Vietnam ideal for "leaf of faith" - Country Focus

Business Asia, July, 2003 by Randolph Ramsay

Australian exporters should take a leap of faith and invest their time and resources in Vietnam now before the country's economy truly takes off, Austrade senior trade commissioner for Vietnam Tim Gauci says.

Vietnam has been one of the stars of Asia in recent years, racking up impressive growth rates as the country opens itself up for eventual acceptance into the World Trade Organisation. Vietnam's economy probably expanded at a 6.9 per cent annual pace in the first six months of the year. Vietnam's growth rate averaged 7.7 per cent between 1992 and 1999, according to the Asian Development Bank, and is now South-East Asia's fastest-growing economy.

Gauci says most Australian exporters still had an outdated concept of what Vietnam was like.

"I still find that so many people think that Vietnam is the country that it was 10 years ago," he said. "My main objective is to change that perception and give an update. It's an enormous opportunity for someone who doesn't want to deal in a market that's extremely competitive. People who do deals here now and develop a good relationship will be rewarded in two or three years time when Vietnam really hits its straps."

Opportunities abounded in several sectors of the Vietnamese market, Gauci says. These include services, food, medical, chemicals, ICT, dairy, meats and more.

Gauci says the Vietnamese Government was serious about opening up its economy to the rest of the world, and had either reviewed or were in the process of reviewing all the rules and laws relating to foreign exports and investment. Challenges remain, however, particularly in regards to successfully implementing any new changes. "The reason they're not meeting the expectations they've (the Vietnamese Government) set for themselves is that they just don't have the resources here to deal with all the issues that are coming at them at once," he said. "The intent is there, they certainly understand the issues, but in a developing country like Vietnam, you make one minor change, for example a law on foreign investment, and the ramification of that change can bleed off into a hundred other areas."