With a prominent position in the heart of the ASEAN region, Vietnam is one of the world’s fastest growing emerging markets, bordering the Gulf of Thailand, the Gulf of Tonkin, and the South China Sea, as well as China, Laos, and Cambodia.
While Vietnam's economy remains dominated by state-owned enterprises (SOEs), which still produce about 40% of GDP, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive export-driven industries. Vietnam joined the WTO in January 2007 and became an official negotiating partner in the developing Trans-Pacific Partnership trade agreement in 2010.
Poverty has declined significantly and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year.
Vietnam’s average GDP growth over the past 20 years exceeded 7%, which is second only to China and ahead of all other BRIC and ASEAN economies. The country’s rapid urbanization, the emergence of an affluent middle-class, and efficiency gains in agriculture and agribusiness combine for a compelling investment case.
Since WTO ascension in 2007, Vietnam has secured its position as one of the world’s top exporters of staple products including rice, rubber and pepper, as well as manufactured goods such as textiles and garments. Recently, major electronics producers have relocated to Vietnam including Canon, Foxconn and Intel. This bodes well for Vietnam and is an important step forward in the country’s regional competitiveness.
The nation’s emerging consumer market offers attractive investment opportunities as urban families enjoy rising disposable incomes and seek to improve their living standards. Growing foreign direct investment, seeking to capture the increasing needs of Vietnam’s 90 million inhabitants, is testimony to the country’s emergence as a consumer market in its own right. As food continues to be in demand around the world amid global resource scarcity, Vietnam is well placed to increase exportable agribusiness productivity throughout the supply chain. Foreigners continue to pledge new development assistance as well as direct investment. However, the government's strong growth-oriented economic policies have caused it to struggle to control one of the region's highest inflation rates, which reached 11.8% in 2010. Additional challenges lie in building foreign exchange reserves and gradually shrinking the trade deficit.