1. VIETNAMICA.NET
Socio-Economic Insights on Vietnam
Understanding of
The Vietnamese Economy and Business Environment

2. Bonjour Vietnam, 2006
Raconte-moi ce nom étrange et difficile à
prononcer
Que je porte depuis que je suis née
Raconte-moi le vieil empire et le trait de mes yeux
bridés
Qui disent mieux que moi ce que tu n'oses dire
Je ne sais de toi que des images de la guerre
Un film de Coppola, des hélicoptères en colère
Tell me all about this name, that is difficult to say.
It was given me the day I was born.
Want to know about the stories of the empire of
old.
My eyes say more of me than what you dare to
say.
All I know of you is all the sights of war.
A film by Coppola, the helicopter's roar.
Musician: Marc Lavoine (French)
Singer: Pham Quynh Anh (Belgian)

3. Vietnamese Tourism
2000-2005: Welcome to Vietnam
2006-2010: Vietnam: The Hidden Charm
(by Dr. Adam McCarthy, + 30% foreign
visitors)
Curious? Then What Next?

4. The Last Frontier
• First investment funds in Vietnam: early 1990s
– First half 1990s: Eight funds; US$700 Mln.
– After 1997: only two (Vietnam Enterprise Investment Fund run by
Dragon Capital Vietnam, and Vietnam Frontier Fund by Finasa)
• 2002-2005:
– Quite period
– Mekong Capital, VinaCapital, IDG, VietFund, PXP Asset Management
• 2006-2007:
– Booming period
– More: 22 funds and 17 fund management companies
• 2009-2010:
– Closing, exiting, leaving (Indochina Capital exited in May 2009)
– Poor perfomance (May 16, 2011)
• VMFVF1: 9.8; PRUBF1: 5.3; MAFPF1: 4.1
• Par value: 10
• The charm is no more hidden!

5. Vietnam Stock Market

6. US$
GDP per capita
2,150
1,650
1,150
650
150
1969 1975 1981 1987 1993 1999 2005 2015

7. 0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
GDP Growth
20
06
20
08
20
10

8. The Stock of FDI in Vietnam
(As of Dec. 22, 2010)
Type of Investment No. of Projs Registration Statutory
100% foreign-owned 9,599 119,252 39,258
Joint venture 2,209 60,586 16,964
Business cooperation contract 223 5,053 4,574
Joint-stock company 193 4,795 1,405
BOT, BT, BTO contracts 11 3,599 903
Investment holding 1 98 83
Total 12,236 193,382 63,186
(As of Oct. 20, 2009) 10,805 174,715 56,527
Source: GSO and Vietnam Economic Times, 2010. Registration and statutory
capital figures in million of USD.

9. Major FDI Sources, 2009
Source: Vietnam Economic Times, 2009.
Data point: Country; Cumulated FDI registration; Relative contribution in
percentage; Value: US$ Bln

10. Major FDI Sources, 2010
Chinese Taipei, 22.8 ,
12%
Others, 38.5 , 20%
Korea, 22.1 , 11%
Thailand, 5.8 , 3%
Caym an Islands, 7.4 ,
4%
Singapore, 21.7 , 11%
Hongkong, 7.8 , 4%
USA, 13.1 , 7%
Japan, 20.8 , 11%
BVI, 14.5 , 7%
Malaysia, 18.3 , 10%
Source: Vietnam Economic Times, 2010.
Data point: Country; Cumulated FDI registration; Relative contribution in
percentage; Value: US$ Bln

11. Vietnam: A Destination for American Companies
• Pros:
– The 2001 US-Vietnam Bilingual Trade Agreement
– Vietnam’s full membership of WTO in 2007.
– A promising market of 87 million people. The nation
GDP per capita was about US$1,200 in 2010.
– A reasonable alternative for China-based production
since the Chinese production cost is increasing
• Cons:
– Business environment: Organized Chaos
– Emerging and transiting economy
• Fact: No American FDI in Top15 (4-M 2011)

14. Trade Deficits
US$ Mln.
Exports of Goods Imports of Goods
100000
80000
60000
40000
Exports ~ Imports
20000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

15. Trade Balance

16. Agricultural Products Exports
US$ Mln
Aquacultural Products 4,953 6.9%
Vegetable 451 0.6%
Cashew nuts 1,136 1.6%
• The nation’s comparative advantage
Coffee 1,763 2.5%
Tea 197 0.3%
• Renewable resource
Pepper 425 0.6%
Rice 3,212 4.5%
• Green development and climate change
Casava 556 0.8%
Coal 1,549 2.2%
Crude Oil 4,944 6.9%
Total Export Value 71,629

