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Factors leading to increased Factors leading to increased Trade and Investment Impacts Trade and Investment Impacts
on Vietnam Economyon Vietnam Economy
Dr. Le Dr. Le AnhAnh SonSonDevelopment Strategy InstituteDevelopment Strategy Institute
Main ContentMain Content
Vietnam in APECVietnam in APECFactors leading to increased Trade and Factors leading to increased Trade and InvestmentInvestmentImpacts of Integration and Liberalization Impacts of Integration and Liberalization on Vietnam Economyon Vietnam Economy
Vietnam in APECVietnam in APEC
Some SocioSome Socio--Economic Indicators of 21 Economies Economic Indicators of 21 Economies in APEC (2005)in APEC (2005)
31,62531,625202020207.57.534.434.464064083.883.8VietnamVietnam904,383904,38399433994332.62.640.840.842,10142,101296.4296.4United State of AmericaUnited State of America
110,110110,110368736875.45.442.042.02,5772,57765.565.5ThailandThailand
NANA16251625NANANANA15,12015,12022.622.6Chinese TaipeiChinese Taipei
229,469229,46920083200834.24.242.542.526,83526,8354.34.3SingaporeSingapore
243,569243,56914600146006.26.239.939.95,3695,369143.4143.4The Russian FederationThe Russian Federation
41,25541,255113211324.74.744.544.51,1591,15987.987.9PhilippinesPhilippines
17,20617,206257925794.34.352.052.02,8122,81227.927.9PeruPeru
1,6881,68832321.61.650.950.96666665.95.9Papua New GuineaPapua New Guinea
21,72921,729160316033.73.736.236.226,44126,4414.14.1New ZealandNew Zealand
213,711213,71118055180551.91.946.146.17,2987,298106.2106.2MexicoMexico
140,949140,949396739674.84.849.249.25,0405,04025.925.9MalaysiaMalaysia
284,419284,419719871984.64.631.631.618,32018,32048.548.5The Republic of KoreaThe Republic of Korea
594,905594,905277527751.41.424.924.935,78735,787127.5127.5JapanJapan
86,22686,226526052604.74.734.334.31,2591,259242242IndonesiaIndonesia
292,119292,11935897358974.34.343.443.425,44425,4446.96.9Hong KongHong Kong
761,954761,95472406724069.69.646.946.91,7031,7031,307.41,307.4The P R of ChinaThe P R of China
40,57440,574666766674.34.354.954.97,2147,21415.515.5ChileChile
359,399359,39933822338222.52.532.632.634,27334,27332.232.2CanadaCanada
6,3696,369NANANANANANA15,76415,7640.40.4Brunei DarussalamBrunei Darussalam
105,825105,82540946409463.23.235.235.234,71434,71420.320.3AustraliaAustralia
Export Export (Mill. USD)(Mill. USD)
FDI FDI inflowinflow
GDP gGDP growth rowth rate (%)rate (%)
GINI GINI IndexIndex
GDP per GDP per capitacapita (USD)(USD)
Population Population (mill)(mill)
Vietnam in APECVietnam in APEC
Relations between GDP per capita growth and GINI Relations between GDP per capita growth and GINI index in APEC economiesindex in APEC economies
Brief Summary of Development HistoryBrief Summary of Development History
Total area: 329,314 km2Total area: 329,314 km2In 1990In 1990
Population: 66 Mil.Population: 66 Mil.GDP per capita: US$ 124 GDP per capita: US$ 124 Export: US$ 2.4 Bill.Export: US$ 2.4 Bill.Domestic saving: 2.9%GDPDomestic saving: 2.9%GDP
In 2006In 2006Population: 84.2 Mil.Population: 84.2 Mil.GDP per capita: US$ 724GDP per capita: US$ 724Export: US$ 39.6 Bill.Export: US$ 39.6 Bill.Domestic saving: 31%GDPDomestic saving: 31%GDP
Factors leading to increased Trade and InvestmentFactors leading to increased Trade and InvestmentInvestment capital in 1995Investment capital in 1995--2006 period2006 period
41.041.040.940.940.740.739.039.037.437.435.435.434.334.331.631.6Inv./GDP (%)Inv./GDP (%)
63.30063.30051.10251.10241.34241.34238.30038.30034.79534.79530.01130.01127.17227.17222.00022.000FDIFDI
398.900398.900343.135343.135290.927290.927239.246239.246200.145200.145170.496170.496151.183151.18372.44772.447InvestmentInvestment
2006200620052005200420042003200320022002200120012000200019951995
Unit: 1,000 bill VND
Source: Statistical Yearbook of Vietnam 2006
Factors leading to increased Trade and InvestmentFactors leading to increased Trade and InvestmentExport Export -- Import turnover, 1995Import turnover, 1995--2006 period2006 period
73736969666659595757555555553333Ex./GDP (%)Ex./GDP (%)
77777474737368686262575757574242Imp./GDP (%)Imp./GDP (%)
