It took almost forty years, but eventually Vietnam, once the nation-symbol of resistance to American influence, hardened in a war that ended symbolically with the fall of Saigon on 30 April 1975, capitulated on 8 February 2013, an eventful year for the country. It did so by opening the doors of the former Saigon to the first McDonald’s, for many, the true end of the Vietnam War.
The initiative, which was launched not by chance in the economic capital of the country and the forge of its development, was intended mainly for the middle class and was an overwhelming success, with 22,500 customers in the first 24 hours and 400,000 in the first month of opening. Followed in time by Burger King, Kentucky Fried Chicken and Starbucks, the other icon-product made in the USA, Coca-Cola, was readmitted to Vietnam in 1994 and currently its Vietnamese center is progressing towards the completion of a five-year plan that will lead within the next year to the creation of 6,000 jobs.
A significant signal, to propitiate the arrival of what is globally regarded as the first symbol of U.S. Capitalism, has been an agreement with the company run by the son-in-law of Prime Minister Nguyen Tan Dung. A character, a family, through which other initiatives of franchising are passing, that look with great interest at a country of 90 million inhabitants, at 48% employed productively in agriculture and 21% in industry, with a per capita income that has exceeded on average 1,500 euro per year.
Investments and exports drive the economy. The first is necessary for the restructuring announced in the public and private sectors in order to strengthen growth and attract capital and businesses, the second because it provides the necessary oxygen for the public finances, private enterprise and employment. At the moment, its shares are the most affordable of the entire South-East Asia, and coveted by foreign funds. As reported by Bloomberg, while inflation gives signs of diminishing and the cost of money falls, according to official figures, more foreigners entered the stock market in the first quarter of last year than in all of 2012, reaching a record 16,238 workers. The total figures of 2013 have concretized in a growth in the economy with a 5.4% share index record for the five year period, but still lower than half its maximum in February 2007. This was due to the officers chosen (or their lack), international contingency and the need of a restructuring after years of high growth.
The parabola of the Vietnamese economy, which brought it to a record growth of 8,4% in 2005, but is now descending to an estimated 4.9% approximately this year, and yet large potentials and actual weight still remain in a regional context.
Today international factors also contribute to the substantially positive prospects, such as the government’s commitment to make the local scene more attractive and secure for investors in the face of what will be the toughest prospective challenge, that is, the competition of Myanmar, but also a decline of interest in neighboring Thailand in the grip of political crisis, military government and the difficulty of getting out from under its own stereotypes. The case of PYN Elite is significant, the most powerful among the Finnish investment funds, which last year chose to reinvest 40 of the more than $100 million in proceeds from the sale of shares on the Bangkok stock market where it was present for some time, in about fifty companies listed on the Stock Exchange of Ho Chi Minh city.
The national stock market index, the VN Index, reached 600 points in March, an increase of over 16% on the year, dropping slightly in recent weeks, but always heavily controlled by the central bank, which over the past two years has carried out numerous cuts in the interest rate.
A situation seen as favorable, but still not optimal. The country and its leadership, slowed down by ideological shackles, bureaucracy, corruption and uneven growth, however, seem to have learned from the past, as evidenced by the convergent path of the public and private sectors on the basis of more reliable rules and guarantees.
In the background, there is also the governmental approval of an agency that will absorb the ‘bad’ credits of the banking system that have so far slowed down the growth. Meanwhile, the strong industrial investments continue, guaranteed by the social and political stability, abundant resources and a young population. Also encouraged by growing structures, an active population at an attractive cost, the potential offered by the Common Market of ASEAN (Association of South-East Asian Nations) that will materialize at the end of 2015, will make the country an attractive location for investment and tourism but will also make its limitations even more obvious, particularly in its political management.
Its adherence to a market economy is in fact incomplete, having dissociated itself since 1986 from that planned according to the Soviet model. Its middle-class, first exalted as the central element of development, is now the first to be hit by uncertainty. Real estate and financial investment have proved to be not only risky but often subject to bankruptcy; the gap in well-being and potential between the North and the South remains, with the latter providing 70% of the total wealth but with an inadequate return in terms of public investment, freedom of enterprise, and civil rights.
In a country in a crisis of motivation, weighed down by bureaucracy and corruption, but aware that the territory, the resources and people can be a driving force towards a strong increase in tourism, investment and production, the modernization of infrastructures continues. Exports also indicate a serious possibility of growth. The country has shown itself to be able to impose itself on the international markets with competitive prices and quality, becoming the leading exporter of rice in the world.
Along with the challenge of a thorough reform of its regime, there is added today and will continue to be added ever more in the near future, that of other emerging countries. Vietnam has a definite advantage in its experience and its 90 million educated and disciplined citizens. However, the challenge comes from the low cost of labor and the vastness of the needs of emerging nations who are also part of the same ASEAN, Indonesia and Myanmar at their head. (S.V.)