An ANZ economist believes the country’s economic journey so far can provide good lessons for Cambodia, Laos and Myanmar.
Vietnam has been once again hailed for its strong economic performance as experts around the world continue looking for success stories to help small economies catch up with advanced nations.
In a new Bloomberg report, Eugenia Victorina, an economist at Australia & New Zealand Banking Group in Singapore, described Vietnam as a “role model” which has transformed its economy from a mainly farming one to an exporter of electronic goods, like smartphones.
“Vietnam provides the template for an export-led growth from agricultural," Victorina said. "We have seen Myanmar, Laos, and Cambodia trying to imitate Vietnam’s model of luring FDI to prop up their export capacity.”
|Street light decorations for the upcoming Lunar New Year celebration in Ho Chi Minh City. Photo by Reuters/Alex Brandon
Cambodia, Laos and Myanmar, which are among Asia’s least developed countries, are projected to have the most rapid expansions in Asia from 2017 to 2019, sustaining growth rates of close to 7%, according to the World Bank. The combined size of the three economies is less than US$100 billion, about a third of neighbors like Singapore, Malaysia and Philippines.
“The promise of transforming the Mekong into a manufacturing hub has a lot of potential,” Victorina was quoted by Bloomberg as saying.
The World Bank last week said Vietnam’s economy would expand at an average of 6.3% in the next three years, with all categories of demand buoyed by strong foreign direct investment and manufacturing exports.
The bank said that for Vietnam, reforms to state-owned enterprises, including measures that enhance transparency and governance, “could reduce pressure on fiscal resources.”
Vietnam reported economic growth of 6.21% last year, among the fastest in the world. That came even after the country was hit by several headwinds including a prolonged drought and a devastating coastal pollution disaster in the first half of the year.
The country, traditionally known as a top supplier of products such as coffee, rice, garment and footwear, has recently attracted more investment from tech giants such as Intel and Samsung. Phones and computer products are now among its top export earners.