Vietnam

Vietnam leader of the supply chain

But developing a native high-tech industry is not that simple

Apple's future could be in Vietnam. For more than ten years, the Southeast Asian country has been an absolute leader in attracting the biggest technology brands: from Samsung, to Xiaomi, to Intel. And Steve Jobs' company is also producing components for the AirPods here, as well as testing the manufacturing of smartwatches and laptops. Being able to fit into the supply chain of these more complex devices would be a great success for the manufacturing industry in Hanoi.

Vietnam has in fact recorded a growth in the export of technological goods unmatched by any other Asian country. From 13% in 2010, in just ten years, high-tech components have become 42% of the export. Moreover, in recent years the rising cost of inflation in Chinese manufacturing centers has prompted many producers to move their factories to Vietnam, where workers' wages are lower. First the trade war between Washington and Beijing and then the continuous and tight lockdowns in China, have incentivized companies, including Apple, to move to the country. But Hanoi's ability to attract foreign companies to work the components of technological devices in the country goes hand in hand with the difficulty in bringing out an industry of its own. According to reports published by the Ministry of Industry and Commerce in 2019, Vietnam has lagged behind most of its neighbors in the technology sector. 

In previous years, the so-called “Asian tigers” have shown that growing in quality, from being part of the assembly line to becoming a real producer, is possible. Examples are the economies of China, Taiwan and South Korea, which, starting from a base of low-cost products, have turned their industries towards automotive and robotics. Vietnam has similar characteristics to these countries: low production costs, available manpower and an industrial policy coordinated by the state. However, two major problems loom: the lack of adequate infrastructure and highly skilled labor. In fact, managers and skilled workers make up only 10.7% of the entire Vietnamese workforce, the lowest percentage of all the major economies of Southeast Asia. Furthermore, in China for example, entire areas are dedicated to the creation of a single product; Vietnam, on the other hand, does not have these agglomerations. Its industries are scattered throughout the country and poorly integrated.

It remains, then, to clarify whether the success achieved by the "Asian tigers" decades ago can still be replicated today, with a globalized economy transformed by the domination of the Chinese manufacturing sector. The role of Hanoi therefore still remains uncertain: in balance between continuing to be a reliable part of the production chain and, at the same time, ready to develop a strategy to enter the international market. Of course, success in high-tech would mean becoming competitive with big Asian brands, such as the Chinese Oppo or the Malaysian Silterra. But any failure, says the director of the Mekong Development Research Institute Phung Tung, would condemn the country to be "forever a component of the supply chain", with the disastrous consequences of stagnation, social inequality and debt crises.

The solution to continue to attract foreign companies to the territory and, at the same time, develop an autonomous growth strategy, places Vietnam in front of a dilemma: the training of the workforce will increase the country's chances of launching itself into the high-tech industry, but it will also lead to an increase in wages, encouraging foreign producers to relocate elsewhere, such as Cambodia.

Dong Nai, un hub manifatturiero nel sud del Vietnam

La ripartenza del Vietnam parte dagli investimenti esteri. Ecco come una delle province meridionali sta attirando l’interesse degli investitori e le risorse di Hanoi per spingere l’economia nazionale in un contesto globale

Un hub manifatturiero a vocazione sempre più internazionale si sta espandendo in Vietnam. Si tratta della provincia meridionale di Dong Nai, area a vocazione industriale localizzata a soli 100 km dal centro di Ho Chi Minh City, il principale centro urbano del sud. Un Guangdong in versione vietnamita che sta attirando tanto i fondi governativi per lo sviluppo economico quanto l’interesse degli investitori esteri.

Le riforme

La Strategia di sviluppo quinquennale di Dong Nai 2020-2025 ha posto le basi per accelerare lo spirito imprenditoriale della provincia: nel piano si prevede di puntare, tra una serie di obiettivi precisi, sull’attrazione degli investimenti esteri per innovare ed espandere le forze produttive del territorio. Tra le riforme adottate dal governo locale rientrano lo snellimento delle procedure burocratiche e una tassazione ridotta per i nuovi investitori. Ma non solo: in tutto il paese non è prevista una soglia minima di investimento per avviare un’attività, purché l’investitore sappia garantire di avere risorse sufficienti affinché l’impresa rimanga economicamente sostenibile.

