August 6: Vietnam Visit

By Derek On August 6, 2014 Under Uncategorized

“In America, the best people go into the private sector. In Singapore, the best people go into government. In Vietnam, the best people leave the country.” Long time Vietnam observer

Hanoi2

I am just returned after a very interesting trip to Vietnam where I met movers and shakers in the corporate and government world in Hanoi and Ho Chi Minh City. My first visit to the country was 14 years ago and I have been several times over the years witnessing a curious form of development. China seems to develop in a more or less linear fashion whereas Vietnam’s path to modernity is much more erratic. Last month The World Bank published a report titled thrillingly, “Vietnam Solidifies Macroeconomic Stability, but Economic Growth Continues to Perform Below its Potential.” Vietnam is a country with incredible promise and it is just that promise that blinds investors because China, it ain’t.

I have to admit having had this blind spot about the country for many years mislead by the “surface positives,” which are indeed very impressive. Vietnam is a Confucian culture (they use chopsticks) with a long history of literacy, tenacity and a national determination which has shaken off invaders one by one from the Chinese, to the French and most recently the Americans. Nearly 70% of its 90 mn residents are of “working age” with over half of the population under 30 years old. That large youthful work force is expected to grow at least by 1 mn every year. Other growth drivers include the paltry 35% urbanization rate, vs. 55% for China – a lot more people will be leaving the rice paddies and moving to the big smoke looking to better their lot. Inward remittances from overseas workers of almost $1 bn a month should

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