Country of Analysis Projectp

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VIET NAMp
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South Vietnamese (before 1975)p
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North Vietnamese ± Current Government (after 1975)p
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EXECUTIVE SUMMMARYp
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When considering in doing business in a foreign country, especially poor countries, there are major factors that investors
should CONSIDER. In this report we will give the investors brief information on major factors that investors should look into
are:p
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1. Historyp
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2. Geographyp
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3. Languagep
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4. Culturep
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5. Legal structurep
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6. Governmentp
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7. Economic structurep
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8. Education systemp
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9. Religionp
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10. Populationp
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11. Demographicsp
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12. Physical infrastructurep
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13. Industrial structurep
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14. Trade agreements/associationsp
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15. Small business practices in the regionp
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16. Import/Export informationp
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17. Future of the countryp
p
Historyp
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Like any other old nation in the world, Viet Nam has her own legends concerning the origins of the race in the dawn of time.p
p
According to the National Annals, Viet Nam was formed when King Lac Long Quan, known as the "Dragon Lord of Lac" or
the "Dragon Lord of the Seas", married Princess Au Co, a Chinese immortal and descended from the High Mountains. From
this union, one hundred boys were hatched from one hundred eggs carried in a pouch by Au Co; and all the sons were
handsome and stalwart. They soon established a nation that stretched from southern China to northern Indonesia. However,
the King and the Princess became convinced that their different origins would ultimately make them unhappy, so they
separated. Princess Au Co took 50 of the sons with her back into the mountains while King Lac Long Quan took the other 50
sons and ruled over the lowlands. After the King died in 2879 B.C., his eldest son, Hung Vuong established the Hung
dynasty, and he is regarded as the real founder of the Vietnamese nation and of the first Vietnamese dynastyp
p
For the next thousand years, Vietnam was mostly under Chinese rule. Early independence movements such as of those
of the Trung Sisters and of Lady Trieu were only brief successful. It was independent as Van Xuan under the Anterior Ly
Dynasty between 544 and 602. By the early 10th century, Vietnam had gained autonomy, but not independence, under
Khuc family. In 938 CE, a Vietnamese lord named Ngo Quyen defeated Chinese forces at the Bach Dang River and
regained independence after 10 centuries under Chinese control. Renamed as Đҥi ViӋt, the nation went through a golden
era during the Ly and Tran Dynasties. During the rule of the Tran Dynasty, Đҥi ViӋt repelled three Mongol invasions.
Buddhism flourished and became the state religion. Following the brief Ho Dynasty, Vietnamese independence was
momentarily interrupted by the Chinese Ming Dynasty, but was restored by Le Loi, the founder of the Le Dynasty; Vietnam
reached its zenith in the Le Dynasty of the 15th century, especially during the reign of Emperor Le Thanh Ton (1460±1497).
Between the 11th and 18th centuries, the Vietnamese expanded southward in a process known as southward expansion.
They eventually conquered the kingdom of Champa and part of the Khmer Empire.p
p
Towards the end of the Le Dynasty, civil strife engulfed much of Vietnam. First, the Chinese-supported Mac Dynasty
challenged the Le Dynasty's power. After the Mҥc Dynasty was defeated, the Le Dynasty was reinstalled, but with no actual
power. Power was divided between the Trӏnh lord in the North and the Nguyen lord in the South, who engaged in a civil war
for more than four decades. During this time, the Nguyen expanded southern Vietnam into the Mekong Delta, annexing the
Champa in the central highlands and the Khmer land in the Mekong. The civil war ended when the Tây Sơn brothers
defeated both and established their new dynasty. However, their rule did not last long and they were defeated by the
remnants of the Nguyen Lords led by Nguyen Anh with the help of the French. Nguyen Anh unified Vietnam, and established
the Nguyen Dynasty, ruling under the name Gia Long.p
p
The conquest of Vietnam by France began in 1858 and was completed by 1884. It became part of French Indochina in
1887. Vietnam declared independence after World War II, but France continued to rule until its 1954 defeat by Communist
forces under Ho Chi MINH. Under the Geneva Accords of 1954, Vietnam was divided into the Communist North and anti-
Communist South. US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the
government, but US armed forces were withdrawn following a cease-fire agreement in 1973. Two years later, North
Vietnamese forces overran the South reuniting the country under Communist rule. Despite the return of peace, for over a
decade the country experienced little economic growth because of conservative leadership policies. However, since the
enactment of Vietnam's "doi moi" (renovation) policy in 1986, Vietnamese authorities have committed to increased economic
liberalization and enacted structural reforms needed to modernize the economy and to produce more competitive, export-
driven industries. The country continues to experience protests from various groups - such as the Protestant Montagnard
ethnic minority population of the Central Highlands and the Hoa Hao Buddhists in southern Vietnam over religious
persecution. Montagnard grievances also include the loss of land to Vietnamese settlers.p
p
