Updated date:

Vietnam's Overlooked Economic Resilience

Author:

Formerly an economics and humanities student at UCLA, Oe Kaori is now an intern for the United Nations.

vietnam-is-overlooked-for-its-economic-resilliance

Prosperity in the So-Called "Third World"

Poverty in Vietnam continues to fall, and ethnic minorities are seeing their economic fortunes rise, according to a new World Bank report. Today, it enjoys one of the fastest economic growth rates in the "third world" and the second-highest per-capita income in Asia. It is also poised to become the youngest Asian nation to trade its history of colonial poverty for hard-earned prosperity.

Although Vietnam remains one of the poorest countries in the world, poverty has fallen considerably from 58% in 1993 to 37% in 1998. The number of people living on less than $2 a day has fallen from 60% to less than 5%, according to the World Bank report, leaving few at risk of falling back into poverty.

While reducing inequality remains a challenge, inequality between the top 1% of income earners and the poor fell to just 2% from 2014 to 2016, a marked improvement from 7.5% in 2014 and 9.1% the previous year. Since then, new poverty-reduction targets have been set in Vietnam. To continue addressing poverty-related problems, Vietnam has set 17 targets to be met by 2030, including improving the country's poverty rate and health system.

Skilled labor has helped Vietnam move into the production of increasingly sophisticated goods, but the country's chief economist, Nguyen Phu Trong Thi, worries about the ever-rising costs of education, health care, and other social services. Vietnamese officials say they are determined to avoid a repeat of the economic collapse of the late 1990s and early 2000s. "To develop strategies to improve communities, we work with the Poverty Reduction Policies Project to find sustainable solutions," says Nguyen.

vietnam-is-overlooked-for-its-economic-resilliance

Production and the Rise of Exports

An export-oriented economy has enabled Vietnam to escape poverty, but it also means that the economy can easily be affected by the global economic situation. Vietnam is one of many developing countries that has been successful in the export market for handicrafts.

In 1951, resistance to the war economy developed, the Vietnamese State Bank was established, and trade and commercial activities began to develop. Vietnamese banknotes were introduced on 10 June 1951 and were an important point in the distribution of goods.

Moreover, political tensions began to thaw, and in 1951, the U.S. government imposed an import embargo from Vietnam, leading companies with manufacturing facilities in China to consider relocating to countries outside Vietnam. The U.S. eventually ended the trade embargo that had stifled Vietnam's economy for decades.

Recent growth has been driven by migrant workers, increasingly women working in neighboring Asian countries, while Vietnamese students from abroad have settled in the countries where they graduated from university. Vietnam's international migration flows will continue to be affected, and the Tribunal's decision will certainly not benefit Vietnam.

The export values of Vietnamese crafts have risen by around 0.225 percent, which will lead to an increase in the export value of the country's goods and services to China of around 1,000 percent. We see that the gap in economic development between the two countries would be seen as an advantage for the exchange of goods, and exports that would have been encouraged and promoted would have been made. This variable in Vietnam's GDP has had a positive effect, but it has also had a negative effect on goods exports to the United States and China.

Tourism as a Money Maker for the Vietnamese Economy

In developing countries like Vietnam, a boom in the tourism industry can help generate a significant amount of economic benefits for tourism-related businesses. Widely known as a seaside destination, Vietnam has rapidly become a destination that caters to the demand for luxury tourism by opening world-class resorts to compete with traditional destinations such as Thailand and Indonesia. In the developing world, the economic sector has become the spearhead of tourism, and Vietnam has recently become known for its popular seaside destinations.

This is one of the reasons why many travelers consider Vietnam to be the ideal destination for their next trip to Asia, but a cheap trip to Vietnam also has its downsides. The tourism industry is a good place to read all about scams in Vietnam so you can monitor your steps when making travel arrangements and stay safe when you travel in and around Vietnam.

Vietnam is one of the few destinations that has an incredible landscape and a deep, heroic history. It is a mixture of unique heritage and natural beauty that draws millions of tourists to Vietnam. Vietnam is also a safe destination due to its low crime rate and high quality of life. Vietnam is not the war zone it used to be, so travelers who want to visit the country have many options.

vietnam-is-overlooked-for-its-economic-resilliance

Vietnamese Agriculture

Increased production of rice and coffee has made Vietnam the world's second-largest coffee exporter over the past decade, and agriculture is one of the most important sectors of the Vietnamese economy and export economy. Compared to other sectors, agriculture has enjoyed export-led growth since the late 1980s, with Vietnam resuming rice exports after years of scarcity. But the fall in world prices for rice, coffee, and other agricultural products has led to a sharp fall in prices, which is squeezing farmers' incomes.

Over the past decade, Vietnamese exports to the U.S. and other countries in the Asia-Pacific region have grown remarkably. Rice exports have doubled, tea and pepper exports have increased fivefold, and coffee exports have more than quadrupled.

Yarn produced in Vietnam is consumed domestically by the export-oriented textile and clothing industry and exported directly to countries such as China, Japan, South Korea, India, and Thailand.

vietnam-is-overlooked-for-its-economic-resilliance

The Future of Vietnam

The future of the country looks promising from a statistical standpoint. The country does very well in education and its exports keep it running. Vietnam is such a beautiful country that it is reminiscent of how Japan used to be.

We share the same values, and a lot of Vietnamese workers are dutiful with their work. The country has room for improvement, however, cultural exchange keeps it healthy. Have you ever been to Vietnam? What was the economy like there when you last visited? Comment and let other readers know.

Sources

  • https://www.japantimes.co.jp/news/2020/08/26/business/economy-business/coronavirus-economic-boom-vietnam/
  • https://www.usitc.gov/research_and_analysis/tradeshifts/2013/vietnam.htm
  • http://www.fao.org/3/ag089e/AG089E09.htm
  • https://voxdev.org/topic/firms-trade/lowering-barriers-trade-impact-vietnam
  • https://www.ocf.berkeley.edu/~tbrooks/portfolio-item/danida-vnm-jpn/
  • https://www.foodexport.org/get-started/country-market-profiles/southeast-asia/vietnam-country-profile
  • https://www.britannica.com/place/Vietnam/Agriculture-forestry-and-fishing

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 Oe Kaori

Comments

Oe Kaori (author) from Yokohama Japan on October 20, 2020:

I want to go back to Vietnam because the rice is so fragrant there than Japanese rice. I enjoyed the locals and cute little shops

Liz Westwood from UK on October 20, 2020:

In recent years I have come across more people who have visited Vietnam. I hope that when we can all travel freely again, Vietnam's tourist industry will prosper.

Related Articles