Straits Times Asia, 17 September 2015. Vietnam gearing up for the Asean market, by Nirmal Ghosh.

Below is an edited extract of the original and unedited article.

…For these vibrant Net-based start-ups (in HCMC), free trade agreements mean little. Their world is already borderless.

For the rest of Vietnam’s wider economy, and its bureaucracy, free trade is more of a challenge. Businesses and the government are scrambling to implement the changes required by the advent on Jan 1, 2016, of the Asean Economic Community (AEC), which aims to create a single market for the 10-nation Asean grouping.

Observers say much of the private sector is not ready for the AEC and many firms have yet to grasp the realities of what the new regional market will mean in terms of opportunities and increased competition…

Vietnam’s economy has grown rapidly since political and economic reforms were launched in 1986, transforming the war-torn country from one of the poorest with per capita income below US$100, to a lower-middle-income country with per capita income of more than US$2,000 (S$2,840). Manufacturing, agriculture and, increasingly, services are major pillars.

It is the seventh-largest economy in Asean. In foreign investment, Vietnam places fifth, drawing US$9 billion in 2013 – just behind Thailand.

Its gross domestic product grew 6.28 per cent in the first half of this year – about twice Thailand’s rate. A study predicts that growth in Vietnam will average 5.3 per cent a year through 2050.

Telephone sets and components are Vietnam’s top exports, hitting US$23.6 billion last year. Next were textiles and garments at US$20.95 billion, followed by electronics, computers and accessories at US$11.4 billion, and footwear at US$10.34 billion.

The largest share of its exports – 19 per cent – goes to the United States, followed by 18 per cent to the European Union.

But as a bloc, Asean is its biggest trade partner, with two-way trade last year standing at US$42.08 billion…

 

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