However, independence came at cost. From a country called one of four dragon of Asia, Viet name is now called a third
world country of Asia and the World. Ho Chi Minh City, formerly known as Saigon, was praised as the ³Pearl of the Orient´,
was known as an important trade center for Chinese, Japanese and Western merchants. It had also been christened the
³Paris of Asia´ for its wide boulevards lined with the stately trees and magnificent French villas. It is now no longer a top
tourist city of Asia. It is a normal city like other average city.p
p
Geographyp
Vietnam is approximately 128,066 square miles in area (not including Hoang Sa and Truong Sa islands), larger than Italy
and almost the size of Germany. The perimeter of the country running along its international boundaries is 4,639 km
(2,883 mi). Shaped like an elongated S, Vietnam stretches the length of the Indochinese Peninsula and covers a surface
area of 128,000 square miles, making it roughly the size of Italy or, in the U.S., New Mexico. China lies to the north, Laos
and Cambodia to the west, and the South China Sea to the east. Long and narrow on a north-south axis, Vietnam is about
twice the size of Arizona. The Mekong River delta lies in the south. For convenience, the country can be thought of as
comprising three unique areas: north, central, and south. The north is known for its alpine peaks, the Red River Delta, the
plains of Cao Bang and Vinh Yen, enchanting Halong Bay, and historic Hanoi as well as for the diversity of its ethno-
linguistic minorities.p
Over the past three centuries, Saigon, a modern city of Vietnam, once praised as the ³Pearl of the Orient´, was known as
an important trade center for Chinese, Japanese and Western merchants. This is the reason explaining why Vietnam had
been invading by other countries in the world. Vietnam is a good location for them to conquer business and military of Asia.p
p
Languagep
p
The people of Vietnam speak Vietnamese as a native language. In its early history, Vietnamese writing used Chinese
characters. In the 13th century, the Vietnamese developed their own set of characters called Chӳ nôm. The celebrated epic
Đoҥn trưӡng tân thanh (TruyӋn KiӅu or The Tale of Kieu) by NguyӉn Du was written in Chӳ nôm. During the French colonial
period, Quӕc ngӳ, the romanized Vietnamese alphabet used for spoken Vietnamese, which was developed in 17th century
by Jesuit Alexandre De Rhodes and several other Catholic missionaries, became popular and brought literacy to the
masses.p
p
The origin of the Vietnamese language is the subject of debate among linguists. It is usually put in a language family by
itself along with Muong, a language spoken by a group of highlanders in North Viet Nam. Although it is evident that
Vietnamese did not have its origins in Chinese, the influence of China has always been strong in Viet Nam, and thousands
of Chinese words have been incorporated into the Vietnamese language. Many of these words reflect the nature of the
northern influence throughout the early period of Chinese domination. Chinese philosophic, literary, religious, governmental
and military terms are found in great numbers in Vietnamese, although the pronunciation has changed and their relationship
to Chinese is not always clearly discernable. Vietnamese is basically a monosyllabic language having six tones, which give
the language a sing-song effect. A word can be repeated with any one of six tones to indicate six different meanings. For
example, the word ma has six different meanings according to the tone which the word carries: phantom, ghost; cheek; but,
which, who; tomb; horse; young rice seedling.p
p
The French language, a legacy of colonial rule, is still spoken by some older Vietnamese as a second language, but is
losing its popularity. Vietnam is also a full member of the Francophone. Russian - and to a much lesser extent German,
Czech, or Polish ² is sometimes known among those whose families had ties with the Soviet bloc. In recent years, English
is becoming more popular as a second language. English study is obligatory in most schools. Chinese and Japanese have
also become more popular.p
p
Culturep
p
The richness of Vietnam's origins is evident throughout its culture. Spiritual life in Vietnam is grand panoply of belief
systems, including Confucianism, Taoism, Buddhism, Christianity, and Tam Giao (literally 'triple religion'), which is a blend of
Taoism, popular Chinese beliefs, and ancient Vietnamese animism.p
p
The culture of Vietnam has been influenced by neighboring China. Due to Vietnam's long association with the south of
China, one characteristic of Vietnamese culture is filial duty. Education and self-betterment are highly valued. Historically,
passing the imperial Mandarin exams was the only means for Vietnamese people to socially advance themselves.p
p
In the socialist era, the cultural life of Vietnam has been deeply influenced by government-controlled media and the
cultural influences of socialist programs. For many decades, foreign cultural influences were shunned and emphasis placed
on appreciating and sharing the culture of communist nations such as the Soviet Union, China, Cuba and others. Since the
1990s, Vietnam has seen a greater exposure to Southeast Asian, European and American culture and media.p
p
The most important festival of the year is Tet, a week-long event in late January or early February that heralds the new
lunar year and the advent of spring. Celebration consists of both raucous festivity (fireworks, drums, gongs) and quiet
meditation. In addition to Tet, there are about twenty other traditional and religious festivals each year.p
p
Vietnamese architecture expresses a graceful aesthetic of natural balance and harmony that is evident in any of the
country's vast numbers of historic temples and monasteries. The pre-eminent architectural form is the pagoda, a tower
comprised of a series of stepped pyramidal structures and frequently adorned with lavish carvings and painted
ornamentation. Generally speaking, the pagoda form symbolizes the human desire to bridge the gap between the
constraints of earthly existence and the perfection of heavenly forces. Pagodas are found in every province of Vietnam. One
of the most treasured is the Thien Mu Pagoda in Hue, founded in 1601 and completed more than two hundred years later. In
North Vietnam, the pagodas that serve as the shrines and temples of the Son La Mountains are especially worth visiting. In
South Vietnam, the Giac Lam Pagoda of Ho Chi Minh City is considered to be the city's oldest and is notable as well for its
