In 1990 the average per capita income in Vietnam was still less than $ 100 a year. A lot has happened since then: the economy is growing as strongly as hardly any other worldwide.
On January 23, 1973, US President Richard Nixon turned to his compatriots and announced the end of the war in Vietnam. That only meant the withdrawal of the US troops. Peace came two years later. The country was split and ruined.
This was followed by years of miserable poverty, which lasted until the 1990s, said the historian Reiner Zitelmann, who dealt intensively with the history of Vietnam. “Vietnam was the poorest country in the world in 1990, also poorer than all African countries. The per capita gross domestic product was $ 98. That was less than less than in Sierra Leone or Somalia.”
Marcus Weyerer, Franklin Templeton Investments, on the economic situation of Vietnames 50 years after the end of the war
Also German companies in Vietnam
While the annual income was $ 98 35 years ago, today it is around $ 5,000. That is still little, but still a gigantic progress. The change began in 1986. The government was forced due to the catastrophic economic situation to initiate an opening policy called “Doi Noi” (“renewal”). The allowed foreign companies allow access to the country.
Also German companies. Peter Buerstedde works for GTAI, an organization that advises German companies on investments in Vietnam. The big breakthrough only came much later, he reports: “The large influx of foreign investments only came when they join the World Trade Organization in 2007, and in 2018 there was still a huge boost with the punitive tariffs on China products under the first Trump government.”
On the way to Climate neutrality
Is Vietnam now facing a new thrust because it once again benefits from the trade conflict between China and the USA? The plans are ambitious: in 2045 the country wants to mature for industrial nation. And not only that, says Buerstedde. “Vietnam also wants to be 2050 climate -neutral, like many other countries in the world. But this is still a long way for an economy like in Vietnam, which is still dependent on coal for half of the electricity requirement.”
Vietnam seems to want to overtake himself. By 2050, the country is also to become one of the largest global players in the chip industry. However, Dietmar Schwank from the Austrian Chamber of Commerce in Hanoi has been in doubt: “Over 40 semiconductor companies from abroad have invested in Vietnam, but the country will need around 50,000 specialist engineers in the semiconductor area by 2030 in order to keep up with the intended development.”
Cheap wage country with massive growth rates
The DAX company Infineon, Germany’s largest manufacturer for semiconductors, also produces in Vietnam. Germany is well represented in the country, with air, says Gtai expert Buerstedde: “Every year around five to ten factories are added, so it develops relatively steadily, but German commitment cannot be compared to the commitment of the Japanese, the Chinese, the Taiwanese or the Koreans, who are by far the biggest investors.”
Vietnam is still an absolute low -wage country. The wage level is half of the Chinese. Large industrial parks invite companies from all over the world, the infrastructure is good, albeit expandable, and the country shines with growth. In the past ten years it was an average of six percent. Vietnam is one of the fastest growing economies in the world.
