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Business Profile
Economy: The economy of Vietnam was devastated by 30 years of war up to 1975, after which policy errors and a trade boycott enforced by the USA combined to stifle development. Since the end of the boycott in 1994, and the introduction of liberalising and deregulating measures by the Government, the Vietnamese economy underwent significant growth of around eight to nine per cent annually. However, the 1997 Asian financial crisis put a brake on the economy and annual growth has since been cut back to just over five per cent.
Agriculture remains the principal employer in Vietnam and produces 25 per cent of total output. Rice, of which Vietnam is the world’s second-largest exporter, is the staple crop. Other cash crops include sugar cane, coffee, rubber, tea, cotton and groundnuts. Timber was once exploited on a large scale but the industry was cut back throughout the 1990s prior to a total ban in 1997. Oil, coal and natural gas are present in significant quantities, along with deposits of tin, zinc, antimony, chromium and gold. However, the oil and gas is mostly offshore and of relatively low quality, so it may be some years before Vietnam acquires the extraction and refining capabilities to derive full benefit from it. The remainder of the industrial sector is devoted to the production of textiles, chemicals, processed foods and machinery. Following annual growth averaging 13 per cent since 1995, the industrial sector now accounts for 25 per cent of GDP.
The ending of the US embargo in 1994 allowed Vietnam to join institutions such as the World Bank and IMF as well as giving access to the wider international financial system. The banking and finance sector has undergone rapid growth in the last few years, although the government has belatedly realised the importance of modernising what is a fairly primitive system. More recently, a trade agreement with Washington is likely to boost foreign investment in Vietnam. Vietnam is a member of the Asian Development Bank and has signed the ASEAN Free Trade Agreement. Japan, Singapore and Hong Kong are Vietnam’s principal trading partners, followed by France and Germany.
Business: Smart lightweight casuals would usually be worn for meetings as suits are needed for only the most formal occasions. English is not spoken by all officials and a knowledge of French will be useful. Business cards should have a Vietnamese translation on the back. Office hours: Mon-Sat 0730-1200 and 1300-1630.
Commercial Information: The following organisation can offer advice: Vietcochamber (Chamber of Industry and Commerce of Vietnam), 9 Dao Duy Anh Street, Hanoi (tel: (4) 574 2022; fax: (4) 574 2020; e-mail: vcci@fmail.vnn.vn; website: www.vcci.com.vn).
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