VN attracts ASEAN medium-sized enterprises

VGP – Thanks to fast growth rates and demographic advantages, the Vietnamese economy has offered a charming environment for ASEAN medium-sized enterprises.

July 29, 2019 11:21 AM GMT+7

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Standard Chartered assessed that Viet Nam was listed in the “7% group” which comprises countries with over 7% GDP growth rates in 2020s. The economic size would double after each decade. FDI sector was forecast as a driving force for Viet Nam’s success. A large number of foreign enterprises have acknowledged Viet Nam’s potentials. FDI hit a record of US$ 19.1 billion in 2018, representing a year-on-year growth of 9.1%. In the first five months of 2019, FDI attraction surged by 69.1%.

Open economy

Standard Chartered CEO for Viet Nam, Cambodia and Laos Nirukt Sapru attributed the impressive achievements to Viet Nam’s position as one of the most open economies in ASEAN.

Viet Nam is a member of 26 FTAs including the CPTPP which has opened abundant opportunities for medium-sized enterprises to select and set footholds in Viet Nam. The local trade environment was forecast to get better when EVFTA takes effect at the end of 2019.

In addition, Viet Nam has demographic advantage including young, well-educated, digital-based population which creates a favorable foundation for effective labor force and promotes demands in real estate and consumption services.

Standard Chartered assessed three potential areas in Viet Nam namely real estate, production, and infrastructure.

Real estate plays as an important economic pillar, surging by 11.7% in 2018 to US$ 191 billion of turnover. The real estate sector brought back numerous potentials for ASEAN medium-sized enterprises and absorbed US$ 3.37 billion of FDI in 2018, accounting for 10.3% of total FDI.

With 11% growth rate of FDI, production sector has become an important one in Viet Nam thanks to advantages in labor forces and Government’s preferences for auxiliary industries. Standard Chartered predicted that the FDI inflow would be maintained highly in medium term.

The Vietnamese Government committed to spending US$ 920 million on infrastructure development by 2020. In addition, renewable energy would become a focus in the next five years.

According to Standard Chartered, ASEAN medium-sized enterprises are enjoying special opportunities to take advantage of the improved economy and demographic factors in Viet Nam.

CEO Nirukt Sapru proposed ASEAN medium-sized enterprises apply appropriate strategies on technological applications to raise productivity and cut costs./.

By Khanh Phuong