In Vietnam the ingredients are in place for burgeoning prosperity, so the question investors may pose is when will we see a Vietnam exchange traded fund (ETF)? Andy Mukherjee for Bloomberg says 4 million motorcycles on the streets of Vietnam offers testimony to the opportunity awaiting this country. While a $900 Honda motorcycle doesn’t equal affluence in the U.S. mind set, in Vietnam it is status, signaling a job and mobility out of rural areas. The bike doesn’t mean investors will see results by investing into a two-wheeler mass production, rather, it is a sign of the young 25 year-old labor force attaining the tools they need for becoming part of the global supply chain.
Vietnam may be the world’s next factory of choice for labor intensive goods, and rice and coffee are being displaced by textiles, footwear and furniture as top exports. Chinese goods have become increasingly more expensive in the U.S. giving Vietnam a point of entrance. Moreover, Vietnam entered into the World Trade Organization providing the textile industry quota-free access to the U.S. This has surged the overseas investment commitment to 37%, or $13 billion.
Like any developing country, Vietnam has to work out the bumps of red tape and corruption. Once this is under control, the outlook is favorable.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.