Vietnamese tiger rides on foreign capital

CAN THO, CANTHO, VIETNAM - 2000/01/01: Cargo and passenger boats moored at the busy riverine port at Can Tho situated on the banks of the Can Tho or Bassac River in Southern Vietnam. This is the largest city in the Mekong Delta and the region's principal transportation hub. From Can Tho, it is just a short distance to the mouth of the Mekong River, the 12th largest river in the world. In the 1960s, Can Tho was home to thousands of American GIs.. (Photo by Ben Davies/LightRocket via Getty Images)

Two years ago, a spanking new international terminal building was added to Hanoi’s Noi Bai Airport. The Japanese ensured that the elegantly designed ultra-modern glass and steel structure would impress foreign visitors, whose numbers were bound to grow as Vietnam opened up to the rest of the world. Vietnam’s focus on its new terminal, which over time will service 15 million passengers, is in itself an indicator of the country’s intent to engage with the globe.

Just like China and the ‘Tiger economies’, Vietnam has correctly diagnosed that its prosperity will have to ride on a judicious integration with the world economy. That means inviting foreign capital, which would come owing to the country’s low labour costs and business-friendly rules. A complementary focus on infrastructure — highways, railroads, ports, airports and services — would also ensure that Vietnam soon becomes a significant trading nation.

A short distance from the airport, the imposing Nhat Tân Bridge comes into view. This too has been built by the Japanese and is among the largest cable-stayed bridges in Southeast Asia. At night, the five spans of the bridge, representing the five gates of the ancient capital, are each illuminated in distinct colours.

The Philips Color Kinetics, which has been responsible for the illumination, claims that a staggering 16.7 million colours can be generated to light up the bridge that spans the Red river.

The Red river begins its journey in mountains south of Dali, in China’s Yunnan Province and enters Vietnam in the Lào Cai Province. Joined by two major tributaries — the Black river and Lô river — it terminates at the Gulf of Tonkin in the South China Sea. The delta area is the heart of Vietnam’s rice production, and has been central to its food security. The river has also been pivotal for the rise of Vietnam’s Haiphong port.

Korea, the biggest investor

Apart from the Japanese, the Koreans are investing big in Vietnam. In fact, Republic of Korea is, by far, the largest foreign investor in Vietnam. Last year, Seoul pitched in $5.5 billion, edging out Japan, which invested $868 million.

Samsung is Korea’s flagship investor. It is estimated that nearly half of its smartphones are churned out by its two factory complexes in Bac Ninh Province and Thai Nguyen Province, near Hanoi.

India’s engagement with Vietnam has so far taken a different route, with geostrategy taking precedence over economics. Vietnam is the centrepiece of India’s Act East policy, which has the consolidation of its ties with the ASEAN at its heart. However, there is now a clear recognition of the need to impart a greater balance to New Delhi-Hanoi ties.

“We are hopeful that in the coming years the economic and people-to-people dimensions, including tourism, would be added to an extraordinarily solid, special and friendly relationship,” says P. Harish, India’s Ambassador to Vietnam.

Indian shipping could also benefit greatly as Vietnam consolidates its position as an international export hub serving the Indian market. Industry specialists point out that rapid development of ports along India’s east coast would be vital if India is to take advantage of its favourable maritime geography. “Modern Indian ports along the Bay of Bengal from Chennai to Kolkata can also become profitable trans-shipment nodes for shipping goods from Asia to other parts of the world,” said an industry specialist who did not wish to be named.

Atul Aneja works for The Hindu and was recently in Hanoi