Tag Archives: Vietnam development

What Flappy Bird Tells Us about Vietnam

If you don’t think Vietnam has arrived yet as a player in the global economy, consider the case of Flappy Bird.  The sensational smart phone app dominated downloads of games on android and iTunes until its creator yanked it from the Internet last weekend.

The Flappy Bird inventor is a Vietnamese software engineer named Dong Nguyen, who lives with his parents in Hanoi.  He withdrew the app — even though it was bringing in up to $50,000 a day in ad revenue — because he was tired of the notoriety that was ruining his tranquil life.

A few years ago, millions of people in Vietnam didn’t have electricity, land lines, computers or access to the Internet — much less smart phones, and nobody in the Western world could have imagined a 29-year-old Vietnamese geek inventing a silly game that would consume hundreds of millions of hours that could otherwise have been spent on something more productive.  Yet that is exactly what has happened since Dong released Flappy Bird to the global economy last May.

Dong’s critics — and there are many of them — question whether he withdrew the game from the market as a publicity stunt to get people to focus on his next act.  He says the game disappeared because it is too addictive and because the international attention caused him too much grief.

A broader explanation might be cultural:  Vietnam has changed so dramatically and so fast that sometimes its ways of life cannot catch up with technology and market realities.  One of the cultural attributes of traditional Vietnam is a tendency not to bring attention to oneself — to be unassuming, modest, shy.  Could that be part of the reason Dong wants to get his life back?

The lesson for Western investors is they are well advised to learn the difference between cultural modesty and lack of initiative.  Vietnam is full of Dong Nguyens — millions of brainy entrepreneurs prepared to transform their own country and, in the process, infuse the world with Flappy Birds.

 

 

 

 

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Vietnam Rewards Patient Investors

American news organizations like the Wall Street Journal and Bloomberg are reporting this week that Vietnam ended up with a better year economically than international analysts had expected.  Meanwhile, investors who had more confidence in Vietnam have been rewarded with a 23% gain in stocks so far this year and 35% since last Dec. 1 — plus double-digit dividends for typical publicly traded companies.

With the focus on China and other challenged emerging markets, Vietnam has quietly strengthened its global economic positioning over the past few years. This year its stock index has outperformed all others in Southeast Asia as its GDP rose slightly more than 6% in the fourth quarter and 5.4% for the year — ahead of last year’s 5.25% and Bloomberg’s 5.3% projection.

The main drivers of Vietnam’s recovery are exports — up 15% and now equivalent to 75% of GDP — and foreign investment, up 10% to $11.5 billion this year.  Pledged foreign direct investment was reported at $22 billion, up 55%.

Vietnam is expected to have a trade surplus of $863 million this year, up from $747 million last year.  Government statisticians also say Vietnam’s inflation rate is down from 7% last year to 6% this year.

All of this suggests Vietnam is in a strong position to continue its determined and persistent  march toward full economic development.  The government aims for a modest and achievable GDP growth of 5.8%, which will likely reward foreign investors for a third straight year.

Being Oblivious to Vietnam’s Brainpower

American policy wonks this week are asking whether the US can compete globally in light of the OECD’s new PISA (Program for International Student Assessment) scores showing Asian teens out-distancing Westerners in math and science.  CNN and others suggested the ultimate insult to American education is that Americans have now fallen behind the Vietnamese.

That’s old news.  Actually the new scores merely document what anybody who has been paying attention to Vietnam has known for years:  Vietnamese children and teenagers have both the brainpower and the discipline to emerge later this century as a leading economy.  That assumes the country allows itself to unleash its potential.

The mean PISA score for 15-year-olds worldwide is 494 in math.  US  teens scored 481, ranking them 31st.  Shanghai was first at 613.  Vietnamese teens scored 511, ranking them 15th among countries tested — ahead of most Western nations, including United Kingdom, France, Norway, Italy, and Spain .

In science,  Vietnamese students scored even better compared to their classmates elsewhere in the world.  The mean score is 501 worldwide — 497 for the US and 528 for Vietnam.  Only seven countries fared better than Vietnam: China, Hong Kong, Singapore, South Korea, Japan, Estonia, and Finland.

In reading, the mean score was 496 worldwide — 498 for the US and 508 for Vietnam.

The new scores underscore the potential for Vietnam to accomplish in the 21st Century what Japan did in the 20th Century, emerging from economic obscurity to become one of the world’s leading economies.

It’s a story the Western world, and especially Americans, continue to ignore.  In fact, in reporting about the new PISA test scores, the New York City-based Wall Street Journal, as it typical of the newspaper that purports to keep American business leaders informed about global affairs, completely ignored the existence of Vietnam in its report and accompanying graphic.

