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Having attained middle-income status, Vietnam aims higher
- singularity2001 10y agohey I liked the previous title better
- Jean-Philipe 10y agoMe too!
- cheriot 10y agoHow Asia Works is one of the best books I've read this year. https://www.amazon.com/dp/B00B3M47VC/ https://www.amazon.com/dp/B00B3M47VC/ The handful of countries than have industrialized in the 20th century (Japan, Taiwan, South Korea) have taken similar paths that are very different than the policies suggested by the IMF and the World Bank. This Economist article, despite the positive tone, makes Vietnam sound more like the stalled developments in Malaysia than the success of South Korea.
- RobertoG 10y ago"The handful of countries than have industrialized in the 20th century (Japan, Taiwan, South Korea) have taken similar paths that are very different than the policies suggested by the IMF and the World Bank" That can't be stressed enough. What has been done, by the IMF and associates, in the name of "development" have caused innumerable suffering. Of course, the people responsible of those policies not only are not challenged but generously rewarded.
- sprafa 10y agoWill they be remembered as mass murderers I wonder ? How many people have died due to IMF policy by this point ? In Portugal alone I had to watch people go out in the street and almost starve. This was in a small Catholic town, where everyone (including myself) where constantly trying to help them. But there was just almost nothing left. I was living with my parents along with my 3 brothers, now work in London. And here it's no different. Hundreds of thousands, maybe more, are homeless and perhaps even starving. For what purpose?
- varjag 10y agoThing is, IMF "advice" that you have to take is most often given along with loan package, where the recipient country is already in shambles - typically due to policies of their own. I see IMF as a convenient externalization of responsibility by national politicians and people who voted for them and their disastrous policies. If the bottom falls out of your country, it's not necessarily someone's nefarious plot.
- RobertoG 10y agoThing is, that's not true. The goal is profiting from those countries or, as in the case of Europe now, to force policies more 'pro-business' or, in other words, less 'pro-people'. We are talking about disastrous policies imposed from the outside with, yes, normally, the compliance of a local corrupt establishment. I recommend reading this: https://www.globalpolicy.org/component/content/article/209/42969.html https://www.globalpolicy.org/component/content/article/209/4...
- varjag 10y agoI beg to disagree. The advice tends to be "pro-market" and less "pro-populist" by necessity, since IMF is concerned with a living chance of seeing its money back and less so with being popular on elections in recipient country. Then there's always that option of not taking IMF money.
- RobertoG 10y ago"Then there's always that option of not taking IMF money." Is there? Who have this option when the people in power is going to profit immensely. The IMF is an institution that have expired its utility. It made sense when there was fixed exchange rate between countries. Since then, it has mutated to an instrument to impose policies that doesn't work. That's a fact. We could, I suppose, argue about the reason of why those policies are imposed and not others. It could be profit or it could be ideological but we can't argue about the results in contraposition to the results of countries that don't follow that development path.
- jpatokal 10y agoIt sounds like Vietnam has done a much better job of keeping politics out of private industry though. Compare with Malaysia and its blatantly racial (and often harebrained) preference schemes, which end up stifling growth and encouraging talented non-Malays to GTFO. https://en.wikipedia.org/wiki/Bumiputera_(Malaysia)#Policy https://en.wikipedia.org/wiki/Bumiputera_(Malaysia)#Policy
- contingencies 10y agoAll of the business owners I surveyed verbally in Vietnam earlier this month outlined horrific amounts of government red tape and informal facilitation payments for even the slightest bureaucratic requirements. That includes both locals and foreigners.
- drzaiusapelord 10y agoI find it interesting that most post-Communist societies don't ever really get rid of their Communist-era massive bureaucracies. There's never any clean-up or reform, nor any real moves to weed out corruption. Its just one day the red tape goes from centrally planned projects to capitalist projects. Often, the real red tape cutting means a culture bribes and other favors towards government officials. Russia is a pretty good example of how high-corruption and bloaty bureaucracy remains post-Communism. Businesses there just consider bribes part of their budget.
- NhanH 10y agoHas any country, ex-Communist or otherwise, ever been able to clean up/ tone down their bureaucracies, except the case of a total collapse?
- oli5679 10y agoEast-Germany arguably doesn't count because of the impact of the reintegration with West-Germany. Excluding this, Estonia has the highest rank in the 'Doing Business' Index of a former Communist state, and Czech Republic has highest GDP/capita. Both are significantly less bureaucratic than USSR days... https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PP... http://www.doingbusiness.org/rankings http://www.doingbusiness.org/rankings
- cageface 10y agoI've spent the last six years in Vietnam and the progress the country has made in that time is evident everywhere. There's been a lot of reckless development and many people have been left behind but there's no doubt there's also a growing middle and upper class. Corruption is endemic and is certainly one of the reasons Vietnam is no South Korea but it's also not the worst-run country in the region. You know things are changing when more and more American Vietnamese are coming back to start businesses here.
