Last update on May 8th, 2013

Last updated on Mar 13, 2014

DP VIETNAM
since 1995

Last update on May 8th, 2013

Country Key Figures - 2013

GDP/Capita
$1,705

GDP / Capita

GDP / Capita

$1,705

$44,387

3
2

1.5

1.7

Source: IMF

1.8

2.0

2.1

2
1
1

GDP Growth

0
2012

2013

2014

2015

2016

in thousand USD

5.24%

47.00
45.00
43.00
41.00
39.00
37.00
35.00

43.00

43.58

GDP / Capita

$6,629

44.39

10.00
9.00
8.00
7.00
6.00
5.00
4.00

45.35

41.14

2012

2013 2014 2015

in thousand USD

8.8
8.0
7.3
6.6

6.1

2012

2016

2013

in Million

91.473

In 2011, Vietnam is overheating and rein in double-digit inflation. After

monetary policy tightening, inflation reduced in 2013 at 8.8%, and it is
expected to reduce to 8% this year, which is also the government's target.

Inflation
8.80%

2015

2016

in thousand USD

With the consistent growth of population at around 1.2% per year, Vietnam
population is expected to reach 92.5 million by 2014. The more populous
labour force will be precious assets of Vietnam when the economy is
improved and there are more employment opportunities.

Population

2014

63.70 million
1,360.76 million

1.57 %
3.013 %

1900 USD/month

Min Wage
Minimum wage increased last time in Oct 2013, and it is suggested to
continue to increase in 2014.

128 USD/Month

between 138 and

USD/month

Key Economic Indicators

GDP (Billion USD)
GDP growth (%)
Inflation (yearly average - %)
Current account balance (% GDP)
Public debt (% GDP)

2013
156
5.2
8.8
7.9
50.9

2014
171
5.2
8.0
6.3
50.8

GDP by activity

Labour Distribution

31%
Agriculture
Industry
Services

2015
184
5.3
8.5
3.7
50.4

48%

42%
19%
39%

21%

2016
202
5.4
7.8
2.3
48.9

Last update on May 8th, 2013

Context Assessment
STRENGTH

WEAKNESS

Skilled, cheap labour

Country specialises too much on competitiveness of

low value-added products
Persistent shortcomings in business environment

Solid agricultural potential and natural resources

Development strategy based on economic
openness and diversification

Lack of infrastructure
Incomplete public sector reform
Deepening inequalities
Weak banking system
Source: coface

Political Assessment
Chief of State
Head of Government

Prime Minister Nguyen Tan Dung

Electoral System

National
election
every 5 years.
Upcoming elections in
2016.