Sooner or later, Americans will discover that Vietnam is the real story.

Rescuing Vietnam’s 882 Endangered Species

While Vietnam cultivates its industry and agribusiness, one arm of the government is looking to rescue economic development’s innocent bystanders:  882 endangered species of floral and fauna.  That number is up from 161 species 20 years ago even though some of those have become extinct, including nine kinds of animals.

Coming to the aid of non-human forms of life, Vietnam’s environment department this week introduced a national strategy to create 41 new nature reserves.  When and if that happens, 9% of Vietnam’s land mass and 45% of its forests will be protected — and there will be 10 biosphere reserves and 10 ASEAN heritage parks.  The agency’s biodiversity master plan also calls for 23 reserves by 2030 in addition to the 148 existing ones and the 41 to be established by 2020 (accounting for nearly 3,000 square miles of land).

Vietnam does not have a good reputation with organizations like the World Wildlife Fund, partly because the country — as one of the world’s most diverse — has so much to protect.  WWF and others have criticized Vietnam for not being more aggressive in combatting illegal trading of wild animals and habitat fragmentation that results from hydropower and other trappings of economic growth.

Even so, Vietnam has a passionate population of environmentalists who see biodiversity as the foundation of a green economy, a key to dealing with climate change, and a significant contributor to quality of life.  They want to balance the economic dreams of Homo sapiens with the needs of other species.

 

Vietnam Fruit and Vegetables Feed the World

Vietnam is now adding fruit and vegetables to its rapidly expanding array of major agricultural exports.  the Vinafruit industry group reports this week that exports are more than $724 million so far this year and will exceed $1 billion for the first time in 2013.

That’s a remarkable accomplishment for a country that faced starvation poverty a generation ago — and it shows Vietnam continues to grow as a major exporter of agricultural products.

Vietnam has a long way to go before it will become a global leader in fruit and vegetable exports,  but the country already is at or near the top of exports of seafood, coffee, pepper, cashews, rice, and other products that come out of the earth and sea.

Vietnam sells fruit and vegetables in 40 international markets, especially in China, USA, Japan, Korea, and Europe.

Vinafruit says the global demand for fruit and vegetables is predicted to increase 5% annually, and Vietnam intends to continue to supply the world with an expanding array of produce.

Vietnam has completed the transition from an agricultural basket case to a growing food supplier for the world.

Communist Vietnam’s Ultra Wealthy Capitalists

The official newspaper of the Communist Party of Vietnam reports the country now has 195 “ultra-high net worth individuals” (worth $30 million or more), the latest consequence of Vietnam’s 30-year transition from collectivism to capitalism.

Not only has capitalism made a strong comeback.  Vietnam leads every country in Southeast Asia except Thailand in high wealth club growth — with 15% more members than last year — according to a new UBS report.  Vietnam’s 195 (the top 0.0002% of the country’s population) are said to control an aggregate of $20 billion in assets (about 15% of GDP).

Anyone paying close attention to Vietnam wouldn’t be surprised the country surpassed Singapore, Indonesia, Malaysia, and the Philippines in growing the ultra wealthy.

But why did the Communist Party newspaper report it?  Probably because pragmatic economics are now deemed more important than political ideology in a country with bold global aspirations.  The article points out, for example, that Vietnam holds promise for private global bankers (which would help grow Vietnam’s wealth).

The UBS study attributes the ultra wealth growth to investments in infrastructure and burgeoning private consumption — driven by a growing middle class and social reforms.   But optimism and consumer confidence are just part of the story; the rise of Vietnam also is related to economic slowdown in China — where the number of ultra wealthy individuals dropped 5%.

Chess and Vietnam’s Promising Brainpower

A Chess News Agency report this week speaks volumes about the potential of one of the world’s most dynamic frontier markets:  22-year-old Vietnam grandmaster Le Quang Liem won the World Blitz Championship, not only establishing his country as a global chess power but also calling attention to its brainpower.

Along with the gold medal, Liem’s defeat of the silver and bronze medalists from Ukraine earned him $40,000 in prize money.  He started playing chess 15 years ago, about the time Vietnam started gearing up to be a player in the global economy.

The achievement at the chess table is the latest of many signs Vietnam’s population of nearly 100 million has the capacity to be a global economic leader.  It remains to be seen whether the country will cultivate its human capital — or stifle its people’s creative energy.

Unleashing Vietnam’s brainpower and creative energy depends on development of social infrastructure — especially health and education.  that will require, as one wry Hanoi visitor from the countryside observes, less attention to gleaming skyscrapers that adorn the capital city and a greater focus on better schools and hospitals.