many richly-carved jackwood statues.p
p
As a language, Vietnamese is exceptionally flexible and lyrical, and poetry plays a strong role in both literature and the
performing arts. Folk art, which flourished before French colonization, has experienced resurgence in beautiful woodcuts,
village painting, and block printing. Vietnamese lacquer art, another traditional medium, is commonly held to be the most
original and sophisticated in the world. Music, dance, and puppetry, including the uniquely Vietnamese water puppetry, are
also mainstays of the country's culture.p
p
Although rice is the foundation of the Vietnamese diet, the country's cuisine is anything but bland. Deeply influenced by
the national cuisines of France, China, and Thailand, Vietnamese cooking is highly innovative and makes extensive use of
fresh herbs, including lemon grass, basil, coriander, parsley, laksa leaf, lime, and chili. Soup is served at almost every meal,
and snacks include spring rolls and rice pancakes. The national condiment is nuoc mam, a piquant fermented fish sauce
served with every meal. Indigenous tropical fruits include bananas, pineapples, coconuts, lychees, melons, mandarin
oranges, grapes, and exotic varieties like the three-seeded cherry and the green dragon fruit.p
p
One of the most popular Vietnamese traditional garments is the Áo dài (traditional long dress), worn often for special
occasions such as weddings or festivals. White Áo dài is the required uniform for girls in many high schools across Vietnam.
Áo Dài was once worn by both genders but today it is worn mainly by females, except for certain important traditional
culture-related occasions where some men do wear it.p
p
Among countless other traditional Vietnamese occasions, the traditional Vietnamese wedding is one of the most
important. Many of the age-old customs in a Vietnamese wedding continue to be celebrated by both Vietnamese in Vietnam
and overseas, often combining both western and eastern elements.p
p
Legal structurep
p
Despite its rapid move towards a free-market economy, Vietnam remains a socialist country with a single political party,
the Communist Party. Approximately 90% of the National Assembly¶s members represent the Communist Party and the rest
are being encouraged to join. In April 1992, an almost entirely re-written constitution was adopted. The preamble still speaks
of the Communist Party¶s leadership, but the overall intention seems to be to provide a greater separation of party and State
institutions and give more power to the latter.p
p
Governmentp
p
The politics of Vietnam takes place in a framework of a single-party socialist republic. The central role of the Communist
Party of Vietnam is reaffirmed in the current constitution, adopted in April 1992. Though Vietnam remains a single-party
state, adherence to ideological orthodoxy has become less important than economic development as a national priority.p
p
All Vietnamese political organizations are under Vietnamese Communist Party control. There is no separation of powers
between executive, legislative and judicial branches. Communist Party policy is set by a fourteen-member Politburo. The top
four positions in the Politburo are held by Party General Secretary Nông Đӭc Mҥnh, General Minister of Public Security Le
Hong Anh, State President NguyӉn Minh TriӃt, and Prime Minister NguyӉn Tҩn Dũng. The members of the Politburo were
selected by the party's 160-member central committee in April 2006. The Party Secretariat, which consists of eight Politburo
members, oversees day-to-day policy implementation.p
p
Aside from the Communist Party, the most powerful institutions within the Vietnamese government are the executive
agencies created by the 1992 constitution: the offices of the president and the prime minister. The Vietnamese President
functions as head of state but also serves as the nominal commander of the armed forces and chairman of the Council on
National Defense and Security. The Prime Minister of Vietnam heads a cabinet currently composed of three deputy prime
ministers and the heads of twenty-six ministries and commissions, all confirmed by the National Assembly.p
p
Notwithstanding the 1992 Constitution's reaffirmation of the central role of the Communist Party, the National Assembly,
according to the Constitution, is the highest representative body of the people and the only organization with legislative
powers. It has a broad mandate to oversee all government functions. Once seen as little more than a rubber stamp, the
National Assembly has become more vocal and assertive in exercising its authority over lawmaking, particularly in recent
years. However, the National Assembly is still subject to Communist Party direction. About 80% of the deputies in the
National Assembly are Communist Party members. The assembly meets twice yearly for seven to ten days each time;
elections for members are held every five years. There is a separate judicial branch, but it is relatively weak. Overall, there
are few lawyers; and trial procedures are rudimentary.p
p
The Socialist Republic of Vietnam is governed through a highly centralized system dominated by the Communist Party of
Vietnam (CPV) (Đҧng cӝng sҧn ViӋt Nam), which was formerly the Vietnamese Labor Party (Đҧng lao đӝng ViӋt Nam)
(1951-1976). The Socialist Republic of Vietnam exists today as a communist state.p
p
Although there has been some effort to discourage membership in overlapping party and state positions, this practice
still continues to a certain extent. Senior Politburo members such as NguyӉn Minh TriӃt, NguyӉn Tҩn Dũng, NguyӉn Phú
Trӑng, Lê Hӗng Anh concurrently also hold high positions in the government and the National Assembly. In addition, the
Party's Central Military Commission, which is composed of select Politburo members and additional military leaders,
determines military policy.p
p
A Party Congress meets every five years to set the direction of the party and the government. The Tenth National
Congress of the Communist Party of Vietnam opened on April 18, 2006, and concluded on April 25, 2006, was attended by
1,176 delegates.The 160-member Central Committee, which was elected by the Party Congress, usually meets at least
twice a year.p
p
The Socialist Republic of Vietnam is a single-party state. A new state constitution was approved in April 1992, replacing
the 1975 version. The central role of the Communist Party was reasserted in all organs of government, politics and society.