Low

High Risk
Source: Ducroire & Delcredere

Corruption Maping

Vietnam is ranked 116 in

the world out of 177

Source: transparency intl

Last update on May 8th, 2013

Risk Assessment
Slight recovery expected in 2014
Growth is expected to accelerate slightly in 2014 after a two-year slowdown, but will still be below its historic average. This is
because the Central bank cut its key rates (by 800 basis points between 2012 and 2013). An $8-billion fiscal stimulus plan
during the 2013 to 2015 period (4.7% of GDP) has been introduced, which focuses, in particular, on VAT arrears, tax on
businesses and an infrastructure investment programme. Moreover, lower inflation means that private consumption is likely to
rebound, thus boosting retail sales.
Meanwhile, firm industrial output in 2013, together with export recovery, is expected to continue in 2014. Vietnam will continue
to benefit from the strong American economy, the US being its main client. Although the country will profit from a move
upmarket in its exports, as evidenced by increased exports of electronic products, the country is still an assembly workshop for
Asian industries and textiles; shoes still represent 20% of exports. Regarding the agricultural sector, Vietnam benefited from
favourable weather conditions and the rice export quota in Thailand. In 2012, Vietnam became the worlds leading exporter of
rice.
Moreover, incoming foreign direct investment flows remain high, due to the tendency of Asian companies to relocate and
develop production units in Vietnam.
Finally, inflation slowed sharply in 2013 and is likely to remain contained in 2014, despite rising transport, electricity and
housing costs. Nonetheless, if there was a move to aggressively loosen monetary policy, a substantial rise in inflation cannot
be ruled out. The authorities seem, however, to be keeping a close eye on controlling inflation in their conduct of economic
policy.
Stabilisation of external accounts, persistent public deficit and still weak banking system
In the wake of substantial capital flight forcing the authorities to devalue the dong six times between 2008 and 2011, the
countrys external accounts have now stabilised. Moreover, Vietnamese exports have proved resilient in the face of an adverse
international economic cycle while imports have risen slowly, thus beefing up the current account surplus. In 2014, the current
account surplus will fall, as imports recover in a context of stronger domestic demand, but it will still be substantial. Even
though the authorities allowed the dong to depreciate by 1% in June 2013, the countrys external macroeconomic fundamentals
have improved and foreign exchange reserves are expected to represent 3.5 months of imports in 2014. This level is low but
trending upwards.
In 2014, the fiscal deficit and public debt will stabilise at relatively high levels. However, sovereign risk remains high. Apart from
the public accounts lack of transparency, the public debt remains very vulnerable to exchange rate risk as over 60% of it is
denominated in foreign currency. Moreover, contingent liabilities could undermine the medium-term sustainability of the public
debt, if default by state-owned enterprises hits the large banks, as in the case of Vinashin.
Finally, the banking system remains precarious, as it is poorly capitalised and highly dollarized. The banks are also vulnerable
to exchange rate risk. Despite the creation of a bad bank, credit risk remains significant as it is under-funded and also because
numerous political obstacles hamper its effectiveness. Meanwhile, the public-owned banks high exposure to non-transparent
state-owned enterprises is an additional fragility factor.

Persistent shortcomings in the business environment

Governance remains the countrys Achilles heel and is a risk in terms of its appeal to foreign investors. The main shortcomings
concern respect for the law and corruption, which, despite the reforms undertaken, remains widespread within political and
economic circles as the Vishanin case shows. Meanwhile, the Communist Party still controls the countrys entire political,
economic and social life. Finally, Japan and the United States are providing increased support to Vietnam, while relations with
China continue to be strained.

Last update on May 8th,

2013
Source:
coface

Local Currency Evolution & Trade Balance

USD/VND
The local currency is the Dong (VND - Vietnam Dong). VND is
tend to lose value against USD from year to year as the
government stimulate exporting

Vietnam recorded a trade deficit of 550 USD Million

in February of 2014. Vietnam exports mainly crude
oil, textiles, seafood, rice, electronics and
computers and rubber. It's main exports partners
are: United States, Japan, China, Australia and
Singapore. Vietnam imports machinery tools and
spare parts, petroleum, steel, fabrics and plastics.
Vietnam's main imports partners are China, Japan,
South Korea, Taiwan, Thailand and Singapore. This
page provides - Vietnam Balance of Trade - actual
values, historical data, forecast, chart, statistics,
economic calendar and news

USD is the common currency that is prefered by most

exporters/ importers in Vietnam.

Ease of doing business - Rankings

Ranking
2014

Ranking 2013

Change in
Rank

Starting a Business

109

107

-2

41

158

Dealing with Construction Permits

Getting Electricity
Registering Property
Getting Credit
Protecting Investors
Paying Taxes
Trading Across Borders

29
156
51
42
157
149
65

29
155
48
40
169
145
66

No change
-1
-3
-2
12
-4
1

92
42
149
55
80
52
36

185
119
48
73
98
120
74

Enforcing Contracts
Resolving Insolvency

46
149

46
150

No change
1

7
46

19
78

Source: www.doingbusiness.org

Last update on May 8th, 2013

Exports distribution
Exports per Industry

11.58%
33.69%

10.60%
12.08%

2.07%
5.50%

8.50%

3.70%

TEXTILE & GARMENT exports

12.28%

Textile & garment

Footwear
Electric and Electronic
Agriculture
Mineral & petroleum
Silverware & jewelry
Furniture
Rubber & latex
Others

FOOTWEAR & LEATHER exports

Last update on May 8th, 2013

Garment in Vietnam a SWOT overview

Strength
Equipments using in the Textiles & Garments Industry
have been being innovated and modernized up to 90
percent. Thus, quality of products have been highly
improved to be accepted by difficult markets such as
the U.S, EU and Japan.
International partners had good evaluations on the
capacity of Vietnamese manufacturers;

Weakness
Technology is largely imported
Managerial skill is still limited;
Designing works and fashionable products are still at a
early stage level;
Depending much on the imports of raw materials and
accessories for its export products

Labour cost in Vietnam is still competitive;

Labours have highly qualified technical Skills and they
are working hard;

Weakness in marketing, building their own brand names

as well as long-term development strategies for the
enterprises.

