Vietnam remains a place of seemingly limitless promise: experts

Hanoi (VNA) – Though Vietnam is said to have certain advantages, to maintain sustained success, the country should be a diligent student of not only the upsides, but also the lessons learnt of other countries, said Moritz Kraemer, former Global Chief Ratings Officer of Sovereign Ratings Group at S&P Global and currently the Chief Economist, Head of Research of Landesbank Baden Wuerttemberg (LBBW).

Speaking to Vietnam News Agency, the expert held that the world is in turmoil, and the old model of globalisation is severely tested as erstwhile reliable supply chains are ruptured and seem to refuse to heal. Moreover, inflation appears to be getting out of hand in much of the advanced economies as commodity prices soar and labor becomes increasingly scarce.

Moritz Kraemer, former Global Chief Ratings Officer of Sovereign Ratings Group at S&P Global (Photo: VNA)

He predicted that international companies will progressively search out new locations in their quest to diversify sources of supply, after they have become painfully aware of the risk that came with putting most of their eggs into one basket. A place more and more of them seem to find to fit that bill is Vietnam, a country offers political and monetary stability, economic openness, and an industrious workforce and still competitive labour cost, he stressed.

Vietnam will outgrow some Asian countries going forward as its net FDI inflows have averaged 5% of GDP annually, by far the highest ratio in the region, said Kraemer, asserting that investment is attracted by the still plentiful and relatively cheap labour, making Vietnam an exporting powerhouse.

Regarding lessons for Vietnam in economic development to ensure sustainable success, Kraemer said that right now, Vietnam is still full of promise. The recent ratings upgrade by S&P Global makes it likely that the country will be the next "rising star", he said.

"I believe that sustained success demands that the country's leaders remain vigilant in planning economic and human development strategies. The investors that are now flogging to Vietnam might otherwise move on 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 Head for the Asia Pacific region, underlined that in many ways, Ho Chi Minh City is a place of seemingly limitless promise.

By applying a suitable population policy, Vietnam managed to avoid the labour crunch and have an abundant workforce. However, the country's dynamic population will lead to other challenges, he held.

"This also underlines the urgent need for Vietnam to safeguard a sustainable path towards prosperity as well as to upgrade the population's skill level, speeding up the climb up the value chain,” the official stressed./.