Only political organizations affiliated with or endorsed by the Communist Party are permitted to contest elections. These
include the Vietnamese Fatherland Front, worker and trade unionist parties. Although the state remains officially committed
to socialism as its defining creed, the ideology's importance has substantially diminished since the 1990s. The President of
Vietnam is the titular head of state and the nominal commander in chief of the military of Vietnam, chairing the Council on
National Defense and Security. The Prime Minister of Vietnam Nguyen Tan Dung is the head of government, presiding over
a council of ministers composed of 3 deputy prime ministers and the heads of 26 ministries and commissions.p
p
The National Assembly of Vietnam is the unicameral legislature of the government, composed of 498 members. It is
superior to both the executive and judicial branches. All members of the council of ministers are derived from the National
Assembly. The Supreme People's Court of Vietnam, which is the highest court of appeal in the nation, is also answerable to
the National Assembly. Beneath the Supreme People's Court stand the provincial municipal courts and the local courts.
Military courts are also a powerful branch of the judiciary with special jurisdiction in matters of national security. All organs of
Vietnam's government are controlled by the Communist Party. Most government appointees are members of the party. The
General Secretary of the Communist Party is perhaps one of the most important political leaders in the nation, controlling the
party's national organization and state appointments, as well as setting policy.p
p
Economic structurep
p
Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war,
the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Economic stagnation
marked the period after reunification from 1975 to 1985. In 1986, the Sixth Party Congress approved a broad economic
reform package that introduced market reforms and set the groundwork for Vietnam's improved investment climate.
Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and
significantly reducing poverty. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and
temporarily allowed opponents of reform to slow progress toward a market-oriented economy. GDP growth averaged 6.8%
per year from 1997 to 2004 even against the background of the Asian financial crisis and a global recession. Since 2001,
Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have
moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-
driven industries. The economy grew 8.5% in 2007. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and
entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more rapid changes in
Vietnam's trade and economic regime.p
p
Historically, Vietnam has been an agricultural civilization based on wet rice cultivating. The Vietnam War destroyed
much of the economy of Vietnam. Upon taking power, the Government created a planned economy for the nation.
Collectivization of farms, factories and economic capital was implemented, and millions of people were put to work in
government programs. For a decade, united Vietnam's economy was plagued with inefficiency and corruption in state
programs, poor quality and underproduction and restrictions on economic activities and trade. It also suffered from the trade
embargo from the United States and most of Europe after the Vietnam War. Subsequently, the trade partners of the
Communist blocs began to erode. In 1986, the Sixth Party Congress introduced significant economic reforms with market
economy elements as part of a broad economic reform package called "đәi mӟi" (Renovation). Private ownership was
encouraged in industries, commerce and agriculture. Vietnam achieved around 8% annual GDP growth from 1990 to 1997
and continued at around 7% from 2000 to 2005, making it the world's second-fastest growing economy. Simultaneously,
foreign investment grew threefold and domestic savings quintupled. Manufacturing, information technology and high-tech
industries form a large and fast-growing part of the national economy. Vietnam is a relative newcomer to the oil business,
but today it is the third-largest oil producer in Southeast Asia with output of 400,000 barrels per day (64,000 m³/d). Vietnam
is one of Asia's most open economies: two-way trade is around 160% of GDP, more than twice the ratio for China and over
four times India's.p
p
Vietnam's exports to the US increased 900% from 2001 to 2007. Vietnam joined the WTO in January 2007, following
over a decade long negotiation process. WTO membership has provided Vietnam an anchor to the global market and
reinforced the domestic economic reform process. Among other benefits, accession allows Vietnam to take advantage of the
phase-out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on
1 January 2005. Agriculture's share of economic output has continued to shrink, from about 25% in 2000 to less than 20% in
2007. Deep poverty, defined as a percent of the population living under $1 per day, has declined significantly and is now
smaller than that of China, India, and the Philippines. Vietnam is working to create jobs to meet the challenge of a labor
force that is growing by more than one-and-a-half million people every year. In an effort to stem high inflation which took off
in 2007, early in 2008 Vietnamese authorities began to raise benchmark interest rates and reserve requirements. Hanoi is
targeting an economic growth rate of 7.5-8% during the next four years.p
p
Like China, Vietnam has made a rapid transition from a command economy to one that is holding for open-market free
trading. But it still has a very long way to go to get there. In spite of this, there are a vast number of foreign companies that
can see the enormous market potential for business investments in Vietnam.p
p
In spite of considerable efforts to industrialize the country especially in the north, Vietnam¶s economy is still dominated