Having a very stable political regime;

Opportunities

Threats

There is a movement of production of garments and

textiles products toward developing countries, including
Vietnam.

Big markets such as the U.S and EU have also been

applying barriers on anti-dumpingon made-in-Vietnam
products in order to protect domestic production industry.

Vietnam is a member of WTO, and free trade

agreements (FTA) at bilateral level (with Japan) and
multilateral level (with ASEAN-Australia, ASEAN-New
Zealand, ASEAN-Korea, ASEAN-China);

Most of Vietnams Small & Medium Enterprises have not

enough financial capabilities to persuade anti-dumping
lawsuits, causing losses in commercial disputes for
themselves.

Vietnams domestic market with 86 million people is

another factor attracting great attention of foreign
investors and international business community;

Last update on May 8th, 2013

Transport in Vietnam
The transport sector has contributed positively to the economic growth of Vietnam over the past decade and has helped reduce
poverty directly through better linkages to markets, education and health facilities and indirectly through its contribution to growth.
Nevertheless, the transport sector faces several challenges such as the high traffic accident rates, new capacity constraints, and a
large increase in asset preservation requirements to meet the fast expansion of transport assets. Other impediments reside in the
sectors policy, planning, budgeting, regulatory, and implementation frameworks.

ROAD NETWORK
The road network in Vietnam is 210,000 km, of which 17,300 km are national roads,
17,450 km are provincial roads, 36,400 km are district roads, and 7,000 km are urban
roads. The remaining 131,500 km are rural roads.
Vietnam Transport Highways
The percentage of paved national roads is a useful indicator of the quality of a countrys
most important road network. 84 percent of Vietnams national roads are currently paved
up from 61 percent in 1997. The current percentage of paved national roads is reasonable
by regional standards.
The condition of the network has also improved with the percentage in good condition increasing from 37 percent in 1999 to 45
percent (good and average 66 percent) in 2002. The improvement in the quality of the network appears to be largely driven by new
construction rather than by the maintenance of the existing capital stock because expenditures on periodic and routine
maintenance of national roads between 1998 and 2002 were less than half the of the maintenance needs as estimated by the
Vietnam Road's Administration in its Ten-Year Strategic Maintenance Plan.

Urban Transport
Motorcycles are presently the primary mode of transport in the major Vietnamese cities. In both Ha Noi and Ho Chi Minh City,
motorcycles account for 60 - 65 percent of vehicular trips, with bicycles accounting for another 25 percent.
Automobiles account for less than 5 percent of trips in both cities and ownership is relatively low though growing rapidly. In HCMC,
the number of registered automobiles increased from 137,000 in 2001 to about 245,000 in 2004 and 294,331 in November 2006.
Buses account for about 7 percent of vehicular trips in Hanoi.
The road network is relatively limited and opportunities to increase road capacity in the urban areas is limited. Both the country's
major cities would face serious congestion problems if private auto ownership and use continues to grow in conjunction with
currently forecast rates of economic growth. Up to November 2006, the number of automobiles grew to 965,455 (8.3 percent
increase) and the number of motorcyles increased to 18,406,385, constituting a 14.1 percent increase.
This is well recognized by city leaders and both cities have stated policies prioritizing public transport and have plans to upgrade
their bus systems and invest in new urban rail.
Urban road safety in particular is a problem. While statistics on accidents resulting in non-serious injuries are considered
unreliable due to substantial underreporting, it appears that there are 800/900 road fatalities per annum in Ho Chi Minh City and
400/500 in Hanoi, 70 percent of which are cyclists or motorcyclists.

