Vietnam has attracted heavy foreign investment over the past few years and possesses competitive edges over neighboring countries, Pham Hong Hai
, chief executive officer (CEO
) of HSBC
Vietnam, was quoted by Thai media as saying.
Vietnam stands out because of its cheap labor, its big market with a population of 90 million, and free-trade agreements with 55 countries, aside from political stability and promised economic reforms, Mr. Hai noted.
Given the low wage rate for unskilled labor, the country has attracted a lot of labor-intensive industries. The low wage rate will last for at least another five years because 60% of the population still lives in rural areas.
He pointed out a shortage of worker at management level as one problem that Vietnam is facing. He expected the AEC integration, which allows the free movement of skilled laborers, to attract more white-collar workers to the country.
The HSBC CEO said that Vietnam’s ruling party just elected a leadership, which is expected to maintain the current policies to strengthen the country’s economy.
The policies that will be continued include privatization of state enterprises, modernizing the banking sector, enhancing the effectiveness of fiscal policy and improving the business environment, he added.
He stressed that textile and garment manufacturers from mainland China and Hong Kong moved to Vietnam even a year before the conclusion of the Trans-Pacific Partnership (TPP) agreement. He was upbeat that more of these and other industries would come to the country.
Coupled with the manufacturing and processing industries, demand for services and logistics will increase. With an increasing middle-income population, Vietnam also needs more investment in retail, healthcare services and education services, the banker added.
“The Vietnamese government’s mindset and sentiment is very pro-foreign investment. Given incentives, taxes and benefits, this will create a favorable environment,” he said. “I see bigger investments in the future.”
Kevin Tan, CEO of HSBC Thailand said that Vietnam is very attractive in comparison with neighboring countries namely Cambodia, Laos, and Myanmar
Cambodia’s attractiveness is on the rise, and Laos and Myanmar could be more attractive in the near future. “But from the point of view of political stability and infrastructure, Vietnam is still better than those countries. Relatively, Vietnam is very attractive,” he said.