Nell’area sono già presenti alcune realtà internazionali come Nestlé, che ha localizzato qui la sua più grande fabbrica nel paese per la produzione di caffè. Ma i settori di investimento sono i più vari. Le opportunità vanno dall’elettronica al tessile, dai farmaci all’industria ittica: una dinamicità favorita dalle agevolazioni per facilitare la cooperazione tra pubblico e privato, nonché tra imprese estere e società locali. Oltre alle zone industriali già presenti, il governo ha approvato e attivato la costruzione di nuovi parchi industriali nelle località di Xuân Lộc, Định Quán, Vĩnh Cửu, Thống Nhất, Tân Phú e Long Khánh. 

Perché Dong Nai?

La provincia meridionale del Vietnam non è solo l’epicentro delle riforme amministrative per facilitare l’ingresso di capitali e competenze dall’estero. La posizione geografica della provincia offre un facile punto d’appoggio sia per il mercato interno che per le rotte internazionali: nella zona sono presenti gli aeroporti di Long Thanh e Ho Chi Minh City, diversi collegamenti stradali (alcuni di nuova costruzione) ed è in corso la costruzione di due nuovi collegamenti ferroviari verso Ho Chi Minh City e la provincia costiera di Ba Ria-Vung Tau. Infine, il porto di Dong Nai è uno dei principali porti regionali del paese.

Le opportunità offerte dal governo vietnamita per attirare gli investimenti a Dong Nai rientrano in un contesto più ampio di trasferimento delle imprese offshore verso i paesi ASEAN, complici la crisi globale della supply chain, l’innalzamento dei costi operativi in Cina e le restrizioni Covid tutt’ora implementate dalla Repubblica Popolare. In questo momento storico Hanoi ha saputo negoziare il suo ingresso nei principali accordi per gli standard commerciali dell’Organizzazione Mondiale del Commercio (OMS) e rendersi parte attiva nell’evoluzione di una zona di libero scambio ASEAN. Diversi sono anche gli accordi di libero scambio bilaterali e multilaterali, come l’appena avviata Regional Comprehensive Economic Partnership (RCEP). Non ultimo, l’accordo commerciale e per la protezione degli investimenti firmato nel 2019 con l’Unione Europea eliminerà il 99% dei dazi sui beni scambiati e ridurrà le barriere normative all’ingresso dei rispettivi capitali e prodotti nei due mercati.

Un’economia in crescita

Secondo gli ultimi dati della Asian Development Bank (ADB) il Vietnam sarà il principale motore della crescita economica nel Sud-Est asiatico. Con un tasso di crescita del PIL che si aggirava intorno al +6,3% tra il 2010 e il 2019 e dopo lo stop della pandemia, ora l’economia sta ripartendo: la banca prevede che il PIL del Vietnam crescerà del +6,5% nel 2022 e del 6,7% nel 2023, più di tutti gli altri paesi della regione. 

Andando ad analizzare nel dettaglio i tassi di crescita segnalati dalle autorità vietnamite, l’area di Dong Nai si conferma tra quelle più performanti, con una crescita degli investimenti diretti esteri del +7,8% nel primo quadrimestre del 2021 rispetto al 2021, per un valore di 4,42 miliardi di dollari Usa. Il 59,5% è stato destinato all’industria manifatturiera, mentre il 30,3% si è focalizzato sul settore immobiliare.

In un incontro organizzato da Dezan Shira & Associates sulle opportunità d’investimento a Dong Nai è stato evidenziato, inoltre, come la zona di Dong Nai sia oggi il quarto polo d’investimento del Vietnam – un trend in costante crescita che sta attirando soprattutto i capitali delle imprese  di tutto il mondo. Tra queste, spiccano i nomi di grandi società di Taiwan, Giappone e Corea del Sud.