Last update on May 8th, 2013

RAILWAY
The network consists of 7 lines with a total length of 2,632 km. All lines are single track,
mostly meter gauge, with a few standard gauge and double gauge towards the Chinese
border. There are over 1,800 bridges (57,044 m) and 39 tunnels (11,513 m) and 281 stations.
The Vietnam Railway Cooperation (VRC) is the sole supplier of rail services in Vietnam. Following corporatisation, VRCs internal
business has been restructured into four main business groups: two passenger train operating entities (North and South), a freight
train operating company and a looser grouping of regional infrastructure administrations. The train operating entities are quasiindependent management and accounting entities.
The Vietnam Railway Administration remains responsible for planning development of the sector, for new construction and for
securing resources for maintenance. The VRC pays 10 percent of its gross revenues as a track access charge. These funds are
generally used toward infrastructure maintenance.
Despite a network which is small, old and has received negligible investment for upgrading, the VRC has performed reasonably
well. Vietnam does not have the concentrated flows of bulk raw materials or the long-distances which give rise to heavy rail freight
flows. However, its eight lines serve high density passenger corridors.
Taking freight and passenger traffic together, traffic density is about 2.3 million traffic units/route-km per annum, which is relatively
low compared to other countries in the region. The average passenger train load in Vietnam is around 370 passengers which are
relatively high, but average freight load of 225 tons is low, as a result of low axle-weight infrastructure, short crossing loops and
possible sub-optimal freight operating plans.
Inland Waterways
Vietnam has 41,000 km of natural waterways, of which 8,000 km are used commercially.
Of these, the Vietnam Inland Waterways Administration manages about 6000 km as well
as the main river ports; local governments manage the balance of the commercial waterways.
River boats and barges have rapidly developed. In 1999, there were 63,600 units with a capacity
of 1.7 million dead weight tons and 197,000 passenger seats. In 2003 this had increased to 83,000
boats with a capacity of 3.7 million dead weight tons and 280,000 passenger seats. In addition there
are tens of thousands of small country boats and ferry boats.
Despite limited investment, the waterways remain attractive for the transport of coal, rice, sand, stone, gravel, and other usually
high weight low value goods; and livelihoods and personal transport depend heavily and successfully on waterway transport in the
delta regions of the Mekong and Red River.
The inland waterway system is managed by nine state waterway management companies; and river ports are managed by three
port authorities. Inland waterway transport services are provided by state-owned enterprises operating under two state
corporations attached to the Ministry of Transport Northern Waterway Transport Corporation and Southern Waterway Transport
Corporation; specialized state-owned transport companies under other ministries carrying materials to cement plants, paper mills
and construction material enterprises, and private for-hire operators.
Private operators have expanded their market share significantly in recent years. Foreign companies can provide transport
services on the waterways through joint ventures in which the foreigners share does not exceed 49 percent. Freight and
passenger transport rates are freely determined by negotiation.

Ports and Shipping

Last update on May 8th, 2013

Vietnam has over 80 sea ports, totaling 22,000 m of wharfs with 2.2 million sq m of quays
and 1 million sq m of docks. The large ports in Vietnam have traditionally been developed
by the government through Vietnam Maritime Administration (Vinamarine) and turned over
to Vietnam National Shipping Lines (Vinalines) for operation.
Local governments manage about 20 ports, and several national- or local-level state-owned
enterprises operate specialized ports. The main ports are Hai Phong in the north and Saigon
in the south, but both are estuarine ports, distant respectively 30 and 90 km from the sea, i.e.
with access limited to smaller ships. The annual throughput of the ports has increased rapidly,
almost doubling over the last five years, from 56 million tons in 1998 to 114 million tons in
2003. Ports in the southern Focal Economic Zone still account for two thirds of total throughput.
There has been some foreign investment in the port sector. For example, the Vietnam International Container Terminal in Ho Chi
Minh City is 90 percent foreign owned, the Interflour grain port (with capacity to handle Panamax vessels) in Vung Tau is a 100
percent foreign owned.
The fleet of vessels has also expanded from a total number of 679 and capacity of 1.6 million dead weight tons in 2000 to 928
vessels and capacity of 1.8 million dead weight tons in 2003; an annual increase of 12 percent and 4 percent in vessel number
and capacity respectively.
Although port operations are divided among five separate companies, they are all part of Vinalines, which also operates seven
shipping companies that account for the majority of the national fleet. Port charges pertaining to vessels are set by the Ministry of
Finance and most of them do not vary from one region or port to another. Cargo handling charges are set by port operators,
service providers or by negotiation.
While foreign ownership of ports is possible, there are restrictions on the provision of port and shipping services by foreign
enterprises. With the exception of ship agency services which are not open to any degree of foreign participation, other services
can be offered by joint ventures provided the foreign entities share in the enterprise does not exceed 49 percent.
Although still lower than in more modern ports of the region, port efficiency has increased and port costs have come down.
According to Vinalines, throughput on container berths ranges from 20 to 25 units per hour in Saigon port and 30 units in the new
port of Cai Lan in Quang Ninh province and general cargo throughput is 1,500 tons/gang/day. These compare very favorably with
performance in other ports of the region. An international comparison reveals that the tariff at Saigon port is quite competitive with
other feeder ports in ASEAN and China.

