Vietnam's Growing Economy Bucks World Recession Trends
The developing economy of Vietnam seems to be so far defying the worldwide recession trend that is sweeping through much of the industrialized world including Asia. Just today, in Japan there is the official recognition that that economy is indeed in it's second recession since 2001, when the 9/11 attacks in the U.S. also harmed the Japanese economy as well.
The Communist government of Vietnam is much like that of the pragmatic Communist leadership of China in that it recognizes that it must create an economic climate that is favorable to foreign investment and transparency and openness are essential to enticing new investment in the nation. Vietnam has even joined the growing number of world stock trading markets when it opened the Ho Chi Minh City Securities Trading Center in 2000, which has been growing and creating more links to other Asian stock exchanges such as those in South Korea among other nations. However, banks in Vietnam have yet to move into higher public confidence and better management, and still lag and are considered to be one of the most important areas where Vietnam can make substantial improvements.
Another serious problem for Vietnam's economy is erratic rates of inflation. During the first half of 2008, Vietnam suffered from an inflation rate in excess of 20% due to higher worldwide commodity and food prices. While 20$ inflation sounds disastrous, it is still far better than the simply awful 160% inflation rate recorded during 1988 by comparison, which did slow to a little over 3$ during the year 2000. But Vietnam's economy is largely agricultural in nature, and some prices of goods such as rice or soybeans have had a huge impact on the inflation rate of Vietnam.
What Vietnam also has to export is guest workers. And just recently new guest workers from Vietnam have started work in Russia and other nations. And many major companies such as Canon have used Vietnam to produce some of their electronic products such as computer printers because of the low cost of labor, stable electricity supply in major cities and other attractive draws for foreign investment.
The fact of the matter is that the economy of Vietnam has tremendous areas for growth, and the large and growing tourist industry which accounts for as much as 38% of the gross domestic product, have only contributed to more growth of investment in Vietnam. Over 8% of the tourists now tend to be from the United States, as both nations seek to put more distance between the long war that divided the two nations for many years.
Vietnam will need to continue trends towards openness and an environment that is more encouraging towards outside investment, but it seems that the nation has been making some progress there and working hard to become like a successful smaller version of the economic transformation of China where capitalism coexists in a country that is officially Communist. So far only North Korea, and to a far lesser extent, Laos, are the only remaining Asian Communist states to sadly lag in real economic integration into the larger world economy. But Vietnam seems to sincerely seek a major role as an Asian force in the world economy and to vie with China for it's fair share of prosperity.