vietnam: bright prospects but challenges could see it fall...
TRANSCRIPT
November 2017
Vietnam: Bright prospects
but challenges could see it
fall short
Sian Fenner
Lead Asia Economist, Oxford
Shawlin Chaw
Senior Analyst, Control [email protected]
FDI inflows and exports driving growth
1
-20
-15
-10
-5
0
5
10
15
20
25
2015 2016 2017
Vietman Rest of Asia
Vietnam: Export growth%, year
Source : Oxford Economics/Haver Analytics
0
5000
10000
15000
20000
25000
30000
35000
40000
2012 2013 2014 2015 2016 2017
Other
Construction and real estate
Manufacturing
Vietnam: FDI by typemn, USD
Source : Oxford Economics/Haver Analytics
* 2017 - Q1-Q3
Questions please email [email protected]
Vietnam to be star performer
0
1
2
3
4
5
6
7
8
Singapore Thailand Malaysia Indonesia Philippines Vietnam
2016 2017
2018 2019
ASEAN: GDP growth forecasts%
Source : Oxford Economics/Haver Analytics
2 Questions please email [email protected]
External vulnerabilities
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2012 2014 2016 2018 2020 2022
Baseline
Tighter policies China
Cyclical recovery in World Trade
US Policy errors
% year
Source : Oxford Economics
Impact of scenarios on GDP growth
3 Questions please email [email protected]
Less fiscal buffers
4
-14
-12
-10
-8
-6
-4
-2
0
2
-14
-12
-10
-8
-6
-4
-2
0
2
1997 2000 2003 2006 2009 2012 2015 2018
F'cast
% of GDP
Source: Oxford Economics
Vietnam : Government budget balance
US$ bn
US$ bn
(LHS)% of GDP
(RHS)
Questions please email [email protected]
Risk of financial imbalances
5
0
5
10
15
20
25
2013 2014 2015 2016 2017
Vietnam: Credit growth%, year
Source : Oxford Economics/Haver Analytics
0
20
40
60
80
100
120
140
2000 2002 2004 2006 2008 2010 2012 2014 2016
Vietnam: Domestic Credit to GDP ratio%, of GDP
Source : Oxford Economics/CEIC
Questions please email [email protected]
Vietnam to outperform ASEAN-5
0
1
2
3
4
5
6
2007-2016
2017-2030
ASEAN: Potential GDP growth% pa
Source : Oxford Economics/Haver Analytics
6 Questions please email [email protected]
Young workers and low wages boost advantage
0
10
20
30
40
50
60
70
80
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
Working population
Old age dependency
Vietnam: Demographics% of total population
Source : Oxford Economics/Haver Analytics
Forecast
7
0 1000 2000 3000 4000
Vietnam
Philippines
Thailand
Malaysia
China
Taiwan
Japan
Korea
Singapore
US
Global: Nominal wages, USD
Source : Oxford Economics/ILO
Questions please email [email protected]
Improved business climate
0 50 100 150 200
Singapore
HK
Taiwan
Malaysia
Thailand
Vietnam
Indonesia
China
Philippines
Cambodia
Lao
Myanmar
Asia: Ease of Doing Business Ranking
Source : Oxford Economics/World Bank
8 Questions please email [email protected]
www.controlrisks.com
Vietnam: Key risks to business
Vietnam: Opportunities abound…
Source: US Chamber ASEAN Business Outlook Survey 2018 (released September 2018)
Questions please email [email protected]
Source: US Chamber ASEAN Business Outlook Survey 2018 (released September 2017)
… but challenges also aplenty
49%Corruption at
ports of entry
56%Poor or inadequate
infrastructure
72%Unclear regulations and
enforcement
What are the top supply chain issues experienced in Vietnam?
Questions please email [email protected]
Corruption: Deep-rooted in everyday life
Significant risk for foreign companies
operating in Vietnam
Government officials and agencies
expect bribes and facilitation payments
to be paid to access public services
Efforts to strengthen the anti-corruption
framework has largely been ineffective
Corruption violations in Vietnam could
attract the scrutiny of anti-graft
regulators overseas (in particular the US
FCPA and UK Bribery Act)
Questions please email [email protected]
Highly politicised operating environment
Clash of the political titans:
‘Conservative’ Trong vs. ‘Reformist’ Dung
A heavy emphasis on patronage
means that ruling party factionalism
could impact business operations
Contracts could be jeopardised if
caught in the crosshairs of factional
politics
Delay implementation of economic
policies, development in key
sectors and divestment plans
Judiciary is biased towards local
interests
Questions please email [email protected]
Vietnam scores better than other Asia frontiers
15
0
2
4
6
8
10
Au
str
alia
Sin
gap
ore
Ko
rea
Ch
ina
India
Indo
ne
sia
Vie
tna
m
Ca
mb
od
ia
Ba
ng
lade
sh
Lao
s
Mya
nm
ar
Emerging markets average
Economic risk: Vietnam vs Emerging markets averageRisk score, 10 = highest
Source : Oxford Economics
Questions please email [email protected]