Più investimenti, migliori investimenti

I passi avanti nella gestione della sostenibilità d’impresa in termini ambientali, sociali e amministrativi (Environment, society and governance – ESG) da parte di Hanoi stanno permettendo al Vietnam di allinearsi agli standard globali, adeguandosi alle richieste dei mercati che guardano al ranking ESG. 

Le ultime direttive sul lavoro, definite da una circolare di dicembre 2021, incrementano le tutele all’interno delle aziende laddove, in passato, permanevano le zone grigie che rischiano di minare l’immagine dell’impresa. La settimana non deve superare le 72 ore e non è possibile superare le 12 ore lavorative al giorno. Viene previsto almeno un giorno di riposo, con un minimo di quattro giorni liberi ogni mese. I datori di lavoro hanno ora l’obbligo della massima trasparenza circa orari, compensi e inquadramento contrattuale.

Anche nel quadro della tutela degli ecosistemi sono aumentati gli obblighi per le aziende. Le ultime direttive vanno a implementare gli obiettivi della nuova legge per la protezione ambientale del 2020, che comprende gli standard da applicare all’industria, come il trattamento delle acque di scarico e la gestione dei rifiuti plastici.

Vietnam commercial engine and green

The Southeast Asian country speeded up even more its growth. Not only at the economic level, but also for its global status.

Hanoi is increasingly at the center of regional and global trade maps. For some time now, the distorting effects of the so-called trade war between the United States and China have led many international companies to locate in Southeast Asian countries. Particularly Vietnam, which attracts not only manufacturers that could form the new "factory of the world" but also global digital giants, won over by a steadily growing middle class and young population. The Covid-19 pandemic first and the Ukraine war then, with all the geopolitics consequences of the case, are speeding up this tendency. It also seen in the numbers. In March, Vietnam's exports grew 45.5% month-on-month and 14.8% year-on-year, reaching a record of US$34.06 billion. According to the Vietnam General Bureau of Statistics, the Vietnamese economy expanded 5.03 % in the first quarter of 2022 compared to the same period a year earlier, surpassing China, which grew 4.8%. In addition, Vietnam's foreign commerce rose to $176.35 billion in the first quarter, an increase of 14.4% year-on-year. In comparison, China's foreign commerce in the 1st quarter increased by 10.7 % in yuan terms. The uncertainty related to pandemic restrictions is also pushing different companies and expats to reconsider their permanence in the People's Republic, often turning their attention just to Vietnam. Hanoi's trade with the United States and the European Union has increased considerably in recent years, thanks in part to the free trade agreement signed with Brussels.The various platforms launched in recent months and weeks could bring other benefits to the Vietnamese economy. Indonesia and Vietnam could be the ASEAN countries to benefit the most from new funding for the clean energy transition under a global partnership for infrastructure investment formally launched by the G7 at the summit a few days ago. The G7 is working with Jakarta and Hanoi in particular on partnerships to provide financing to accelerate decarbonization and the shift to cleaner energy sources. 

Islands, rocks and bamboo: Vietnam's choppy waters

In true bamboo diplomacy style, Vietnam had a modest reaction to the invasion of Ukraine. The echo of the conflict, however, was felt in Hanoi perhaps more than in Taiwan

Article by Lucia Gragnani

1979. China launches an offensive against Vietnam in response to Hanoi's opposition to the Khmer Rouge regime and the signing of the Soviet-Vietnamese partnership treaty. More than forty years have passed, but in Vietnamese school books there is still almost no trace of the Chinese attack. With the same reticence, Vietnam refrained from condemning Russia at the UN table, and opposed Moscow's exclusion from the Human Rights Council. This kind of strategic neutrality is not just pro forma, and it is so ingrained that it has managed to earn the bespoke name of bamboo diplomacy. Planted firmly in the ground, but nimble in flexing with the wind. In the countries of the Association of Southeast Asian Nations (ASEAN), this approach has resulted in modest reactions to the invasion of Ukraine.

