German Expert Optimistic About Vietnam's Economy

German Prof. Rainer Zitelmann said that Vietnam has the opportunity to become one of the leading economic powers.
March 29, 2023 | 11:32
German Expert Optimistic About Vietnam's Economy
Vietnam is currently one of the most dynamic countries in the world. (Photo: Vietnamnet)

How do you assess the growth rate of Vietnam's economy of 8% in 2022? Will Vietnam keep that growth rate this year?

I cannot make any short-term predictions. However, I believe, Vietnam has the opportunity to become one of the leading economic powers in the world. The condition to achieve this is that the economy continues to follow the path of a market economy.

Vietnam is such a great example that I chose this country to write about in my book. The book is about Vietnam and Poland, in which I explain that these two countries are models for other countries that want to escape poverty.

At the end of 1993, 79.7% of the Vietnamese population lived in poverty. By 2006, this rate had dropped to 50.6%, and by 2020 it was 5%.

Vietnam is now one of the most dynamic countries in the world, with a vibrant economy that creates great opportunities for hard workers and entrepreneurs around the world.

From a country that could not produce enough rice to feed its people before market reforms, Vietnam has become one of the world's largest rice exporters and also an exporter of electronic goods.

What challenges will Vietnam's economy face this year?

Vietnam should refer to the Index of Economic Freedom in 2023, research by the Heritage Foundation. The strengths and weaknesses of the Vietnamese economy are clearly described there.

Specifically, Vietnam is ranked highly in areas such as Financial Health, Government Spending, and has a moderate rating for Business Freedom, Monetary Freedom. However, Vietnam does not rank well in such indicators as Government Integrity, Judicial Efficiency, Property Rights, and Investment Freedom.

Therefore, strengthening the rule of law is the main challenge for Vietnam. Promoting the privatization of state-owned enterprises is also important. The proportion of state-owned enterprises in Vietnam is still too high.

German Expert Optimistic About Vietnam's Economy
Prof. Rainer Zitelmann is a world-renowned entrepreneur, real estate expert and author. After working as a professor of history at the Freie University of Berlin, he became curator of contemporary history for the daily Die Welt.

According to the ranking of the most powerful countries in the world in 2022 by US News & World Report, Vietnam is the 30th most powerful country in the world with a GDP of over US$363 billion and a population exceeding 98.2 million. How do you rate this result?

This is the result of the Doi Moi policy of 1986. Efforts the reform the market economy in Vietnam is paying off.

The economic freedom score is 61.8 and Vietnam becomes the 72nd free economy in the 2023 Index of Economic Freedom This score is 1.2 points better than last year.

In this ranking, Vietnam ranks 14th out of 39 countries in the Asia-Pacific region, its overall score is higher than the world and regional average.

However, what matters most is not just the most recent score, but the change in Vietnam's rankings. In my opinion, no country of comparable size in the whole world has achieved as much economic freedom as Vietnam, since 1995.

Back in 1995, when the Index of Economic Freedom was first compiled, Vietnam only scored 41.7 points. Over the years, Vietnam has increased by 20 points.

How do you predict Vietnam's economy in 2023 and beyond?

I am optimistic about the economic situation in Vietnam.

If Vietnam implements further free-market reforms, reduces state influence and corruption, and strengthens the rule of law, the potential is limitless.

Many experts believe that the flow of foreign direct investment (FDI) into Vietnam promises to accelerate in the coming time. What is your opinion?

I agree with the above opinion. FDI into Vietnam will increase a lot in the coming time. More businesses around the world are realizing that Vietnam has great potential, not just because of its relatively low wages.

Europe and the US are pursuing a strategy of not becoming too dependent on China unilaterally, and Vietnam will benefit from this.

What helps "foreign" businesses to choose Vietnam as a destination?

Many countries want to further diversify their investments in Asia and Vietnam is benefiting from this.

China has been successful for decades thanks to its free-market reform policies. However, in recent years, the influence of the state in China has increased again. This is why some companies are moving production work to Vietnam.

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Rosie Nguyen
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