by agricultural production. This is also the sector where economic reforms have so far had most success. Vietnam recently
turned from being a rice-importing nation into the world¶s third largest rice-exporter.p
p
Most importantly, foreign investment is now encouraged and the new constitution guarantees that enterprise with foreign
invested capital will not be nationalized. A number of laws have been passed to create the legal framework for foreign
investment. Bilateral investment protection treaties and double taxation treaties have also been signed with a number of
countries.p
p
While the country¶s long-term growth prospects remains good, short-term problems such as the lack of adequate
infrastructure, especially in the transport network and communications system as well as in the financial sector, and
governmental bureaucracy remain handicaps. The World Bank has suggested that Vietnam will have to allocate at least
US$7 billion to US$10 billion for infrastructure development by the year 2000.p
p
Vietnam is a relative newcomer to the oil business, but today it is the third-largest oil producer in Southeast Asia with
output of 400,000 barrels per day (64,000 m³/d). Vietnam is one of Asia's most open economies: two-way trade is around
160% of GDP, more than twice the ratio for China and over four times India's.p
p
Vietnam is still a relatively poor country with an annual GDP of US$280.2 billion at purchasing power parity (2006
estimate). This translates to a purchasing power of about US$3,300 per capita (or US$726 per capita at the market
exchange rate). Inflation rate was estimated at 7.5% per year in 2006. Deep poverty, defined as a percent of the population
living under $1 per day, has declined significantly and is now smaller than that of China, India, and the Philippines.p
p
As a result of several land reform measures, Vietnam is now the largest producer of cashew nuts with a one-third global
share and second largest rice exporter in the world after Thailand. Vietnam has the highest percent of land use for
permanent crops, 6.93%, of any nation in the Greater Mekong sub-region. Besides rice, key exports are coffee, tea, rubber,
and fishery products. However, agriculture's share of economic output has declined, falling as a share of GDP from 42% in
1989 to 20% in 2006, as production in other sectors of the economy has risen. According to the CIA World Fact Book, the
unemployment rate in Vietnam is 4.3%. Among other steps taken in the process of transitioning to a market economy,
Vietnam in July 2006 updated its intellectual property legislation to comply with TRIPS. Vietnam was accepted into the WTO
on November 7, 2006. Vietnam's chief trading partners include China, Japan, and Australia, ASEAN countries, the U.S. and
Western European countries.p
p
Education systemp
p
Vietnam's education system is divided into 5 categories: pre-primary, primary, intermediate, secondary, and higher
education. The normal starting time of schools in Vietnam is at 7 o'clock or 7:30. The finish time depends on the levels and
usually at 4 o'clock, which means longer hours of studying than other countries. Vietnam is a country where education is a
top priority. Vietnam is a developing country and the government is trying to improve the education in all cities in Vietnam.
But mostly, people come to the main cities to learn, like Ho Chi Minh City or Ha Noi the capital city. Many Vietnamese
cannot afford to pay for their child to go to schools that why the government provides free education to yr 5.p
University Entrance Examination is very important in Vietnamese students' lives. High school graduates have to take it
after the SGE and get high results to be admitted to universities. The pressure on the candidates remains very high despite
the measures that have been taken to reduce the heat around these exams, since securing a place in a public university is
considered a major step towards a successful career for young people, especially those from rural areas or disadvantaged
families. In the year 2004, it was estimated that nearly 1 million Vietnamese students took the UEE, but on average only 1
out of 5 candidates succeeded. Normally, candidates take 3 exams; each lasts 180 minutes for the fixed group of subjects
they choosep
According to Vietnam's Ministry of Education and Training, there are currently 23 non-public universities, accounting for 11%
of the total number of universities. These non-public universities are currently training 119,464 students, or 11.7% of the
total number of students. The government is planning to increase the number of non-public universities to 30% by 2011.p
p
Foreign educational institutions are increasingly open in Vietnam. Most of their fields are English language and business,
such as RMIT, and The University of Hawaii. As the second country after China with sustained economic growth during the
first years of the 21st century, Vietnam is currently revisiting its education system. It recognized the increasing role of
English as the language of business and the importance of international cooperation to help adapt the education system,
notoriously slow in change management, to the rapid pace of its economy. Running a foreign education system in Vietnam
is relatively challenging. Quality control and affordability are key issues, let alone the challenges related to dealing with a
bureaucracy that is still figuring how to deal with the forces of change due to globalization. The entire higher education
system is facing several crises such as out-of-date course curricula, a lecturer-centered method of teaching and learning,
research activities separated from teaching activities, a big gap between theory and practice that leads to a large number of
graduates being unable to find a job, and the fact that degrees from Vietnamese universities are not recognized worldwide.
