Since the economic reforms in the late 1980s, Vietnam has transformed into a vibrant economy propelled by strong economic fundamentals, compelling demographics, rich natural resources and a buoyant consumer society. With an economy that is underpinned by exports and domestic consumption, Vietnam political and social stability make it one of the safest countries in the word, and its geographic centrality and long coastline provides tourism and trade opportunities. Vietnam's entrepreneurial culture, young population and rising incomes form a very attractive consumer base, and the countries high literacy rate and strong Confucian work-ethic create a highly capable workforce.
Vietnam's strong fundamentals as an attractive investment destination include:
- Solid Economic Growth: Average annual GDP growth of 6,6% (2007-2011)
- Sovereign Safety: Little political turmoil or threat of terrorism
- Socio-Political Stability: One-party system with high degree of ethnic, linguistic and religious homogeneity
- Rich Natural Resources: Net exporter of crude oil; abundant minerals and other natural resources
- Diversified Economy: A global leader in agro-business and light manufacturing
- Compelling Demographics: Nearly 90 million people of which 70% are under the age of 35
- Rapid Urbanization: 30% urbanization rate as of 2010 expected to increase to 45% by 2020
- Rising Levels of Income: Middle-class consumers emerging as household incomes rise dramatically
- High Literacy Rate: Over 90% in total; 95% for those 15 years old and up
- Strong Foreign Direct Investment: Committed FDI totaled more than US$108 billion over the past three years
Demographic Dividend
For a country of nearly 90 million people, the age structure of Vietnam's population is a perfect pyramid, with approximately 80% of the population under the age of 40 and 72% of this majority under the age of 24. The lost generation caused by the conflicts of the 20th Century has resulted in a thin layer of citizens over the age of 60, which represents only 8% of Vietnam's total population. Compared to other Asian nations, Vietnam has the youngest demographic profile in contrast to the “middle-age” population of China and the aging population of Japan.
This phenomenon is what the United Nations Population Fund describes as a 'demographic dividend,' where there are two or more persons of working age (15-60) for every person of dependent age (under 15 or 60 and over). The demographic dividend equates to an increase in the rate of economic growth due to a rising share of working age people in a population. Vietnam's demographic bonus presents a golden opportunity and is expected to persist thru the next 30 years.