- cheriot 10y agoThe original Asian Tigers included Thailand, Malaysia, and the Philippines when they boomed in the 90s. After the '98 crises, though, none of them were able to get back on track. There's good and bad ways to feed a boom in the short term. I hope Vietnam figures it out. I was there for a month earlier this year and it's a fantastic place.
- cageface 10y agoVietnam has its ups and downs like every country but I can't think of anywhere else I'd rather live right now. Every day feels like an adventure.
- simonebrunozzi 10y agoSingapore was an Asian Tiger, too - and it did very well. You should have included it in your list.
- jstanley 10y ago> The handful of countries than have industrialized in the 20th century (Japan, Taiwan, South Korea) have taken similar paths that are very different than the policies suggested by the IMF and the World Bank. Can you elaborate on this? I know nothing about either their policies or the IMF+World Bank's policies. What are they and how do they differ?
- cheriot 10y agoDeveloping countries are influenced by rich countries along the lines of https://en.wikipedia.org/wiki/Washington_Consensus https://en.wikipedia.org/wiki/Washington_Consensus. To poorly summarize the book, the path that works is 1. Land reform to give small plots to families. This boosts yield and turns unskilled labor into foreign currency. 2. Protectionist policies balanced by government requirements to export so companies have to innovate instead of milking the local market. 3. Financial controls to prevent capital flight and make capital available to strategic industries. Often at the expense of savers. I highly recommend this book to anyone interested in History, Economics, or Current Events.
- Nokinside 10y agoThis is exactly how Finland became developed country. 1. Land reform 1918. 2. Protectionist policies, import restrictions and increasing exports trough war reparations after WWII. 3. Strict financial controls and industrial policies. Finland ended financial controls in 80's. (Most Nordic countries ended their financial regulations in the 80's).
- ptaipale 10y agoThe interesting point in Finnish case is that the land reform was (at least nominally) a central requirement of the Red faction in the development leading to civil war in spring 1918. The White faction won the war, and it ended in a bloodbath. with the Reds severely repressed. But the law about land reform was approved two months after the civil war ended. Twenty years later, when Soviet Union attacked the country as Stalin believed the Reds still wanted a retribution, he faced a unified nation where the sons of Reds and Whites alike fought together, well enough to avoid occupation at the end of WWII, though the reparation payments were heavy indeed. And then, at present day, many people say that "the land reform was the biggest mistake of the century" because it created lots of small farms instead of big, centralized agriculture. Anyway, giving people a patch of their own land seems to be a good way to commit them to defend and work for it.
- bobcostas55 10y agoThis is a very bad post hoc ergo propter hoc argument. There's no reason to believe that going against IMF advice helped. Many, many nations that did NOT industrialize also went against IMF advice. You need to show a direct connection between the two. Which you can't.
- nabla9 10y agoArguments and data are in the book.
- davidf18 10y agoAccording to (former) Vietnamese that visit Vietnam and have family there, South Vietnam still retains many of its pre-war capitalist culture and roots compared with the Communist North (and also compared with China). There is also a large now successful Vietnamese Diaspora in the US and perhaps other countries that are familiar with Vietnam and might want to do business there.
- ptaipale 10y agoIt would make sense that people who worked and fought for South Vietnam were originally mostly from there. If they then left as refugees to U.S. and now come back as investors, it's likely that they invest to the places they know and remember, i.e. the south.
- antoniuschan99 10y agoA lot of the younger generation are going back (those who didn't experience the war) https://www.youtube.com/watch?time_continue=1322&v=YbwJ6F3sIpI https://www.youtube.com/watch?time_continue=1322&v=YbwJ6F3sI...
- davidf18 10y agoThank you and it makes sense. This is a way that economic development (should) work. We are "exporting" entrepreneurs who use the skills and mindset of the US to Vietnam to help with their nascent capitalist market economy. :-)
- narutouzumaki 10y agoHaving been there just last week (and every 4 years or so) the speed with which society and businesses move is breathtaking. In my limited, sub-30-years lifetime, every single time I have visited Vietnam it seemed like visiting a different country. The first time, there were barely any cars in an ocean of scooters and bikes. Hanoi still looked very much Parisian, with its allées and surface canalisation. I also dimly remember, there was a kind of fascination with all things Western. The second time, construction sites were everywhere. Also, what somehow stuck out to my teenage brain was the entrance of something. Its earlier absence only became noticeable when it now appeared: Brands. Franchises. Be it milk or Vespa, or Haprosimex, they arrived. Also, entry of the heavenly air conditioners! The third time, the streets were more congested than ever before. The middle class went to their new middle class supermarkets and demand fueled the availability of foreign goods like sausages and toast. Sill tasted like crap. Mainly because they were the American variety. Local fresh markets were seen by many Vietnamese now as 'poor people's markets' and lacking food safety. To buy any movie or PC game, you just had to walk into one of the myriads of shops and ask for the CDs or DVD(s). if you knew the Vietnamese name, that is. Which 98% of the time, has nothing, absolutely nothing to do with its original name. With the help of my cousin, I managed to buy 'Mighty