Vietnam - Economic Growth Speeds Up

We recently reported on the possibility that VietJet, based in Hanoi, Vietnam, and one of South East Asia’s fastest growing airlines, was seriously looking at setting up their own freighter arm to better serve markets into and out of Vietnam. The country does not (yet) seem too worried about any possible repercussions it might face if the Trans Pacific Partnership (TPP) were to be scratched by the U.S. Trump administration.

Gross Domestic Product (GDP) ranking table based on Purchasing Power Parity (PPP)  -  source: Price Waterhouse
Gross Domestic Product (GDP) ranking table based on Purchasing Power Parity (PPP) - source: Price Waterhouse

Moving forward - is the name of the game
Vietnam joined the TPP in 2008 with eleven other members and it seems that the sky was the limit as investment in light industry and the electronics sector moved ahead rapidly.
No wonder - considering that Vietnam is still high in the league as a production area which has very low wages and hence lower production costs.
The other side of the coin is that exports from Vietnam are heavily dependent on consumer buying in the United States, and the initial worry was that this could be adversely affected if the TPP was outlawed by America.

The Vietnamese have always been a flexible nation which has shaken off colonial occupation by France and the U.S. and has since the end of the last Vietnam War positioned itself as an economic force within the region.

Opening up new market opportunities - is Vietnam’s answer
Maybe in the long run it will be of more benefit to Vietnam if they were to do away with their past reliance on America.
This thinking seems to be going through the minds of the economic leaders in the country as they strengthen ties with Europe and possibly look at this area as their main future market.
Vietnam has no problem with the EU free-trade agreement which is planned to kick-in next year.
On the contrary, they see this as a means of increased foreign investment in their own country and a means to increase jobs throughout.

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China also plays a positive future role for the Vietnamese economy as the Chinese society becomes more affluent and interest in purchasing Vietnam produced goods picks up.
The main commodity produced in Vietnam are garments followed by a thriving electronics industry which as far as quality is concerned, can keep pace with other production areas.

Air cargo needs a re-look
The more and faster you grow - the more flexible and innovative you have to be.
This already applies to the main airports of Hanoi and Ho Chi Minh, which are fast becoming overloaded with both cargo and passengers and need new facilities.
Some think that it may well be of more advantage for Vietnam if one or two air cargo hubs were to be built outside of the above two mentioned cities, possibly with own runways for speedy and effective operations.
A long way to go before that can become reality.

Vietnam is presently at a crossroad, where they need to know which region they can put their cards on and make fast decisions on future transport infrastructure.

When one considers what they have achieved so far, then there can be no doubt that this country will strive to come out on top in Southeast Asia. 

John Mc Donagh

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