Air Transports
The Civil Aviation Administration of Vietnam (CAAV) handles civil aviation and is under direct
authority of the government. There are 135 airports/airstrips for civil, military and police use in
the country. The CAAV is responsible for 18 airports and air navigation services. The airports
in the north, central and south handled 1.7 million, 0.8 million and 3.1 million passengers in 1998,
respectively, which have been increasing rapidly to 2.5 million, 1.2 million and 5.1 million
in 2002, respectively.
Vietnam TransportAir traffic grew sharply during the 1990s until the region was hit by subsequent financial and economic crisis.
The volume of air passenger in 1998 was 2.3 million international and 3.3 million domestic passengers. In 2002, the Ho Chi Minh
City and Hanoi airports (Tan Son Nhat and Noi Bai) reached a total of 8 million commercial passengers, of which 4.2 million were
international and 3.8 domestic. In 1998, approximately 60,000 and 47,000 ton of air freight were carried by international and
domestic flights respectively. In 2002, both international airports handled a total of 190,000 tons (including 2,000 tons of mail),
110,000 tons of international freight and 78,000 domestic freight. As the economy further diversifies and international regional
linkages are strengthened, the demand is expected to increase sharply.
International airfares are proposed by the airlines and ratified by CAAV. There are two different domestic airfares: one is
applicable to foreign citizens and overseas Vietnamese and other is for local Vietnamese. The maximum airfare to Vietnamese
passengers on domestic flights between Hanoi and Ho Chi Minh City is decided by CAAV and the Government Pricing Committee
and approved by the Prime Minister.
Two airlines, both members of Vietnam Airlines Corporation, operate in the country. The dominant one is Vietnam Airlines, which
accounts for 37 percent of international traffic to and from Vietnam and 94 percent of the domestic demand. The other operator is

Last update on May 8th, 2013

Two airlines, both members of Vietnam Airlines Corporation, operate in the country. The dominant one is Vietnam Airlines, which
accounts for 37 percent of international traffic to and from Vietnam and 94 percent of the domestic demand. The other operator is
Pacific Airlines which operates mainly between Hanoi and Ho Chi Minh City. It was established in 1995 and is jointly owned by the
Vietnam Airlines Corporation and several other companies.

Vietnam Exports - Industry Tree Map

Source: MIT Harvard observatory

Besides agriculture, energy, mining, minerals, Vietnam most exports products are mainly garment and footwear. Mechanic,
plastic and composite are also fast developing industries. Almost one-third of manufacturing and retail activity is concentrated in
Ho Chi Minh City.

Last update on May 8th, 2013

A few indicators
Working
Cost/hour
$0.97

Avg Lead Time

152.00

# staff
142

TO by employee
1,990,141

DOT
86%

# suppliers
62

pieces
capita
314,978

RPM
NQC/Million pces in EUR
15414

910

For more information

http://vietnamnews.vn/

www.coface.com

http://www.vir.com.vn/

www.cia.gov/library/publications/the-world-factbo

http://english.thesaigontimes.vn/

www.cdc.crdb.gov.kh