Vietnam in the early 2000s was a place where your investment could rise as part of the general growth being experienced by the ASEAN markets on the back of the expansion in the Chinese and American economies. That all came to an abrupt end in 2008 with the Western Banking collapse, followed by the accompanying slow down in the Chinese manufacturing and export miracle. Since then making an investment return from the Emerging Markets has not been possible – in fact the opposite has been the case.
I have just been fortunate to spend two weeks in Vietnam with my brother who is a doctor in Saigon (HCMC). It has given me an opportunity to travel around the country and meet the local Vietnamese people and get a feel for their aspirations for the future. I have recorded some of my observations, some of which are tongue in cheek, that I hope will give you an idea as to why I am firmly of the belief that Vietnam is without a doubt a place to make investment returns at sometime in the future.
The population of Vietnam is around 93 million. Of these 56 million live in the countryside as peasant farmers, leaving 37 million in the cities and industrial surrounds with 18 million of these being centred in Saigon and Hanoi. The average wage throughout is around 200 dollars a month with the bulk of the farming community on break even, feeding themselves and selling enough produce to provide for a mobile phone and connection for a television. Everybody has a phone. The average age of the population is around 28 years old. So the message that I get from all of this is that they are young and they can see, and want, what the West enjoys and they will work to achieve this end. There are also plenty of youngsters in the countryside who in the future will move to the cities as the opportunity presents itself.
This is the land of the scooter and not the car. The dark windowed, chauffeur driven limousines are the predominant cars (apart from the taxis) and they belong to the State officials and Industrial Chiefs. The tax on a new car is twice the value in the first year and thereafter it is its value paid in tax each year. This is extortionate so the population moves on scooters. They will carry anywhere between one and four, occasionally five people. Saigon has 40,000 scooters and operates like an ants nest that has been given a good poke with a stick. They do have traffic laws but they are only followed by some and not all the time. However the traffic chaos still moves steadily and I have only seen one minor bump. The horn blowing is to say “I am here, not get out of my way”. There appear to be as many women drivers as men and this equality also applies to the jobs. As a pedestrian, crossing the roads is a matter of trust, you just head out and the scooters just part around you like a river around a bridge support. The message that I get from all of this is that these people are not aggressive and will work together to achieve the end result.
We visited Hoi An, a tourist centre one day after a typhoon had been through killing seventeen people and causing major damage and flooding. It was a case of “all hands to the pumps” and the next day it was almost back to business as usual. Our guide took this to be perfectly normal. He told us that in 2003 they had the problem of bird flue when the West instructed tourists to stay away from Vietnam. So for the best part of a year they had to live on their savings until the tourists returned. Its astonishing, how do they save with such a low income, but they do. They have to, there are no government handouts and no education and healthcare unless you pay for it yourself. These people are self-sufficient.
This may be a very superficial look at the country but this is my conclusion. When the West and China economies pick up again, then you will see the major projects start up again in Vietnam and the manufacturing industries will move back up a gear. This is a young race of “Can do” people who want a twenty first century style of living. They are not held back by Health and Safety regulations and they are prepared to provide and work together to achieve this end. I am certain that in the not so distant future this will again be a place for your investment money.