
Domestic Investment
Large stock of domestic savings
 New enterprise law (Jan 2000)
 Challenges

– Land
– Credit
19
Investment Climate

Openness to foreign investment
– Targets: FDI and ODA

Some issues
– Investment environment
– “State-supervised” market economy
– Shortcomings
20
Investment Climate

Shortcomings
– Infrastructure
– Legal and financial systems
– Shortage of trained personnel.
– Issuance of investment licenses and implementation of
projects

Changes in 1996 Foreign Investment Law (effect July
2000)
21
Economic issues

Uneven improvement in business environment
– Discrimination between Private and State sectors

Monopoly sectors (Telecom, etc.)

Transparency and consistency
22
Summary and conclusion

Young and growing country
– Potential market
– Cheap labor
Government efforts
 Improved economic indicators
 Challenges and more to do

23
THANK YOU
FOR YOUR
ATTENTION!
24