747.840747.840617.157617.157524.216524.216415.023415.023331.946331.946273.828273.828253.927253.92795.92595.925ImportImport
715.369715.369582.069582.069470.216470.216363.735363.735304.262304.262262.846262.846243.049243.04975.16075.160ExportExport
2006200620052005200420042003200320022002200120012000200019951995
Unit: 1,000 bill VND
Source: Statistical Yearbook of Vietnam 2006
Factors leading to increased Trade and InvestmentFactors leading to increased Trade and Investment
-- VietnamVietnam’’s s ““open dooropen door”” policy, which has been translated into policy, which has been translated into cooperative relations in development investment and exportcooperative relations in development investment and export--oriented economic policies.oriented economic policies.
-- VietnamVietnam’’s legal framework has been improved to create favorable s legal framework has been improved to create favorable investment and business environment for both domestic and foreiginvestment and business environment for both domestic and foreign n enterprises.enterprises.
-- VietnamVietnam’’s socios socio--economic infrastructure has been gradually improved. economic infrastructure has been gradually improved. The systems of roads, railways, air ports, sea ports, post and The systems of roads, railways, air ports, sea ports, post and telecommunication services, banking servicestelecommunication services, banking services…… have been have been developed and upgraded.developed and upgraded. VietnamVietnam’’s seaports that are out gates of s seaports that are out gates of EastEast--West Economic Corridors have been upgraded in the GMS West Economic Corridors have been upgraded in the GMS cooperation framework. Development of industrial and exportcooperation framework. Development of industrial and export--processing zones has been paid much attention to provide good processing zones has been paid much attention to provide good infrastructural environment for investors. Up to March of 2007. infrastructural environment for investors. Up to March of 2007. There have been 145 industrial and exportThere have been 145 industrial and export--processing zones, with processing zones, with the total area of 30926 hectares; these zones have attracted 509the total area of 30926 hectares; these zones have attracted 5098 8 projects, with the total capital of USD 22.789 Bill and VND 1356projects, with the total capital of USD 22.789 Bill and VND 135670 70 Bill. VietnamBill. Vietnam’’s Government has decided to build 11 industrial parks s Government has decided to build 11 industrial parks in provinces being in difficulties of infrastructure with a viewin provinces being in difficulties of infrastructure with a view to to helping these provinces attract domestic and foreign investors.helping these provinces attract domestic and foreign investors.
Factors leading to increased Trade and InvestmentFactors leading to increased Trade and Investment
-- Vietnam has young population and abundant human resource. Vietnam has young population and abundant human resource. The policy on socialization of training activities has facilitatThe policy on socialization of training activities has facilitated ed development of training schools in areas where concentrated development of training schools in areas where concentrated many industrial parks. Some Korean and Singaporean many industrial parks. Some Korean and Singaporean training schools in Vietnam have provided trained labor for training schools in Vietnam have provided trained labor for foreignforeign--invested enterprises and for export.invested enterprises and for export.
-- Vietnam is relatively rich in some natural resources. Its Vietnam is relatively rich in some natural resources. Its tourism resources are also abundant, the tourism tourism resources are also abundant, the tourism infrastructure has improved. With seven sites being infrastructure has improved. With seven sites being recognized by UNESCO as the world heritages, Vietnam has recognized by UNESCO as the world heritages, Vietnam has become a destination of many international tours.become a destination of many international tours.
