Emerging Market: Vietnam
By: Angela Watts
Argosy University
Image retrieved from: http://www.telegraph.co.uk/travel/travelnews/9527517/Vietnam-a-new-favourite-with-British-travellers.html
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Agenda
Nation Overview
About
Brief History
Geography
People and Society
Government
Economy
Military
Analysis of Vietnam
Why Vietnam is considered an EM
Techniques used to classify Vietnam as an EM
3 reasons to invest in Vietnam
About
Full Name: Socialist Republic of Vietnam
Motto: Independence, Freedom, Happiness
National Anthem: Army March
Primary Language: Vietnamese
Capital: Hanoi
Population: 93,421,835
Image retrieved from: http://www.valuewalk.com/2014/04/vietnam-reneges-on-hosting-asian-games-creates-problem/
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History
Founded in 2879 B.C.
Originally known as Nam Viet
Part of French Indochina in 1887-1954
Divided into North & South in 1954
Vietnam War (1959-1975)
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The Vietnam War was between North Vietnam along with its allies known as Viet Cong and South Vietnam and its ally the United States. Two years after the U.S. pulled its forces, Vietnam unified under communist control. (History, 2014)
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Geography
Located in Southeast Asia
Bordered by:
China
Cambodia
Laos
South China Sea along the entire coast
Terrain:
North & South is flat
Far North & Northwest is hilly & mountainous
Image retrieved from: http://tiger.towson.edu/~dnguye11/vietnamese_culture.html
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People & Society
Nationality: Vietnamese
Religion: Buddhist, Catholic, Cao Dai, Protestant, Muslim
Population Growth Rate: 1%
Life Expectancy: 73
Unemployment: 5.5%
Image retrieved from: http://countrystudies.us/vietnam/32.htm
Unemployment rate is based on youth ages 15-24.
The society is working to improve their source of drinking water and sanitation facility access. Currently, 95% percent of the country has an improved source of drinking water and 76% of the country has improved access to sanitation facilities.
(Central Intelligence Agency, 2014, People & Society Section)
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Government
Communist State
Legal System:
Civil Law System
Legislative Branch:
500 Seats
Judicial Branch:
1 Chief Justice
13 Judges
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Members of the legislative branch are elected by popular vote and serve a term of 5 years.
The Chief Justice of the judicial branch is elected by the National Assembly based on the recommendation of the president. The Chief Justice serves a term of 5 years that is renewable. The 13 judges serve a term of 5 years and are appointed by the president.
(Central Intelligence Agency, 2014, Government Section)
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Economy
(FindTheBest, 2014, Econ Section)
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Military
Branches:
People Armed Forces
People’s Army of Vietnam (PAVN)
Fit for Service Ages 16-49
Males: 20,405,847
Females: 21,098,102
Military Expenditures:
2.37% of GDP (2012)
2.17% of GDP (2011)
2.37% of GDP (2010)
Image retrieved from: http://vietbao.vn/Chinh-Tri/Chien-si-quan-khu-9-duyet-binh-duoi-mua/22070227/96/
PAVN includes Vietnam People's Navy, Vietnam People's Air and Air Defense Force, Border Defense Command, Coast Guard
(Central Intelligence Agency, 2014, Military Section)
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Why Vietnam is considered an EM
Rising middle class.
Educated workforce.
Foreign Investment opportunities.
Rapid rate of population growth.
By the end of 2014, “the government also plans to raise foreign ownership limits in many of the country's industries from 49% to 60%. That should help it attract more foreign investment.” (Fraser, 2014, Para 4)
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Techniques used to classify Vietnam as an EM
Growing middle class
Stable economic environment
Foreign direct investment
Image retrieved from http://www.alotrip.com/vietnam-travel-guide/tags/foreign-direct-investment-in-vietnam
As the middle class continues to grow, the demand for consumer goods and services increases. “Vietnam was found to have the fastest growing middle class in Southeast Asia.”(Vietnam Briefing, 2014, para 1) As the income of the middle class increases, more high profile companies will seek to move into the market which will boost the economy.
Vietnams Stock Exchange Index (VNI) continues to increase each month.” The extraordinary level of foreign net inflow has been the key driver, with ETF’s being the main channel.” (Springer, 2014) Vietnams economy is considered to be quite stable in terms of inflation, currency, and political stability.
When the U.S. currency devalued, Vietnams currency remained stable. This led to companies such as Samsung to build and open factories and fast food chains such as McDonald’s and KFC to move farther into the country.
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3 Reasons to invest in Vietnam
Growing middle class.
Currency and political stability.
Low Unemployment.
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The growing middle class means consumer demand will increase.
When the U.S. currency devalued, the Vietnamese currency remained stable.
Low unemployment means there is disposable income to be spent which will boost the economy.
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Question Time
References
Central Intelligence Agency. (2012). The World Factbook. Retrieved from https:// www.cia.gov/library/publications/the-world-factbook/geos/vm.html
FindTheBest. (2014). Vietnam. Retrieved from http:// country-facts.findthebest.com/l/25/Viet-Nam
Fraser, C. (2014). Vietnam: Emerging Markets Standout. Retrieved from http:// www.moneyshow.com/articles.asp?aid=Global-39544
Springer, J. (2014). Vietnam's Market Emerging Again With Vietnam Opportunity Fund's Andy Ho. Retrieved from http://www.forbes.com/sites/jonspringer/2014/02/25/vietnams-market-emerging-again-with-vietnam-opportunity-funds-andy-ho /
Vietnam Briefing. (2014). Vietnam’s Middle Class the Fastest Growing in Southeast Asia. Retrieved from http://www.vietnam-briefing.com/news/vietnams-middle-class-fastest-growing-southeast-asia.html /
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