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Vietnam: A country on the move

Manuela Kasper-Claridge / nz
November 20, 2014

About 750 business representatives are meeting in Ho Chi Minh City to explore opportunities in Vietnam. The mood is upbeat, reflecting Vietnam's high growth rate. Manuela Kasper-Claridge surveys the scene.

Ho Chi Minh City skyline
Image: picture-alliance/landov

"There, have a look," the taxi driver said. He took a hand off the steering wheel and pointed across the street at a brand new showroom for the Mini, a car produced by a British subsidiary of Munich-based BMW Group. The showroom highlight was a white Mini Cabriolet, the sort of car one might like to drive in the hot sunshine of Ho Chi Minh City.

Car sales rose by 40 percent in Vietnam last year. An impressive growth rate by any standard, but the Mercedes luxury brand beat even that - it recorded an increase of 60 percent.

However, the market is growing from a low base. Just 150,000 cars were sold last year in Vietnam. The most popular means of transport is still the scooter. The rattling, fume-spewing two-wheelers are nimble and affordable. The government estimates that there are over six million of them in Ho Chi Minh City alone, buzzing about with only moderate regard for street signs. Pedestrians intending to cross a street here need sharp eyes and steely nerves.

Jobs for the young?

Two young city planners nursed their drinks in a private coffeehouse. Luu Hoang Kiem Minh Nhat and Thu Minh Nhat, both 23 years old, just recently finished their studies. Now they're looking for a job. That's a difficult challenge, because they face enormous amounts of competition. Vietnam's population is very young. Each year, about one million people graduate from school. "We speak English; maybe we could find work in a foreign architectural firm," says Nhat.

Working conditions are generally better at foreign firms, they said. Foreign firms often provide health insurance, subsidies for transit fares, and a higher wage.

Sigmar Gabriel in Hanoi
German economy minister Sigmar Gabriel is heading up a major German trade delegationImage: picture-alliance/dpa/B. Marks

The two young men don't want to work for the public service. They don't want to be bureaucrats. The two are typical of many Vietnamese: They want to live in the city, plan an independent future, and have as much freedom as possible. They pay no attention to Communist Party propaganda posters.

Apolitical civic engagement

Many young Vietnamese are involved in civil society projects, yet without being explicitly political. "Saigon Makeover", for example, is a project to which the two young city planners contribute unpaid work. Its aim is to beautify the city, which is Vietnam's main business metropolis.

Participants spent weeks working on landscape redevelopment plans aimed at making the city more beautiful. The Vietnamese media reported proudly on the initiative - which was citizen-initiated, private and without government control. Over 150 young people submitted proposals.

Green areas are rare in the ten-million-city, and a lick of new paint here and there wouldn't hurt either. Now the organizers need to find sponsors for the implementation of their plans.

The Prussians of Asia

Foreign companies are excited by the energy and dynamism of young Vietnamese. Tobias Gruemmer is managing director of Rhenus Logistics, a German business that employs around 24 000 people worldwide. Gruemmer has lived in Vietnam for nine years.

Adidas factory in Vietnam
Adidas is one German company with factories in VietnamImage: picture-alliance/dpa/P. Kneffel

"People say about the Vietnamese that they're the Prussians of Asia," he said in an interview with DW. "They are very diligent and orderly. What they lack is international experience. But the young people are starting to catch up."

Gruemmer is optimistic about Vietnam's development. "Many people have made the jump into the middle class," he said. "The dynamism in Vietnam is great, just like in the whole Southeast Asian region."

But he cautioned that there are factors that could hold the country back - in particular, he expressed a concern that the country's infrastructure development may have trouble keeping pace with economic growth". In that respect the government should do more. But on the whole, he said, the Communists were very friendly to business. "It is a sort of communism that hardly interferes in economic matters," said Gruemmer.

OECD sees a region on the rise

The OECD, the Organisation for Economic Cooperation, recently published their updated "Economic Outlook on South East Asia". For Vietnam, the OECD forecast growth of 5.7 percent next year. The report identified access to education and the widening gap between city and country as Vietnam's biggest challenges.

Putin's Mercedes in Vietnam
Transport by Mercedes is a desirable status token in Vietnam as elsewhere. Pictured: Vladimir Putin's armoured Mercedes on his 2014 visit to VietnamImage: picture-alliance/dpa

Stefan Kapferer is a Deputy Secretary General of the OECD. Speaking at the Asia-Pacific Conference of German Business, he said "Southeast Asia is becoming the economic powerhouse of the world economy," and presented figures in support of his view. He pointed to the region's growing middle class and generally good economic data in support of his boosterish view. The OECD estimates the average economic growth rate for many countries in Southeast Asia at more than six percent. Vietnam, he said, is central to the region's dynamism.

The numerous German business representatives who have come to take part in the conference will hear that message with enthusiasm. The participation of German Economics Minister Sigmar Gabriel at the conference is seen as a positive signal.

On Thursday, before arriving at the conference venue, Gabriel visited a training center operated by Germany's Bosch corporation in the province of Dong Nai. 46 young Vietnamese are being trained as industrial mechanics there - to German standards. It's a flagship project that's meant to be followed by further such training centres.

Bosch has already invested 160 million euros in Vietnam, making it the largest European investor in the country.

Perhaps some of the companies in the German delegation will compete with Bosch for number-one investor status going forward.