Defence of Medieval Fortresses' (Stronghold) and 'Battle of the Three Gods' (Age of Mythology) for about 3 fiddy dollars. Then we proceeded to play the shit out of them the whole summer. This time, tourists are now relatively common. Vietnamese children (at least in HCMC and Hanoi) have gotten used to them, meaning they won't look at you like you are an Alien if you are non-Asian looking. But they'll still look at you and be very friendly. KFC, Burger King and Popeyes have arrived. The biggest change however is: EVERY SINGLE PERSON SEEMS TO HAVE A SMARTPHONE. And they do stuff with it. They use the shit out of it. From the 5 year old learning English on Duolingo, the 20 year old lurking Zalo or zing.vn, to the 80 year old granddad snapping pics of his orchids and mango tree - they are ALL on facebook. Thus, EVERYONE is on the internet. Unfortunately this time I didn't travel to the more remote regions, so I do not know about those. But I can imagine the network effects. The craziest thing is, coming from a 'developed' first world country in the EU, I have to say Vietnam, and all its people are so infinitely more dynamic than most of Europe. One might say it is due to the youth of the population with the low median age, but it is more the openness of the old to technology that surprises one. Here, many elders are exceptionally wary of the internet and privacy is hold in high regard (which I think is good!) while in VN everyone readily embraces its possibilities. It's a kind of 'use now, worry/fix later' attitude. Or actually:'use if works, y worry?'. What does this mean for the future of Vietnam, and the region? What does it mean for Europe; stagnating, left behind, or wisefully treading carefully? in the grand schemes of things and the world? I don't know. Apologies to everyone, I didn't plan to bother you with this wall of a text, maybe the recent impressions needed to be processed desperately. So to anyone who made it this far, thanks for reading dem brain spillings, dunno what to think of it. What I do know is though, my highest Flappy bird score was 163, and it was the cause of two exams missed.
- JustUhThought 10y agoTangent. This "middle income" designation seems to have us stuck in the same rut that we were in when using "third world". It didn't initially mean 3rd place, but ended up being understood as such, and thus bestowed undeserved stereotypes. Well, byusing the term middle income we are locking ourselves into a paradigm were we are fighting to keep a middle class and take for granted the lower and upper class. We should instead be approaching the issues in a more nuanced manner, one in which we work so that no one is without their basic human needs being met and income inequality is reduced such that there is no group of 55 people that have as much wealth as the bottom 50% of global population.
- toomanybeersies 10y agoCambodia is in a place where Vietnam was ~30 years ago, it will be interesting to see how it fares over the next 30 years. Their GDP growth has been consistently >5% over recent years (500% in 20 years) except for 2009, and there is a lot of foreign investment coming into the country. It's a pretty amazing place to visit, you can sense the opportunity. Capitalism is doing wonderful things for them, far better than they were under either of the communist regimes.
- notahacker 10y agoI'm not sure where you'd draw the line between the communist and capitalist regimes though, particularly somewhere like Cambodia with its truly remarkable web of allegiances over the last 50 years and Hun Sen in power since 1979...
- fwhitaker 10y agoRequest for clarification, this is at the end of the sixth paragraph: Trade accounts for roughly 150% of national output, more than any other country at its level of per-person GDP. How can something account for more than 100% of output? Should it be 50%, or am I missing an economic term here?
- paulsutter 10y agoIf you import components worth X and export them in assemblies worth Y, the contribution to output is Y-X, whereas the contribution to trade is Y+X. So they must be doing a lot of assembly work. For example, I believe there are no semiconductor fabs.
- nabla9 10y agoGDP is not the same as sales/revenue of a business. GDP measures the value created in economy. GDP can be calculated in different ways but they add up to the same value. GDP is sum of all gross value added and final consumption minus value of intermediate consumption. Alternatively it's the sum of primary incomes distributed by resident producer units. If you manufacture a trinket that is sold for consumer for $100 but it costs $90 to manufacture, only $10 is added to GDP. https://stats.oecd.org/glossary/detail.asp?ID=1163 https://stats.oecd.org/glossary/detail.asp?ID=1163 https://stats.oecd.org/glossary/detail.asp?ID=2113 https://stats.oecd.org/glossary/detail.asp?ID=2113
- latchkey 10y agoI've done a lot of B2B business in Vietnam over the last year, this article does not surprise me. The people there are kind, super smart and very hard working. I'm recently back on the market for a (software engineering) job. If anyone has any leads for a westerner to find work in Vietnam, I'd love to talk to you.
- sangd 10y agoEven though I was born and lived there for almost 20 years and coming back almost every year for the last 10 years, I really don't feel this kind of fast development described in the article. Politics really has big impact on economic development and the country has struggled as much as others within the region. It follows similar pattern like China's and it heavily got influenced by politicians who favor policies leaning toward China. Only cities like Ho Chi Minh and Ha Noi get that much of attention and heavy investments. Other parts of Vietnam is still in very poor condition. However, I really believe that it's a very good place for investment besides all the political mess because its workforce contains young/large/talented people.
- cylinder 10y agoWell it's only logical that the two biggest cities see development first.