Vietnam — Economy, People, Tourism & Remittance
Just finished my visit to Vietnam and thought it might be a good idea to write about the Vietnamese Economy, its People, Tourism and the Remittance market.
The Economy
img courtesy : http://www.vietnamcredit.com.vn
Being the 3rd largest country by population (96.5 million people), with GDP of $223 billion (nominal GDP) & $774 billion (by PPP), it is ranked at the 35th largest economy by PPP method and its GDP has shown consistent growth over the past few years, with over 6% growth in 2017. As per PwC projections, Vietnam is tipped to become the 20th largest economy by 2050.
A socialist oriented market economy, Vietnam seems to have found the right mix of market economy orientation with a focus on socialist reforms with just the right intervention of the centre (both indicative and directive) to create and ensure the right distribution of wealth. With control over the Banking System, State Owned Power and Supply Systems and FDIs, Vietnam continues to take a cautious but market led move towards becoming a high growth economy.
Starting as an agricultural economy vastly dependent on its agriculture produce, today Vietnam has diversified into manufacturing and construction (28%GDP), mining (10%GDP), Services sector (30%GDP), the contribution of agriculture to GDP has reduced to 20% today. There is a sure rising of the SME sector which is tipped to transform into a mid and large manufacturing hub. Vietnam has already captured a lot of FDI and Investment in manufacturing by MNC like Perfetti, Nestle and Unilever in FMCG, Samsung, Intel and LG in electronics and it is tipped to increase in the coming years which will give a further boost to the Vietnamese economy.
With a lot of low level, non automated manufacturing moving to Vietnam from China, there is a growing interest of MNCs especially FMCG and Electronics to consider Vietnam as a manufacturing hub due to its highly skilled low cost labor force, Vietnam is going to be one of the key economies to watch out for in the next few years
The People
img courtesy — BTIC
The Vietnamese people are very hard working, diligent people. No wonder they survived and defeated America in the war. But being war ravaged for so long, facing trade embargo over decades, world isolation and extermination of natural resources during the war, the Vietnamese people have really done well to recreate and redevelop a nation to reckon with and achieve a near average growth rate of above 6% over the last 2 decades.
With a youth population of 40% and another 45% between the age of 25–54 yrs, Vietnam is a very young country with a very low elderly dependency ratio of 9.6 and a median age of 30.5 yrs. With over 35% population urbanised, Vietnam has not seen major growth in migration from rural to urban, but it still continues to be a high emigration market with a growing no of Vietnamese joining the global workforce outside their country especially in the ASEAN belt and the US.
Religion is primarily Vietnamese Religion ( a mix of Buddhism, Confucianism and Taoism ) with Viet(85%) as the ethnic group constituting majority of the population.
Language is Vietnamese with English slowly developing as the 2nd language, with a little bit of French and Chinese spoken in some areas. Even though English is being increasingly used, but the population largely speaks and understands Vietnamese and therefore it is very important to market in their language.
more info on Vietnam demographics here:
https://www.indexmundi.com/vietnam/demographics_profile.html
Tourism
With the growth in the services sector which now contributes almost 30% to the GDP, Vietnam is now seeing a phenomenal growth in tourism over the last couple of decades and the tourism sectors contribution to GDP has increased to over 9% in 2017.
With over 31 national parks, 7 world heritage sites, 8 zones that are marked as bio-sphere zones, 21 national tourist areas and continual rating as being the top 10 tourist destinations in Asia, Vietnam is a top shot tourist destination. Also a great place to visit for military tourism, with museums and locations dedicated to the First and Second IndoChina wars. Vietnam is tipped to continue to see a massive increase in tourist arrivals with Chinese, Japanese and South Koreans leading the flow. If this trend continues, which most likely will, Vietnam is tipped to reach $35 billion in terms of its tourism revenue.
Remittance
Vietnam is one of the top 10 remittance receiving countries in the world with a total proceeds of $13billion received in remittance.
US is the top most contributor (over $7 billion) in terms of sending countries, followed by Australia, Canada, Germany & France, while over $1billion comes in as remittance from fellow SEA countries namely South Korea, Japan, China, Cambodia, Malaysia and Thailand (in that order).
Remittance to Vietnam is expected to grow at the rate of 5% per annum or more, as more and more people find jobs within SEA region and outside, as the skilled migration increases and as the money earned by existing migrants finds its way back into the developing and growing economy of Vietnam
Image and data courtesy — dalla (www.godalla.com)
So pack your bags and take a trip to Vietnam for leisure or for business. It is a country to be in or to visit for sure !!