-- Vietnam is a populated country (over 84 million people); Vietnam is a populated country (over 84 million people); moreover, in the domestic market, the number of people with moreover, in the domestic market, the number of people with middle income has been on the increase. All this is an middle income has been on the increase. All this is an attractive factor for foreign investors. attractive factor for foreign investors.
Impacts of Integration and Liberalization on Impacts of Integration and Liberalization on Vietnam EconomyVietnam Economy
8.248.248.218.216.956.956.366.367.047.046.366.36PrivatePrivate
13.9913.9913.2213.2211.5111.5110.5210.527.167.167.217.21FDIFDI
6.366.367.367.367.757.757.657.657.117.117.447.44PublicPublic
8.178.178.438.437.797.797.347.347.087.086.896.89GDPGDP
200620062005200520042004200320032002200220012001
Source: Statistical Yearbook of Vietnam 2006
GDP growth rate, 2000GDP growth rate, 2000--2006 period (%)2006 period (%)
Impacts of Integration and Liberalization on Impacts of Integration and Liberalization on Vietnam EconomyVietnam Economy
22.122.115.015.026.626.627.927.921.821.83.73.7ImportImport22.722.722.522.531.431.420.620.611.211.23.83.8ExportExport
8.178.178.438.437.797.797.347.347.087.086.896.89GDPGDP
200620062005200520042004200320032002200220012001
Source: Statistical Yearbook of Vietnam 2006
Export growth and GDP growth (%)Export growth and GDP growth (%)
Impacts of Integration and Liberalization on Impacts of Integration and Liberalization on Vietnam EconomyVietnam Economy
57.857.857.257.254.754.750.450.447.147.145.245.2FDIFDI42.242.242.842.845.345.349.649.652.952.954.854.8DomesticDomestic
100100100100100100100100100100100100ExportExport
200620062005200520042004200320032002200220012001
Structure of Export turnover by domesticStructure of Export turnover by domestic--invested and invested and foreignforeign--invested sectors (%)invested sectors (%)
GDP per capita, 1990GDP per capita, 1990--2006 period2006 period
FDI distribution and GDP per capitaFDI distribution and GDP per capita
Gaps in regional levels of GDP per capita: the ratio of the highGaps in regional levels of GDP per capita: the ratio of the highest to est to the lowest is 4.8 times. These gaps have had the widening trend.the lowest is 4.8 times. These gaps have had the widening trend.Most of industrial zones are concentrated in Northeast South Most of industrial zones are concentrated in Northeast South (42%) and Red River Delta regions (20%); This reality leads to t(42%) and Red River Delta regions (20%); This reality leads to the he fact that air and water pollution levels in many localities of tfact that air and water pollution levels in many localities of these hese two regions have exceeded the permitted norm. two regions have exceeded the permitted norm. The reality of VietnamThe reality of Vietnam’’s renovation process demonstrated that, s renovation process demonstrated that, through the policies of international integration and liberalizathrough the policies of international integration and liberalization tion of trade and investment, the country has gained the remarkable of trade and investment, the country has gained the remarkable economic achievements, the peopleeconomic achievements, the people’’s living standards have much s living standards have much improved. A lot of success in social development and ecological improved. A lot of success in social development and ecological environment protection has also been recognized. However, in theenvironment protection has also been recognized. However, in theforthcoming development time, Vietnam will confront with forthcoming development time, Vietnam will confront with challenges, especially the conflict between high economic growthchallenges, especially the conflict between high economic growthdemand and sustainable development demand. To overcome this demand and sustainable development demand. To overcome this challenge, more than ever, Vietnam has to bring its internal forchallenge, more than ever, Vietnam has to bring its internal force ce into play and strive for achieving the millennium goals; on the into play and strive for achieving the millennium goals; on the other hand, Vietnam has to cooperate with other APEC economies other hand, Vietnam has to cooperate with other APEC economies in economic development, social stabilization and ecological in economic development, social stabilization and ecological environment protection. Sustainable development experiences of environment protection. Sustainable development experiences of economies in APEC Community will be precious lessons for Vietnameconomies in APEC Community will be precious lessons for Vietnamin the coming up periods.in the coming up periods.
Thanks for your attentionThanks for your attention