Introduction to ECONOMIC PROSPECTIVE of VIETNAM

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Introduction toECONOMIC PROSPECTIVEof VIETNAM

• Presented by Cao Hao Thi.

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Outline

• Vietnam overview
• Political situation
• Economic situation
• Summary and conclusions
• QA

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Viet Nam overview

• Abundant endowment
• Rich agricultural land
• Minerals and petroleum
• GDP 44 billion, growth rate 8.4 (2005)
• Agriculture 20.9
• Industry 41.0
• Service 38.1
• GDP per capita 2800 (2005)
• Population
• Almost 84 million
• Half under 25
• Growth rate 1.02

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Viet Nam overview

• Labor
• Labor force 44.39 million (2005)
• Agriculture 20.9
• Industry 41.0
• Service 38.1
• Unemployment rate 5.5
• Large and well educated
• Inexpensive
• Problems
• Managerial and English skills
• Tax

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Viet Nam overview

• Geography
• North (Ha Noi)
• Central (Da Nang)
• South (Ho Chi Minh)
• Area 329,247 sq km
• Administrative divisions
• 59 provinces
• 5 municipalities (Ha Noi, Hai Phong, Da Nang, Ho
  Chi Minh and Can Tho)

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Political situation
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Political structure

• Official name
• Socialist Republic of Vietnam (SRV)
• Form of state
• One party rule
• The executive
• The cabinet
• Head of state
• The president

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Political structure (contd)

• National legislature
• National Assembly
• Local government
• 59 Provinces/ 5 municipalities
• National government

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Political structure (contd)

• Main political organizations
• The Communist Party
• The Fatherland Front

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Political structure (contd)

• Main members of the cabinet
• Prime minister (1)
• Deputy prime ministers (3)
• Key ministers (18)
• Execute policies and directions set by the Party

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Political issues

• Balance
• Economic growth
• Equality
• Political stability
• Role of private sector
• Engage in private business (2002)

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Vietnams economy

• Economic structure
• Vietnams economy
• Investment climate
• Economic issues

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Economic structure

• Multi-component economy
• Entire people (state owned)
• Collectives (cooperatives)
• Private individuals
• Market mechanisms
• Under the management of the State
• A socialist orientation

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Economic structure

• Agriculture
• Industry
• Services

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Economic structure

• Agriculture and forestry (2005)
• 70 labor force
• 21 GDP robust growth (4.4)
• Industrial crops
• Coffee
• Rubber
• Sugarcane
• Rice

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Economic structure

• Industrial sector
• Growth 14.4 annually
• 41 GDP
• Private sector grew fastest
• Service and investment sector
• 38 GDP
• Fast growth
• ? Develop financial service

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Vietnam economy

• Market-based economy with socialist orientation
  under state management
• Macroeconomic indicators improved
• More to do
• Benchmark the countrys progress
• WTO ? member in 2006 ?

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Vietnam economy

• Challenges
• Increase investment
• Foreign investment (capital, skills, technology
  and market)
• Prepare for the integration (region and world)
• Legal and administrative reform

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Investment

• Domestic Investment
• Large stock of domestic savings
• New enterprise law (Jan 2000)
• Challenges
• Land
• Credit

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Investment Climate

• Openness to foreign investment
• Targets FDI and ODA
• Some issues
• Investment environment
• State-supervised market economy
• Shortcomings

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Investment Climate

• Shortcomings
• Infrastructure
• Legal and financial systems
• Shortage of trained personnel.
• Issuance of investment licenses and
  implementation of projects
• Changes in 1996 Foreign Investment Law (effect
  July 2000)

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Economic issues

• Uneven improvement in business environment
• Discrimination between Private and State sectors
• Monopoly sectors (Telecom, etc.)
• Transparency and consistency

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Summary and conclusion

• Young and growing country
• Potential market
• Cheap labor
• Government efforts
• Improved economic indicators
• Challenges and more to do

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