Vietnam: A Rising Economic Star
I bought an assemble-it-yourself table last week to put beside the couch in our living room. It was well made and easy to assemble. To my surprise, the origin of this table was Vietnam as shown on the table’s shipping box above.
I have thought for some time that Vietnam is going to be the next China on the world stage. I went to college in the late 70s with many people from Vietnam, and have worked with many since, and I know that they are smart and diligent people. Yes, I may only have known some of the more capable people with origins in Vietnam, but still, I strongly believe that the Vietnamese people as a whole will excel in a free market environment.
Our government knows this too. Donald Rumsfeld is visiting this week. En route to Hanoi he said:
“They’ve got a very good growth rate. They have a sizable population and they’re industrious. And I think it would be a good thing to be in the WTO,” he said.
All that has to happen is for the government of Vietnam to lift the lid some on economic oppression. And this has already begun. Vietnam has turned around and is now achieving world class GDP growth rates, estimated at 8.4% in 2005.
With a large population (over 80 million), Vietnam will gradually become an important country in the world economy. The leaders of Vietnam, even if they are still old-fashioned commie dictator types, are wise enough to see that the China model works. They also see themselves as competitors to China (recall they even fought a brief war in 1979). The rulers of Vietnam aren’t going to just let the country wallow in communist economic stagnation, as they did for years before finally seeing the light of the free-market. They have had to abandon much of the socialist doctrine and turn the innate talents of their people loose. (But of course they will never admit to doing so. )
What is behind this seemingly inevitable rise of Vietnam? I see it as two things. First, they, like the Chinese, have a natural talent for business. They are extremely practical and just have a certain savvy about how to make money. So part of their success will be due to culture.
The second reason, perhaps even more important, is that the average IQ in Vietnam is high. At 96, it is about the same as the US (the US is at 98). But Vietnam is still a very poor country with only $2800 GDP per capita. (Compare this to Mexico, which is at $9800 and is still considered poor.) Imagine once better nutrition, an improved school system, and a less rural culture become the norm in Vietnam.
Unless government economic policies are truly atrocious (like communism was there for many years), there will be no holding back the people of Vietnam.
I have really liked the Vietnamese-Americans that I have known. I have felt an affinity towards them. So to the people of Vietnam - I can only wish them the best of luck.
June 5th, 2006 at 8:40 pm
I have to agree. Consider where both Vietnam and China would be today if they had not had 30 or so years of being utterly driven into the ground by atrocious economic and political policies, and one realises the utter hollowness of any claim by the Left to the moral high ground. Communism and its close cousin socialism have done more to ruin lives than all the “greedy capitalists” in the world combined.
June 7th, 2006 at 6:55 am
Vietnam’s fortunes may be even greater than china’s, per capita. China’s coastline has become thoroughly developed with exporting industries simply because it is expensive to manufacture and transport in it’s deep interior. Vietnam, however, has no interior so any factory a company wishes to build will produce goods just a short drive away from the coast.
July 15th, 2006 at 2:20 pm
[...] I posted recently about an economically resurgent Vietnam. Vietnam is now about to join the WTO, another major step forward: WTO membership will open new markets abroad, but it also will commit Vietnam to reduce protections for its own companies. “The impact on us will be very heavy,” said Doan Duy Khuong, vice president of the WTO membership will open new markets abroad, but it also will commit Vietnam to reduce protections for its own companies. “The impact on us will be very heavy,” said Doan Duy Khuong, vice president of the Vietnam Chamber of Commerce and Industry. “To be stronger, we have to learn how to compete.” [...]