The enviable rise of Vietnam is an absolute wonder of the world: An analysis

Dr. Forqan Uddin Ahmed :
The journey between Bangladesh and Vietnam started at about the same time. Today the gap is very high. On 16 December 1971, 93,000 Pakistani soldiers surrendered to the joint forces in Dhaka. On April 30, 1975, the last group of US troops to flee, boarded a ship bound for the United States. On the same day, a tank of North Vietnamese fighters smashed through the front door of the Presidential Palace in Ho Chi Minh City. Then the president of the US-backed South Vietnamese government came out and said he was ready to step down. The winners of the North replied, “How can you give up what you do not have?” In 1977, the two Vietnams became one. Planning, strategy and reform have made Vietnam a strong economy today. To give just one example, Vietnam ranks 69th in the World Bank’s Easy Business Index. Whereby the position of Bangladesh is 168th. The multinational companies are now choosing Vietnam as their manufacturing hub after China. Vietnam is the biggest beneficiary of the trade war andthe rising cost of production. Even Vietnam is the list affected country from coronavirus risk and related issues.
Over the past 30 years, Vietnam has invested heavily in human resource development and infrastructural development, facing with a rapidly growing population. Vietnam now has a population of 9.5 million. Half of them are under 35 years of age. In 1986, the population of the country was 6 crores. It is said that the larger the population, the greater the demand for employment. However, Vietnam has invested heavily in the infrastructure sector. As a result, population has not become a problem for the country. The Internet has become cheaper for the public. The Fourth Industrial Revolution is knocking on the door of the Southeast Asian country and they are making necessary preparations to set up IT infrastructure to reach that goal. Vietnam has become a hub for foreign investment and manufacturing in Southeast Asia due to the necessary infrastructure and market-friendly policies. In addition to the ready-made garment sector, large electronics manufacturing companies have also set up factories in Vietnam.
When the 20-year Viet Nam War ended in 1975, Viet Nam’s economy was one of the poorest in the world, and growth under the government’s subsequent five-year central plan was anemic. By the mid-1980s, per capita GDP was stuck between $200 and $300. But then something changed. In 1986, the government introduced “Ð?iM?i”, a series of economic and political reforms, and steered the country to becoming a “socialist-oriented market economy”. Today, Vietnam is one of the stars of the emerging markets universe. Its economic growth of 6-7% rivals China, and exports are worth as much as the total value of its GDP. Anything from Nike sportswear to Samsung smartphones are manufactured in this ASEAN nation. Such is the success of the country, Sheng Lu, an assistant professor at the University of Delaware told the Financial Times that there are few spare workers or production facilities left.
The government’s drive towards an open economy also included domestic reforms. In 1986 the country created its first Law on Foreign Investment, enabling foreign companies to enter Vietnam. Since then, law firm Baker & McKenzie said in a 2016 report, the law has been revised a number of times, mainly to adopt a more pro-investor approach while aiming to reduce administrative bureaucracy and better facilitated foreign investment into Vietnam. Vietnam’s efforts did not go unnoticed in international rankings. Vietnam made progress on everything from enforcing contracts, increasing access to credit and electricity, paying taxes and trading across borders. Finally, Vietnam invested a lot in its human capital and infrastructure. Vietnam made large public investments in primary education. This was necessary, as a growing population also means a growing need for jobs. But Vietnam also invested heavily in infrastructure, ensuring cheap mass access to the internet. The Fourth Industrial Revolution is knocking on Southeast Asia’s door, and having a sound IT infrastructure in place is essential preparation.
Could anything stop Vietnam’s ascent? As an emerging market, it may also fall out of favor as a place to invest in because of the strengthening dollar. But for now, Vietnam looks to profit from rather than be hurt by increasing global trade tensions. Although the US has backed out of the Trans-Pacific Partnership, its antagonism so far has had a greater impact on China than on Vietnam. The US government slapped imports on hundreds of billions of dollars’ worth of Chinese products, which has led companies with a manufacturing site in China to consider relocating to countries like Viet Nam. But even if Vietnam does get hurt by increasing Western protectionism, it can still count on its own burgeoning middle class to deliver the next boost of growth. Both domestic and international retailers are eyeing rapid expansion in the country, as more and more people gain the purchasing power to consume goods and services. It may mean that one day, instead of the hustle and bustle of small shops and scooters, Vietnam will be characterized by large malls and cars. But for now, Vietnam is growing, at its own pace, and in its own way.
So how did this growth miracle happen? According to analysts from the World Bank and the think tank Brookings, Vietnam’s economic rise can be explained by three main factors: “First, it has embraced trade liberalization with gusto. Second, it has complemented external liberalization with domestic reforms through deregulation and lowering the cost of doing business. Finally, Viet Nam has invested heavily in human and physical capital, predominantly through public investments.”Why Vietnamese workers are more productive than Bangladeshi workers? One of the major reasons for this is that Vietnam spends far more than the government spends on human resource development in Bangladesh. And because of this, Vietnam has come a long way in developing skilled human resources.
The incidence of corruption is much lower in Vietnam. Vietnam’s workforce and manpower are more educated, skilled and hardworking than Bangladesh. The development of Vietnam’s physical infrastructure is remarkable. Vietnam has overtaken Bangladesh in the export of non-traditional garments and is occasionally moving to the second position in the world after the People’s Republic of China. Vietnam is the second largest exporter of electronic products in South-East Asia after Singapore. Vietnam has overtaken Thailand to become the world’s second largest rice exporter after India. Vietnam ranks second in the world after Brazil in coffee exports.
The development of Vietnam is known to the whole world as the Economic Miracle, is a lesson for us today. We can learn a lot from the development of a mixed socialist market economy, investment-friendly environment and sound planning in Vietnam. Productivity and efficiency have taken Vietnam to this stage today. The rise of the enviable economy in Vietnam has struck the world. Human resource development has strengthened the foundation of Vietnam’s economy. Multinational companies from around the world have flocked to Vietnam, and the development model of a corruption-free Vietnam has gained worldwide acceptance and has become world-renowned.
Finally, we can say that the economic story of Vietnam is just miraculous. Moreover, productivity and efficiency are the factors expediting Vietnam ahead. Again, the enviable rise of Vietnam is an absolute wonder of the world. Besides, human resource development has given Vietnam momentum. Above all, Vietnam model is a lesson for development to other countries.

(Dr. Forqan Uddin Ahmed, former Deputy Director General, Bangladesh Ansar VDP & Writer, Columnist and Researcher.)