Dr. Rainer Zitelmann: Vietnam has chance becoming one of the world's economic powers

WVR - Vietnam is now one of the world’s most dynamic countries, with a vibrant economy that creates great opportunities for hardworking people and entrepreneurs.

Dr. Rainer Zitelmann, a famous businessman, real estate expert and author, shared his opinion with the World and Vietnam Report.

Dr. Rainer Zitelmann:
Dr. Rainer Zitelmann, famous businessman, real estate expert and author world.

Vietnam's economy in 2022 ended impressively, with a growth rate of 8%. How do you rate this result? Will Vietnam keep that growth rate this year?

I cannot make any short-term predictions, but if Vietnam continues to consistently follow the market-economy course, Vietnam has the chance to become one of the world's leading economic powers and to surpass the growth rates of most countries. The prerequisite for this is that Vietnam continues to follow the market-economy course.

Vietnam is such a great example that I wrote my next book about it, “The Rise of the Dragon and the White Eagle. How Nations escape poverty". The book is about Vietnam and Poland, and in it I explain that these two countries are models for other nations that want to escape poverty. Before the economic reforms began, every bad harvest led to hunger, and Vietnam relied on support from the UN’s World Food Program and financial assistance from the Soviet Union and other Eastern Bloc countries.

As late as 1993, 79.7 percent of the Vietnamese population was living in poverty. By 2006, the rate had fallen to 50.6 percent. In 2020, it was only five percent. Vietnam is now one of the world’s most dynamic countries, with a vibrant economy that creates great opportunities for hardworking people and entrepreneurs.

From a country that, before the market reforms began, was unable to produce enough rice to feed its own population, it has become one of the world’s largest rice exporters and a major electronics exporter.

In your opinion, what challenges will Vietnam's economy face this year?

Vietnam should take its cue from what the Heritage Foundation writes about Vietnam in its "Index of Economic Freedom 2023." The strengths and weaknesses of Vietnam's economy are well described there: Vietnam secures strong ratings in the areas of "Fiscal Health" and "Government Spending" and moderate ratings for "Business Freedom" and "Monetary Freedom." Vietnam rates poorly for "Government Integrity", "Judicial Effectiveness," "Property Rights" and "Investment Freedom".

Strengthening the rule of law and fighting corruption remain key challenges for Vietnam. It is also important to advance the process of privatizing state-owned enterprises. The share of state-owned enterprises in Vietnam is still too high.

The US News & World Report magazine announced the ranking of the most powerful countries in the world in 2022, showing that Vietnam is the 30th most powerful country in the world with a GDP of over 363 billion USD and a population of over 98,2 million inhabitants. In Southeast Asia, Vietnam is only behind Singapore (26th position), Indonesia (32nd position) and Thailand (36th position). How do you rate this result?

This is a result of the policy that began with Doi Moi in 1986. The market economy reforms in Vietnam that were started then are now paying off. Vietnam’s economic freedom score is 61.8, making its economy the 72nd freest in the 2023 Index of Ecoomic Freedom. Its score is 1.2 points better than last year. Vietnam ranks 14th out of 39 countries in the Asia-Pacific region, and its overall score is above the world and regional averages.

What is most important, however, is not just the most recent score, but the change in the ranking over time: no country of comparable size in the whole world has gained as much economic freedom as Vietnam since 1995. Back in 1995, when the Index was first compiled, Vietnam scored a meager 41.7 points. In the intervening years, Vietnam has gained 20 points.

Dr. Rainer Zitelmann:
Vietnam is now one of the world’s most dynamic countries, with a vibrant economy that creates great opportunities for hardworking people and entrepreneurs.

How do you predict Vietnam's economic situation in 2023 and beyond?

I am very optimistic about Vietnam. But there is one precondition: The most important thing is that Vietnam does not forget that its economic success is a result of the "less state, more market" policy. Unfortunately, many countries in the world today are going a different way "more state, less market". If Vietnam implements further free-market reforms, reduces the state influence and corruption, strengthens the rule of law, then the potential of your country is limitless.

Many experts believe that the flow of foreign direct investment (FDI) into Vietnam promises to accelerate in the coming time. What do you think about this issue?

I agree. FDI is going to increase a lot. More and more companies are realizing that Vietnam offers great potential, and not just because of relatively low wages. Many countries want to diversify more in their Asian investments, and Vietnam is benefiting from this.

Thank you so much!

Dr. Rainer Zitelmann is a famous businessman, real estate expert and author world. He has written and published his 23rd book, which, notably, Dare to be Different and Grow Rich.

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