There is, therefore, a huge demand for quality educational services.p
p
Currently, only public schooling costs for students from grades 1-5 are subsidized by the government at 50% of the total
tuition. All other schooling costs for students (100%) past grade 6 is at the parents' expense. The drop-out rate after grade
five only increases as the student reaches university age due to lack of family funding. The average monthly salary of local
Vietnamese public teachers is between 60USD to 100USD and many supplement their income by working hours in the
private language sector or home schooling in their off hours. Public schools are under-funded, but have made great strides
in attempting to improve their facilities in the larger cities.p
p
Private language centers for English language education are in high demand in the larger cities of Hanoi and Ho Chi
Minh City. Students have flooded these schools with the expectation of greater marketability in the job market. These
classes are usually taught by foreign expats and generally carry a salary between 10USD-20USD per hour depending on
both the qualifications of the teacher and the quality of the school. Lower educational standards in some of the lower paying
schools have resulted in less than qualified teachers (known to the local community as backpacker teachers) to fill their
ranks.p
p
Religionp
p
For much of Vietnamese history, Mahayana Buddhism, Taoism and Confucianism have strongly influenced the religious
and cultural life of the people. About 85% of Vietnamese identify with Buddhism, though not all practice on a regular basis.
About 8% of the population is Christians (about six million Roman Catholics and fewer than one million Protestants,
according to the census of 2007). Christianity was introduced first by the Portuguese and the Dutch traders in the 16th and
17th centuries, and then further propagated by French missionaries in the 19th and 20th centuries, and to a lesser extent, by
American Protestant missionaries during the presence of American forces during the 1960s and early 1970s. The largest
Protestant churches are the Evangelical Church of Vietnam and the Montagnard Evangelical Church. Two thirds of
Vietnam's Protestants are ethnic minorities.p
p
The vast majority of Vietnamese people of Asian religions practice Ancestor Worship. 85% is nominal/secular Buddhists
including predominant 83% East Asian Buddhist or "Triple religion" (80% of people are worship the mixture of Mahayana
Buddhism mainly, Taoism, Confucianism with Ancestor Worship; 2% Hòa Hҧo with 1% of some new Vietnamese-Buddhist
sects as Tӭ Ân HiӃu Nghĩa, Pure Land Buddhist, etc) and 2% Theravada Buddhism, mainly among Khmer people but the
census of Government showed that only over 10 million people have taken refuge in the Three Jewels; 8% Christians (7%
Catholics and 1% Protestants); 3% Caodaism; 2.5% Tribal animism; less than 70 thousand Muslims (mainly Cham people);
small Hindu communities (over 50 thousand people) and a small number of Baha'is and Jews.p
p
Populationp
p
Recent census estimates the population of Vietnam at beyond 84 million. Vietnamese people, also called "Viet" or
"Kinh", account for 86.2% of the population. Their population is concentrated in the alluvial deltas and coastal plains of the
country. A homogeneous social and ethnic majority group, the Kinh exerts political and economic control. There are more
than 54 ethnic minority groups throughout the country, but the Kinh are purveyors of the dominant culture. Most ethnic
minorities, such as the Muong, a closely related ethnic of the Kinh, are found mostly in the highlands covering two-thirds of
the territory. Before the Vietnam War, the population of the Central Highlands was almost exclusively Degar (over 40 hill
tribal groups). The Hoa (ethnic Chinese) and Khmer Krom are mainly lowlanders. The largest ethnic minority groups
include the Hmong, Dao, Tay, Thai, and Nung. From 1978 to 1979, some 450,000 ethnic Chinese left Vietnam.p
p
Demographicsp
p
Vietnam is a country that has largest population of Asia after China and the largest growing population in the world. The
government tries to restrict its population growth by using various methods. However, the Vietnamese birth rate is still
growing and make the country extreme poor.p
p
The Vietnamese government recognizes 54 ethnic groups, of which the Viet is the largest; according to official
Vietnamese figures (1999 census), ethnic Vietnamese account for 86% of the nation's population. The ethnic Vietnamese
inhabit a little less than half of Vietnam, while the ethnic minorities inhabit the majority of Vietnam's land (albeit the least
fertile parts of the country). The Khmer Krom is found in the delta of the Mekong River, in the south of Vietnam, where they
form in many areas the majority of the rural population. They live in an area which was previously part of Cambodia and
which Vietnam conquered in the 17th and 18th centuries. Official Vietnamese figures put the Khmer Krom at 1.3 million
people.p
p
Vietnam's approximately 1 million ethnic Chinese, constitute one of Vietnam's largest minority groups. Long important in
the Vietnamese economy, Vietnamese of Chinese ancestry have been active in rice trading, milling, real estate, and banking
in the south and shopkeeping, stevedoring, and mining in the north. Restrictions on economic activity following reunification
in 1975 and the subsequent but unrelated general deterioration in Vietnamese-Chinese relations sent chills through the
Chinese-Vietnamese community.p
p
The relation between China and Vietnam also declined in this period, with Vietnam siding with the Soviet Union against
China in the Chinese-Soviet split. Tensions peaked when Vietnam invaded Cambodia, an ally of China, to depose Pol Pot,
resulting in a Chinese invasion of Vietnam in 1979. In 1978-79, some 450,000 ethnic Chinese left Vietnam by boat as
refugees (many officially encouraged and assisted) or were expelled across the land border with China. However in recent
years the government has performed an about turn and is encouraging overseas Hoa to return and invest. The central
highland peoples commonly termed Degar or Montagnards (mountain people) comprise two main ethnolinguistic groups--
Malayo-Polynesian and Mon-Khmer. About 30 groups of various cultures and dialects are spread over the highland territory.
