Hanoi (VNA) – However
Vietnam is supposed to have certain advantages, to maintain lasting success the country should be a keen student of not only the advantages but also the lessons learned from other countries, said Moritz Kraemer, former global ratings director of the Sovereign Ratings Group at S&P Global. and currently Chief Economist, Head of Research at Landesbank Baden Wuerttemberg (LBBW).
Speaking to Vietnam News Agency, the expert said the world is in turmoil and the old pattern of globalization is under strain as the once reliable supply chains are broken and seem refuse to heal. Additionally, inflation appears to be spiraling out of control in most advanced economies as commodity prices soar and labor becomes increasingly scarce.
He predicted that international companies will gradually seek new locations in their quest to diversify sources of supply, after becoming painfully aware of the risk of putting most of their eggs in one basket. One place that more and more of them seem to be finding to fit this bill is Vietnam, a country that offers political and monetary stability, economic openness, industrious labor and cost always competitive workforce, he pointed out.
Vietnam will overtake some Asian countries in the future as its net FDI inflows have averaged 5 percent of GDP per year, by far the highest ratio in the region, Kraemer said, saying investment is being attracted. by the still abundant and relatively cheap labour, making Vietnam an exporting power.
On lessons for Vietnam in economic development to ensure lasting success, Kraemer said that right now Vietnam is still full of promise. The recent ratings update by S&P Global makes it likely the country will be the next “rising star”, he said.
“I believe that lasting success requires that the country’s leaders remain vigilant in planning economic and human development strategies. Investors looking to Vietnam now might otherwise be looking for greener pastures in the next Vietnam. By applying appropriate measures, Vietnam will remain an attractive destination for foreign investors,” Kraemer said.
Meanwhile, Jens Ruebbert, LBBW’s managing director and regional manager for the Asia-Pacific region, pointed out that in many ways, Ho Chi Minh City is a place of seemingly limitless promise.
By applying a suitable population policy, Vietnam has managed to avoid the labor shortage and have an abundant labor force. However, the country’s dynamic population will bring other challenges, he said.
“It also underscores the urgent need for Vietnam to safeguard a sustainable path to prosperity as well as improve the skill level of the people, accelerating the move up the value chain,” the official said.