17. Agricultural Products
John Richard "Jack" Simplot, 1909-2008 Dang Le Nguyen Vu, born 1971
King of Potato Trung Nguyen Coffee
Forbes (2007): # 273, US$3.2 billion Financial Times Case Study Apr. 27, 2011

18. Tourism Industry

19. Socio and Cultural Aspects
• Chinese-originated Confucianism
– Hierarchy
– Face-saving
– Relation business
• Social Ranking “Sĩ – Nông – Công –Thương”
– Gentry Scholar/Intellectual Official – Farmer –
Craftsman – Trade/Businessman
• The Hidden Entrepreneur’s Aspiration to Become a Non-
Entrepreneur

20. ‘Seed’ Capital
• Most Vietnamese business people are enthusiastic
about discussing collaboration opportunities
• Perception: foreigners bring
– Future profits
– AND immediate revenues
• Knowledge of the local market should be an asset for the
potential partnership
• Face-saving keeps Vietnamese business people not
asking for what they really want
• `Seed’ capital for long-term partnership

21. Cultural Interpreter
• There is a gap between what the
local partner proposes what he has
done or is able to do
• “Cultural Interpreter”
– local professional business and
consulting firm
– understanding and expertise of the
business and administrative
processes

22. Disguised Entrepreneurs
• Who are disguised entrepreneurs?
– A bunch of ideas and proposals
– NO risk-taking, NO implementing, ect.
– Trying to be on the “safe-side”
• Middle man:
– Willing to facilitate the foreigners’ smooth businesses in Vietnam
– Gains: profits, business relations, images and brands
• Keep encouraging them to do their best for business collaboration.

23. Strategic Planning
• Many set up and start running a new company with:
– A list of wishes
– No business plan
• New fashion of the Vietnamese large corporations:
– Doing “big things,”
– Thinking globally,
– Developing strategy
• Strategic planning services: a multi-million dollars market
• High prices for:
– Well-known consulting brands (experts, professors)
– The business owner’s ex-ante strategy
– Higher prices of equity

24. What is Strategy?

25. Reference Reading
• Vuong, Q.H., Dam, V.N, Van Houtte, D. and Tran, T.D. (2011) “The Entrepreneurial Facets as Precursor to Vietnam’s Economic
Renovation in 1986,” Working Paper Series Centre Emile Bernheim, SBS-EM – ULB, No. WP-CEB 11-010, April.
• Nancy K. Napier and Vuong Quan Hoang (2011) “Getting to the Real Story: What Vietnamese business people wish foreigners
understood about doing business in emerging and transition countries like Vietnam – BEFORE they start,” Int. J. Human Resources
Development and Management, accepted-forthcoming.
• Quan Hoang Vuong and Tri Dung Tran (2011) “Vietnam’s Corporate Bond Market, 1990-2010: Some Reflections,” The Journal of
Economic Policy and Research, Volume 6, Number 1, pp. 1-47, October 2010 – March 2011.
• Vuong Quan Hoang, Tran Tri Dung, and Nguyen Thi Chau Ha (2010) “Mergers and Acquisitions Market in Vietnam’s Transition
Economy,” The Journal of Economic Policy and Research, Volume 5, No. 1, pp. 1-54 (ISSN: 0975-8577), Mar. 2010. Institute of
Public Enterprises, Hyderabad 500-007.
• Vuong Quan Hoang (2010) Financial Markets in Vietnam’s Transition Economy: Facts, Insights, Implications. (ISBN: 978-3-639-
23383-4) VDM-Verlag, Feb. 2010, Saarbrücken, Germany.
• Quan-Hoang Vuong and Tran Tri Dung (2009) “The Cultural Dimensions of the Vietnamese Private Entrepreneurship,” The IUP
Journal of Entrepreneurship Development, Vol. VI, No. 3 & 4 (Sept. and Dec. 2009), pp. 54-78.
• Vuong Quan Hoang and Tran Tri Dung (2009) “Financial Turbulences in Vietnam’s Emerging Economy: Transformation over
1991-2008 Period,” in Jagadeesha and Deene, eds., Contemporary Issues in Finance, pp. 43-61, Excel Books, New Delhi, ISBN 978-
81-7446-725-6 (Amazon link). Available at SSRN: http://ssrn.com/abstract=1486204
• André Farber, Nguyen Huu Tu ,Tran Tri Dung, and Quan-Hoang Vuong (2008) “The financial storms in Vietnam’s transition
economy: A reasoning on the 1991-2008 period,” Working Papers CEB 08-023.RS, Université Libre de Bruxelles, Solvay Brussels
School of Economics and Management, Centre Emile Bernheim (CEB), November.

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