Other minority groups include the Cham--remnants of the once-mighty Champa Kingdom, conquered by the Vietnamese in
the 15th century, Hmong, and Tai ("Thái").p
p
 Vietnamese is the official language of the country. It is a language pertaining to the Austroasiatic language family, a
language family also including Khmer, Mon, etc. Vietnamese was spoken by 65.8 million people in Vietnam at the 1999
census. Another 1.6 million Vietnamese speakers are found outside of Vietnam. Thus Vietnamese is the most spoken
language of the Austroasiatic family, being spoken by three times more people than the second most spoken language of
the family, Khmer. Both languages, however, are extremely different: under the influence of Chinese, Vietnamese has
become a tonal language, while Khmer has remained non-tonal. Vietnamese was heavily influenced by Chinese and a great
part of the Vietnamese vocabulary is Chinese, while Khmer was heavily influenced by Sanskrit and Pali and a great part of
its vocabulary is now made up of Indian words, so that both languages look very dissimilar on the surface. Since the early
20th century, the Vietnamese have used a Romanized script introduced by the Frenchp
p
Physical infrastructurep
p
The Vietnamese government has indicated a commitment to meeting these increased needs with new infrastructure
projects. Several projects are underway and many more are in the planning stage. Given the urgency of inadequate
infrastructure to support the rapid growth of exports and business expansion, and the long lead times from project planning
through completion, many investors, donors, and local and national government officials are concerned about the likely
impact of a projected infrastructure shortfall on the country¶s economic development.p
p
As members of a number of coalitions, and as individual companies, Nike, APL, Maersk and other businesses are
committed to actively engaging the Vietnamese government on the urgency of building new infrastructure. Through funding
the study tour, the sponsors hope to provide the government with information from multiple sources, which will provide
insight into the expected needs regarding infrastructure, as well as areas where associations have the greatest concern.
Key Vietnamese government officials could gain additional insight into the importance and complexity of this issue by
participating in a study mission that compares/contrasts Vietnam and another country in this area. Given China and
Singapore¶ rapid growth, especially in international trade, its commitment to infrastructure development, and how
infrastructure projects are funded through the PPP model, focus on these countries would be valuable.p
p
VNCI is working with government agencies to develop a legal framework that will improve the ability of local authorities
to finance infrastructure through bond issuances and support the PPP model with the proceeds to build world class
infrastructure. Further discussions on policy options to encourage the mobilization of private capital, project development
and project management will continue in parallel with this mission to find the right solutions for Vietnam¶s infrastructure
development.p
p
Industrial structurep
p
The geographical spread of industrial output in Vietnam is rather than limited. In general industrial activity is mostly centered
on two regions, the Red River and the South East Region, although other regions such as the Mekong Delta also contribute
significantly to the industrial output. The Red River Delta in the north, including the capital of Hanoi as well as the port of Hai
Phong, generates around 18% of the total industrial output. The south East region includes the major city of Sai Gon and it
is account for more than 50% of the total national industrial output. Vietnamese industry can be divided into 2 sectors called
sate sector and non-state sector. These two sectors can again be separated into several sub-sectors. The state sector
includes a central and a local sector. In the central sector, enterprises are established either by Prime Minister or any of the
Ministries while the local sector is established by any of the People Committees. The non-state sector consists of four
different sub-sectors, which are collective, private, household, and Foreign Invested Enterprises. In general, state
enterprises are more involved in heavy industry and non-state are involved in light industry.p
p
Over the last 9 years, Vietnamese industry has never fall below 7 percent. It was dropped to 7.2 percent during 1998 to
1999 but was recovered in 2000 about 15.2 percent. In 1995 the total industrial value was 103,374.7 billion VND, about $
6,044,499,343.88 USD in 1995 and was 300,000 billion VND ($ 17,541,524,213.98 USD) in 2003.p
p
Electronic industry is the biggest industry in Vietnam. It has been in existence since the seventies when Sanyo opened a TV
and radio factory that is now run by Viettronics Bien Hoa under a licensing agreement to produce video-audio equipment for
the home market. However, it is only since the country¶s break with the Soviet Union in the early nineties that the industry
has shown significant growth. This growth has been mainly through a series of joint ventures with Korean, Japanese and
Taiwanese companies. Vietnam exports of electronic goods in 2001 according to the UN were: 32% to Japan; 21% to the
Philippines; 16% to Thailand; 7% to Malaysia; 4% to Singapore; 19% to other countries.p
p
