Vietnam Loses Appeal to Foreign Investment amid Economic Woes

By Jennings, Ralph | The Christian Science Monitor, August 2, 2011 | Go to article overview

Vietnam Loses Appeal to Foreign Investment amid Economic Woes


Jennings, Ralph, The Christian Science Monitor


Vietnam, once seen as on its way to joining economic tigers Taiwan and South Korea, has seen foreign investment decline sharply amid labor problems, crumbling roads, and the global financial crisis.

Vietnam's economic future is on the rocks.

Foreign firms in this ramshackle but once booming factory district just outside Ho Chi Minh City are watching bottom lines and studying other markets closely, both of which have become threats to Vietnam's economic growth.

But after the global financial crisis, foreign direct investment pledges fell from $66.5 billion in 2009 to $20 billion in 2010. Now, the number of foreigners leaving Vietnam slightly exceeds those entering, contrasting a 4-to-1 ratio favoring arrivals in 2008, says Ralf Matthaes, regional managing director with market research firm TNS Global.

Nightclub clientele has dropped, foreign patrons say, bubble tea shops popular with Taiwanese business people have closed, and Bien Hoa's four-star hotel is barely half full.

"Most foreign firms will wait," says Nguyen Xuan Thanh, public policy director with the Fulbright Economics teaching program in Ho Chi Minh City. "Of course some will choose [to invest] elsewhere. There are serious structural problems [in Vietnam]." He adds that there's some concern among investors about whether Vietnam will ever return to the type of growth it once knew.

What happened?

Five years of struggles with inflation, a slipping currency, and intractable labor problems have squeezed profits for the thousands of foreign firms that came to the impoverished country in 1987 when the Communist government suddenly opened to outside investment with the promise of cheap land and labor.

Investors built up this industrial heartland, filling its potholed roads with 24-hour truck traffic and lifting economic growth nationwide to an average of 7 percent per year during the past decade.

Now, foreign business people who flocked to invest in Vietnam's budding economy, particularly in manufacturing, say that since 2007 they have been hit by a volatile mix of economic pressures.

The limited pool of reliable and skilled workers around Ho Chi Minh City has hindered growth in foreign firms. And the inflation of 11.1 percent that followed economic overheating before 2008 has fueled a growing number of pay-related, nonunion strikes, 336 in the first four months of 2011 compared with 541 in all of 2007.

Struggling to stay afloat

In the Bien Hoa Industrial Zone, some 20 miles outside of Ho Chi Minh City, wary managers with the Taiwanese-owned manufacturer Taya Electric Wire & Cable have averted strikes at a 280-employee factory by raising pay, even though wages exceed the legal minimum that has gone up three times in 2011. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Vietnam Loses Appeal to Foreign Investment amid Economic Woes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.