Businessman Mai Vu Minh's insights from Vietnam's economic trajectory

Promising signals from the numbers

As the Chairman of SAPA Thale Group, also known as the SATAS Group, Minh's decades-long tenure in global finance endows him with a unique perspective, transcending conventional financial discourse to offer nuanced insights into Vietnam's economic trajectory.

Mr. Mai Vu Minh in a meeting with U.S. President Donald Trump (2017)

The onset 2020 saw Vietnam riding the waves of sustained economic expansion, propelled by three decades of market-driven reforms catalysing a transition from agrarian roots to a dynamic manufacturing hub buoyed by foreign direct investment (FDI).

This transformative journey has catapulted Vietnam from the depths of poverty to the echelons of lower-middle-income status. The first half of 2023 witnessed a GDP growth of 3.72%, spearheaded by the service sector, which thrived on domestic consumption stimuli, post-pandemic economic resumption since March 15, 2022, and a resurgence in tourism following the easing of Covid-19 restrictions. However, the export sector faced headwinds, grappling with a 12% contraction attributed to weakened demand in key markets like the US and EU.

Mr. Mai Vu Minh with Japanese Prime Minister Shinzo Abe (2017).

In Q1/2024, the economic landscape of Vietnam showed positive growth from various perspectives. Vietnam's economy recovered quite well, driven by three aspects.

Firstly, the recovery of international trade and Vietnam's trade acted as a driving force for continued exports.

Secondly, the investment fragmentation policy. Additionally, investment is forecasted to grow well in 2024 as Vietnam's current investment-attracting sectors align with global shifts. Notably, Resolution 50, which aims to attract and select FDI, emphasises green technology and electric vehicles as sectors where Vietnam has the potential to attract capital flows.

According to the socio-economic report for May and the first five months of 2024 recently published by the General Statistics Office, macroeconomic stability was maintained, inflation was controlled, and primary balances were ensured. The average consumer price index (CPI) for the first five months of 2024 increased by 4.03% year-on-year; core inflation increased by 2.78%.

Moreover, the economy continued its recovery in May 2024 with more positive signs. The industrial production index (IIP) for May 2024 increased compared to April 2024. Overall, the IIP for the first five months of 2024 increased by 6.8% year-on-year. The IIP data reflects a more vigorous recovery in the industrial sector over time.

In addition, public investment capital achieved better results in disbursement plans than in 2023. Foreign direct investment (FDI) registered in Vietnam reached USD 11.07 billion, up 2% year-on-year.

Chairman of the Ho Chi Minh City People's Committee Phan Van Mai and Mr. Mai Vu Minh (2023)

Especially, implemented FDI in the first five months is estimated at USD 8.25 billion, up 7.8% year-on-year, marking the highest five-month implemented FDI in the past five years, of which 78.9% of implemented FDI was in the processing and manufacturing industry, creating momentum for rapid and sustainable growth in the future.

International merchandise trade activities were a bright spot, with total import and export turnover estimated at USD 305.53 billion, up 16.6% year-on-year, of which exports reached USD 156.77 billion, up 15.2%, with an average monthly export turnover of USD 31.35 billion over five months; imports reached USD 148.76 billion, up 18.2%. The trade balance of goods had a surplus of USD 8.01 billion.

Essential export items continued to recover well; some export categories saw significant increases compared to the same period last year, such as computers, electronic products, and components increased by 33.4%; machinery, equipment, tools, and spare parts increased by 11.8%; various types of phones and components increased by 11.6%; cameras and camcorders increased by 61.2%.

From these results, billionaire Mai Vũ Minh highly appreciated Vietnam's ability to recover amidst challenges and emphasised the critical role of domestic consumption in driving national economic momentum.

Mr. Mai Vu Minh in a meeting with Deputy Minister Vu Dai Thang, Ministry of Planning and Investment (2018).

Lessons for Vietnam

According to Mai Vu Minh, the growing middle class and increasing consumer spending habits have fueled demand across various sectors, from traditional markets to luxury shopping complexes.

Moreover, Mai Vu Minh praised the government's investments in enhancing transport infrastructure, energy production, and digital connectivity, creating an attractive environment for foreign businesses considering Southeast Asia as a lucrative investment destination.

The entrepreneur noted that Vietnam's rapid economic development has made it an appealing ground for startups. However, to overcome new global challenges, Vietnam needs to improve its green economic policies to seize worldwide trade and investment opportunities.

Additionally, Mai Vu Minh pointed out the challenges facing Vietnam. Balancing economic growth with environmental sustainability, narrowing income disparities, and improving workforce skills emerged as urgent tasks. Mai Vũ Minh believes that Vietnam's trajectory depends on the government's steadfast commitment to reforms.

Regarding global financial trends, the billionaire highlighted the long-term impacts of the 2008 global financial crisis and the different strategies adopted by developed and developing economies after that. While economic powerhouses like the US and Japan employed quantitative easing, emerging markets like Vietnam acted cautiously, prudently navigating the turbulent financial waves.

Entrepreneur Mai Vu Minh with Canadian Prime Minister Justin Trudeau (2017)

Mai Vu Minh raised concerns about the fissures in the global economic structure, particularly the shadow banking activities and rising debt levels. These are seen as potential threats that could destabilise the international financial structure. This serves as a lesson for Vietnam, which, despite its significant growth, must remain vigilant against systemic risks.

Regarding Vietnam's economic development path, Mai Vu Minh's insights depict a country poised for continued growth. His profound observations guide investors, policymakers, and business leaders in navigating the current economic landscape of Vietnam.

A staunch advocate of combining local knowledge with a global perspective, Mai Vu Minh's interactions with business magnates and political leaders within and outside Southeast Asia have enriched his worldview and reaffirmed his belief in the region's commercial potential.

In his meetings with over 30 global leaders, Mai Vu Minh has consistently emphasised the transformative impact of investment cooperation programs in enhancing economic relations between Vietnam, Western Europe, and the broader international community.

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