Seaprodex is a second largest company in Hanoi, Vietnam. The company sells all kinds of seafood and distributes its
products to the whole world. It has an export volume of $12 millions in 2003, $15 millions in 2004, and aiming for $20 million
in 2005. The company currently exports to the US, Japan, Australia, Korea, Hong Kong, and some EU countries, mostly Italy
and HACCPp
p
Trade agreements/associationsp
p
Vietnam has moved toward a more open trading system since it introduced market-oriented reforms. As a result, imports
and exports have expanded rapidly. While the Government of Vietnam is eliminating some non-tariff barriers and is reducing
tariffs in preparation for meeting its goals under AFTA (ASEAN Free Trade Area), there is still a concern that high trade
barriers will be maintained in the next few years to protect certain sectors. At the same time, export-oriented industries are
becoming a higher priority in the government¶s economic development plans. Eventually, these seemingly contradictory
development strategies will need to be reconciled. Moreover, formal rules in many areas of the trading system have not
been defined; while in others, the measures and their practical interpretations are frequently changing. Companies are
advised to seek current and specific information about the issues discussed below in planning their market entry
approaches. Now Vietnam does trade with all countries in the world.p
p
Since the United States and Vietnam signed a trade pact Wednesday that removes one of the last major hurdles in Hanoi¶s
bid to join the world Trade Organization, Vietnam offers many opportunities for U.S. small-to-mid-sized businesses. The
U.S.-Vietnam Bilateral Trade Agreement and Vietnam's admittance to the World Trade Organization have opened new
doors of commerce and sent U.S. exports to Vietnam soaring. Immediately after the country joined the WTO in 2007, U.S.
exports to Vietnam grew by an impressive 73 percent to reach $1.9 billion.p
p
Small Business Practices in the regionp
p
Small business practices in Vietnam are conducted in a similar fashion to these of China, Japan and Korea rather than their
Southeast Asian counterparts. Pride and tact are important to bear in mind, as practices tend to be formalized more so than
in Western countries. Often it is best to be introduced rather than approach the person with whom business is intended for
fear of suspicion. Negotiations and settlements may take longer as the Vietnamese like to examine contracts thoroughly.
Formal dress is common but in summer months the dress tends to be more casual. It is important to be on time for business
appointments as the Vietnamese consider lateness rude.p
p
Import/Export informationp
p
To make the country¶s import and export regulations more stable and predictable to importers and exporters, the
government of Vietnam promulgated an import and export policy under which lists of imports and exports subject to
restrictions and license.p
p
A few years ago, the major exportable commodities of Vietnam are crude oil, marine products, coffee, rubber, and tea. The
exports partners of the country are Germany, Japan, Singapore, Taiwan, Hong Kong, South Korea and China. The total
export value of Vietnam reached to US$19.9 billion in 2003, a 19 percent year-one-year increase and almost a double of the
value since 1999. The major importable items of the Vietnam are machine products, petroleum products, fertilizer, steel
products, cotton, grain, cement, and motorcycles. The imports partners of the country are Singapore, South Korea, France,
Japan, Taiwan and Hong Kong. In total, Viet name imported for US$25,227 millions in 2003, of which the domestic sector
accounted for US$16,412 millions. However, after The United States and Vietnam signed a trade pact Wednesday that
removes one of the last major hurdles in Hanoi¶s bid to join the world Trade Organization, USA becomes the largest export
partner of Vietnam. Vietnam has exported for US$3,939 millions.p
p
Future of the Countryp
p
There is considerable debate about the economic future of Vietnam. Pessimists focus on the country's inadequate physical
infrastructure and its powerful state bureaucracy which makes doing business in Vietnam complex and difficult. They also
point to persisting ambiguities in Vietnam's evolving legal structure and issues of corruption. However, I believe that Vietnam
will become one of four dragon of Asia soon, Ho Chi Minh City, formerly known as Saigon, will be praised as the ³Pearl of
the Orient´ again.p
p
There are many reasons to be optimistic about Vietnam and its economic future. First, Vietnam has the good fortune of
having access to Pacific ports and being strategically and centrally located near China, India, and Indonesia, all among the
world's largest countries. Vietnam has demonstrated a strong commitment to education and human resource development.
The country's overall literacy rate is an impressively high 93.7 percent. Already, Vietnamese students are performing well in
the Scientific Olympics in areas such as math and science. Vietnam has excellent tourism potential which can be a valuable
source of foreign exchange. It also benefits from substantial and increasing international remittances of overseas
Vietnamese. The October 2001 approval by the U.S. Congress of a trade agreement between the 2 countries will provide
Vietnam with greatly improved export access to the large U.S. market for a wide variety of products.p