Rastus Pre Trip Presentation

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    Notes on slide 1

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHdO55H1TfiE

    2003-2006: Increasing at a decreasing rate, but at least still increasing2007: Drop slightly2008: Rise from 2007As you can see, its GDP growth rate has been brisk and high, one of the highest in the region. People have even compared it to the Asian Tigers of the 1990s, and also alongside China and India. Its entry into the WTO, has also signaled Vietnam’s commitment to a capitalist-based economy; thus making it more integrated into the global market and economically liberal, even though it still has communist elements in its government.

    As you can see from the charts, from 2003-2007, Vietnam’s imports and exports have mostly been consistent. With regards to its exports, it has been exporting mostly agricultural and labour-intensive products; things like Cashew, black pepper, coffee and Textiles and garments, Electronics and PC. This is in line with its developing country status, while it was predominantly an agricultural country, its population of around 87 million people, and most of them being from the ages of 15-64 years of age makes it an attractive choice to companies around the world who need cheap labour.Its main imports are also in line with it being a developing country- it imports mostly items that would help to boost its infrastructure, things like Machinery and spare parts, petroleum. However it still shows that agriculture is still vital to its economy through fertiliser being one of its main imports.

    Despite the seemingly glowering praise of Vietnam as an up and rising economy, it hit a rather huge bump at 2008. In 2008, inflation sky-rocketed to around 25%, far outstripping the 8.5% GDP growth. This meant that even workers at a Nike factory who got a 10% increase in wages still would struggle to meet basic necessities. This has also resulted in strikes, something quite unusual in a communist country.To add on to Vietnam’s problems as you can see from the charts that the Dong has been weakening against the USD. This has made it difficult for them to import; items like machinery and fertiliser which the country would need in order to aid in its development would be more expensive, although its exports would be cheaper to buy and might increase demand.

    Risks of corruption: Private providers should be particularly aware of continuing corruption related to public procurement and contracting procedures.Several sources indicate that land management constitutes the most corrupt sector in Vietnam. Policies and laws on land are incoherent and have many loopholes, while supervision and enforcement of the law within land administration is fairly lax and paves the way for corruption.

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    Rastus Pre Trip Presentation - Presentation Transcript

