Vietnam May Become More Than a Rising Tiger Faster than the Philippines

Taiwan News

If China had the late Deng Xiaoping then Vietnam had the late Nguyen Duy Cong aka Do Muoi. Reading the book From Third World to First had given details of the late Lee Kuan Yew's meetings with Do Muoi and other Vietnamese officers. Doi Moi was a movement that started Vietnam's economic recovery from once a poor Communist state into a glorious Communist state. It's because Do Muoi decided that it was time for a change in Vietnam's communist ways. The movement would defy what traditional communism taught. Deng defied Mao Zedong's protectionism. Now, Do Muoi would be an important part of Vietnam's development.

It was interesting to know how Do Muoi was a man ahead of his time. Do Muoi's instructions were to learn from Singapore. It's a very far cry from the anti-reform fools who say it out on social media. Some say that the Philippines can't learn anything from Singapore because of this and that. Vietnam is bigger than Singapore. Vietnam is a country rich in natural resources. It was often taught that Singapore had every excuse to open to the world because it wasn't rich in natural resources. It was also taught by third-world economists that foreign investments will equal the exploitation of natural resources. Not for Do Muoi--he took a different road. As Singaporean-Indian public policy maker, Kishore Mahbubani says, it's a third-world mentality. Lee Kuan Yew called it a third-world mentality to believe that foreign investors are foreign invaders. Lee Kuan Yew even assured Do Muoi that Vietnam may eventually become better than Singapore. Has Lee Kuan Yew's prediction come true?

Here's an interesting excerpt from the Vietnam Times that should show how foreign investments helped Vietnam from a poor country to a better country:

Once among the poorest countries in the world, its economy is now booming and the World Bank describes it as one of the most dynamic and emerging countries in the entire East Asia region, Business said in an article published last week, calling Vietnam a “new Asian tiger.”

Singapore’s DBS Group Research forecasts Vietnam's GDP growth to reach 8% in 2022, boosted by an accommodative monetary policy. The International Monetary Fund (IMF) has predicted that Vietnam will climb three spots to rank third in GDP among ASEAN member states this year, thanks to the fast-growing middle class and the rise of ultra-rich people.

Knight Frank’s latest Wealth Report estimates there were about 19,500 high-net-worth individuals in Vietnam in 2020, defined as those with assets of at least $1 million, the article said. By 2025, that number is expected to grow by almost 25% to top 25,000, it added.

Business Times attributed the robust growth of the economy to increasing flows of foreign investment into the country. Many Singapore companies, including CapitaLand and Keppel, have invested heavily in the country as they seize the abundant opportunities.

Some might lie that Vietnam had to wait until all its industries were better. On the contrary, Lee Kuan Yew proved that wrong in his book From Third World to First. Do Muoi's program was to attract more foreign investors to Vietnam. The increasing flows of FDI may explain why even Samsung from democratic South Korea even has a factory in communist Vietnam. I remembered having at least two Samsung phones manufactured in Vietnam. Why hasn't there been a phone yet manufactured in the Philippines by Filipinos? It's more than time to ask yourself that. Not especially after I met a fool on Facebook who has all the ill tidings about foreign investments yet he uses an iPhone. That iPhone may have been manufactured in either Vietnam or China for all we know.

Some people keep saying that nobody wants to invest because the Philippine Peso (PHP) is weak. However, did you know the Vietnamese Dong (VND) is much weaker than the PHP (read more here)? A bit more of a study will reveal these figures that as of today--the VND is only PHP 0.0024. The currency of Vietnam is weaker than the PHP. However, the Vietnamese economy is now stronger than the Philippine economy. People are investing in Vietnam instead of the Philippines. The strong PHP isn't as inviting as the weak VND? Why is that? The difference is because of one economic policy--free markets vs. protectionism. The Philippines has had a long rule of economic protectionism such as Carlos P. Garcia's "Filipino First Policy" which was practiced during 1973 and for a very long time. True, the negative list is being modified but we need more investments.

Vietnam took advantage of the depreciated VND for a very long time. The Philippines hasn't taken better advantage of the depreciating PHP. A depreciating PHP would've had an advantage as well (read here). The Philippines can learn from Vietnam's depreciated VND by actually increasing exports making imports more expensive. Foreign investors will take advantage of the weaker PHP like it did with the VND. Vietnam is rising higher despite the depreciated currency. What excuse will the Philippines have now since Vietnam's currency is considerably lower but their economy is now considerably higher?

References

Books

"From Third World to First--The Singapore Story: 1965-2000) by Lee Kuan Yew

Harpers Collins Publishers

Videos

"The Singapore economic model - VPRO documentary - 2009" by VRPO Documentary (September 8, 2018)

https://www.youtube.com/watch?v=ipQo3b2NU98&t=19s

Websites

"Business Times: Vietnam – A New Asian Tiger" by Rosy Huong (February 15, 2022)
https://vietnamtimes.org.vn/business-times-vietnam-a-new-asian-tiger-40033.html

"Vietnam’s Smartphone Shipments Grew 12% in 2021, and IDC Expects 25% Growth in 2022 Driven by Migration from 2G Feature Phones to 4G/5G Smartphones"

https://www.idc.com/getdoc.jsp?containerId=prAP48898122

Comments

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