Bill Johnston is an unabashed fan of Vietnam. Yes, he acknowledges, the country is under a Communist dictatorship, free speech has its "limits," and corruption remains a problem.
But after a stint as Canada's consul general in Ho Chi Minh City for a three-year period ended in 2009, he says he still can't get over the optimism and enthusiasm of the Vietnamese -- especially given a history marred by war and foreign occupation.
"There's a youthful dynamic at play," he said, noting Vietnam is relatively young, with a median age of 26.9 in a country of 86 million.
This younger population doesn't carry the type of emotional baggage their elders might from the Vietnam War, he explains. As a result, the younger Vietnamese work with a clean slate of sorts in terms of pursuing wealth and opportunity. Recriminations play little to no part in investments or spending decisions.
Plus, the Vietnamese are living in a more bountiful Vietnam compared with their parents and grandparents, with GDP per capita presently at US$1,200 versus just under the US$100 mark in 1990. (A recent World Bank report suggested GDP per capita has surged 238% since 2000.)
The prospect of catering to this younger, and increasingly wealthier, Vietnamese population should excite Canadian investors and companies looking to crack new markets.
Up until the financial crisis, Canada was indeed making inroads into Vietnam, with exports to the southeast Asian country climbing 56% in a four-year span before sinking last year. But based on some preliminary data compiled by the Asia Pacific Foundation of Canada, goods sold to Vietnam in the first six months of 2010 are running roughly 45% ahead of the pace recorded in the first half of 2009.
The improvement coincides with a pickup in Vietnamese economic expansion. Real GDP grew 5.3% in 2009, one of the better performances among emerging Asia nations, and the first half of 2010 saw output surge 6.5% due to a strong pick up in manufacturing activity.
The Asian Development Bank recently upgraded its Vietnam outlook, envisaging 6.7% GDP growth this year and 7% in 2011.
"You have seen fantastic economic growth over the last number of years," says Robert Simmons, chief representative for Export Development Canada in southeast Asia.
Reform of the Vietnamese economy began in the late 1980s through the country's doi moi program, which saw it sell off stakes in its nearly 12,000 state-owned enterprises to private investors. To date, there are up to 4,000 state-owned firms still operating in Vietnam.
The engine driving Vietnam's recent strength is its ability to attract manufacturers -- due to its low-cost environment but high-quality labour force. Its big coup to date was in 2006, when the giant U.S. chipmaker Intel Corp. chose Vietnam as the site for a US$1-billion production centre.
That same year, Microsoft Corp. founder Bill Gates said there was no reason Vietnam could not rival India in terms of software development and outsourcing jobs.
All this activity is prompting the Vietnamese to strike out on their own and capitalize on the boom.
The World Bank notes the role of the state-owned sector in manufacturing activity has declined appreciably from 52% in 1995 to roughly a third in late last decade.
But, Mr. Simmons says, "there is a lack of skilled labour and management to get their ventures to the next level." This is why the education sector is seen as one area where Canada could have a role -- to help set up the schools and management training required for Vietnamese entrepreneurs to take the next step, as well as attract Vietnamese to Canadian universities.
As it happens, Mr. Johnston is headed to Vietnam to help lead a B.C. delegation looking to attract Vietnamese to Canadian schools.
Vietnam, likely in recognition of its weak schooling system, has set a goal of having 20,000 of its young people obtain post-graduate degrees from leading foreign schools by 2020.
Infrastructure is just one element of a recently proposed 10-year socioeconomic development strategy.
Besides clearing up infrastructure bottlenecks, the 10-year plan looks to fix deficiencies in the regulatory framework, address shortages in skilled labour, and instill additional private-sector practices at the myriad state-owned enterprises.