    1. The Vietnam Economy The Council
      rasmus – lester – brian – shawn – darren – rastus
    2. Road map
      Vietnam’s economy:
      In the Past (Before 1999)
      Transition of Economic Activity
      Present Economy
      Current concerns
    3. History in short
      1954-1975
      French developed the area by segments
      South involved in irrigation and agriculture
      North is reserved for manufacturing
      Resulted in ideological differences and the civil war
      Unemployment & Lack of food
    4. History in short
      1976-1986
      A series of plans were created to centralizing the economy
      Growth figures for industrial and agricultural sectors and national income
      Plans were extremely unrealistic
      Not enough resources : Technological shortfalls,too much small-scaled business
    5. History in short
      1986-1990s
      Free-market reforms known as Đổi Mới (renovation)
      Transition from a command economy to a Socialist-oriented market economy.
      Deregulation of laws
      Foreign investment grew
    6. ĐổiMới
      1. Payment of wage and salaries on a straight cash basis
      2. Pricing of inputs to state enterprises on the basis of costs
      3. Permission for private employers to employ up to ten workers
      4. Abolition of internal customs check points
      5. A revised Foreign Investment Law
      6. Virtual decollectivization of agriculture
      7. Elimination of virtually all direct subsidies and price controls
      8. Increased autonomy for enterprise managers
      9. Devaluation of the currency (dong) to market rates
      10. Elimination of the State's monopoly in foreign trade
      11. Provision for foreign participation in banking
      12. Reduced restrictions on private enterprise
      13. Creation of export processing zones for 100% foreign-owned enterprises
      14. Legislation on shareholding corporations
      15. Dismantling of major elements of central planning and bureaucracy
      16. A 15% reduction in the government workforce
      17. A return to former owners or their heirs of businesses in the South that were nationalized in 1975.
    7. Under Đổi Mới
      Industries Sector
      Private businesses and foreign investments thrived
      More liberal operations
      30,000 private businesses created,
      Economy grew at an annual rateof more than 8%
      Poverty was nearly halved.
    8. UnderĐổiMới
      Agricultural Sector
      Scrapped agricultural collectives
      Removed price controls
      Enabled farmers to sell their goods in the marketplace
      Rapid growth in agricultural and industrial production
    9. The Past
      Average growth 8%
      Level of exports and imports
    10. The Past
      Per capita income  $220 (1994)
      Poverty reduction :
    11. Transition of Economy activity
      State Bank of Vietnam
    12. Transition of Economy activity
      Does this mean that Vietnam is a agriculture heavy country?
      Where is the country shifting its’ focus to?
    13. Does this mean that Vietnam is a Agriculture heavy country??
    15. Transition of Economy activity
      Where is Vietnam shifting its’ focus to?
      Employed population as of annual 1 July by kind of economic activity
    16. Transition of Economy activity
      Agriculture and Forestry: A decrease of 13%
      Others: An increaseof 12%
    17. TheOthers
    18. Present Economy.
    19. GDP
    20. GDP Growth
      http://www.indexmundi.com/vietnam/gdp_real_growth_rate.html
    21. GDP Growth
    22. Export and Import Figures 2003
    23. Export and Import Figures2005
      Export and Import Figures 2005
    24. Export and Import Figures2006
      Export and Import Figures 2006
    25. Export and Import Figures2007
      Export and Import Figures 2007
    26. Currency
    27. Monthly Average income
    28. Prospering economy
    29. Current Concerns
      Inflation
      Poor Infrastructure
      Power Shortage
      Corruption
    30. Current Concerns
    31. Current Concerns - Inflation
      High inflation of 25%
      Increased cost of production
      Affects Investors
    32. Current Concerns – Poor Infrastructure
    33. Current Concerns – Poor Infrastructure
      World Bank agreed to loan US$190 million to Vietnam
      For infrastructure development (for public and private sectors)
    34. Current Concerns – Poor Infrastructure
    35. Current Concerns – Power Shortage
      In MayVietnam faces power shortage (because of drought)
      Power obtained from hydroelectric power plants.
      NO WATER, NO POWER!
    36. Current Concerns – Power Shortage
      In August
      Electricity of Viet Nam (EVN) reports that country is facing a severe power shortage of 1,400 MW.
      EVN imported approx. 2.2 billion kWh of electricity from china. (In first 7mths)
      Plans to increase supply sources and retain water.
    37. Current Concerns - Corruption
      Corruption Perception Index (CPI)
    38. Current Concerns - Corruption
    39. Current Concerns - Corruption
      Risks of Corruption
      Sources indicates land management to be most corrupt sector in Vietnam. Policies and laws on land have many loopholes
      Encourage corruption
      Investors should take care during contracting procedures
    40. Current Concerns - Corruption
      Positive Developments – related to Corruption
      Corruption is now a priority on the political agenda
      Vietnam has abolish almost 200 ‘unnecessary’ permits (for operating a business)
      Companies special relationship with authorities have declined
    41. Conclusion
    42. Citation
      http://www.economywatch.com/world_economy/vietnam/export-import.html
      http://www.learnnc.org/lp/media/collections/freeman/vietnam/600/vietnam_017.jpg
      http://www.latticeworld.org/oldsite/Images/Vietnam%20Flag.jpg
      http://www.terragalleria.com/images/black-white/vietnam/viet7897-bw.jpeg
      http://culinarytherapy.files.wordpress.com/2008/01/blurred-action-and-rush-of-hanoi-city-streets-vietnam-photographic-print-c12917781.jpeg
      http://www.vietpartners.com/statistic-fdi.htm
      http://www.business-anti-corruption.com/country-profiles/east-asia-the-pacific/vietnam/snapshot/
      http://english.vietnamnet.vn/politics/2007/09/745693/
      http://www.youtube.com/watch?v=qv5vjR6eXDo
      http://www.time.com/time/world/article/0,8599,1881227,00.htmlhttp://74.125.153.132/search?q=cache:gAUgtoxmep0J:www.freshfields.com/publications/pdfs/2007/july23/19219.pdf+vietnam+poor+infrastructure&cd=10&hl=en&ct=clnk&gl=sg&client=firefox-a
      http://www.vietnam-briefing.com/news/vietnam-borrows-us190-million-infrastructure-development.html/
      http://www.encyclopedia.com/doc/1G1-157748505.html
      http://vietnamnews.vnagency.com.vn/showarticle.php?num=01IND110809
      http://www.thanhniennews.com/society/?catid=3&newsid=6364

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