The ambiguity of Vietnamese policy manifests itself in multiple ways. China is fighting with the United States for the role of first trading partner, showing itself capable of providing a response to Vietnam's growing demand for investment in infrastructure. For this reason, Hanoi has, like other ASEAN members, traditionally preferred to remain moderate towards Beijing, stalling so as not to be dragged down by American advances in China's containment policies. The United States has a strong interest in building a relationship with ASEAN in the area of maritime security as a key component of the Indo-Pacific Strategy, as announced in the communication issued ahead of the U.S.-ASEAN summit in May. After mending the wounds of war, Washington and Hanoi have established a solid but cautious cooperative relationship. But, with the ban on the export of lethal weapons to Vietnam valid until 2016, still not military.

The sector is Russian expertise, as is the production of oil extraction machinery. Relations between Hanoi and Moscow have been friendly for decades, rooted in traditional ties to the former Soviet Union. The 80 percent dependence on Moscow's supply of arms from 2000 onward has provided a cement to them. In late 2021, the governments of the two countries signed a new agreement to further expand military cooperation. Looking at Vietnam's posture toward Russia and the U.S., last year was emblematic. In the span of four months starting in April, there were successive visits by Russian President Vladimir Putin, Chinese Defense Minister Wei Fenghe, and U.S. Vice President Kamala Harris.

In bamboo diplomacy style, Vietnam had a modest reaction to the invasion of Ukraine. The echo of the conflict, however, was also felt in Hanoi and perhaps more so than in Taiwan. With the outbreak of war and subsequent sanctions complicating international trade with Moscow even for those countries that remained "friendly," the opportunities for access to Russia's arsenal diminished. Without being able to rely on its main strategic partner, Vietnam is now left with a bare flank.

This flank, in particular, is near the long east coast that looks out to the South China Sea, known in Vietnam as the East Sea. Ahead, a series of atolls and rock formations dot the maritime landscape, which is also overlooked by China, Taiwan, the Philippines, Brunei, Malaysia, and Indonesia. Each country claims sovereignty over a more or less large part of the South China Sea. In addition to being a key commercial hub through which passes a third of the world's maritime trade, the South China Sea has important reserves of gas in the subsoil. In recent years, it has become a place of friction for China-U.S. relations. For smaller players like Vietnam, navigating these choppy waters while remaining moderate is a strategic issue.

In 2016, the United Nations Convention on the Law of the Sea (UNCLOS) Tribunal ruled that not all land masses are entitled to island status. According to the Tribunal, there are, in fact, no formations permanently above water level in the South China Sea capable of supporting human life. The status of island would allow to exercise an exclusive economic zone (EEZ) of 200 nautical miles and conduct underground explorations. Maritime claims, however, are not only a matter of strategy, but also of politics and sovereignty. Islands or not, the ambitions of neighbors have not changed.

Of these, Beijing is the most problematic neighbor. Indeed, China claims the entirety of the South China Sea's rock formations and their corresponding waters based on the historic U-shaped line. This imaginary line encompasses the entire sea mass, and largely overlaps with Vietnam's claims of territorial sovereignty. These disputes are still the main source of tension between Beijing and Hanoi. In 1974, China occupied the formerly Vietnamese Paracelsus Islands after a clash that left dozens dead. In 1988, another clash at Johnson Reef in the Spratlys left about 70 people dead. More recently, in 2014 the movement of the Chinese oil rig Haiyang Shiyou 981 near the Paracelsus Islands had generated protests in Hanoi, and made one imagine an early parallel to the annexation of Crimea. Vietnam reacted in a composed manner to Chinese provocations. Damaging the relationship with Beijing over rocks in the South China Sea would have more costs than benefits.

When, after February 24, Beijing announced new military exercises near the Vietnamese coast, the sound of strikes in Ukraine seemed closer. In the security sector, it is necessary to expand the portfolio of partners, but embracing Washington would expose the country to possible repercussions on relations with China. At the same time, breaking away from Moscow after decades of near-monopoly proves difficult. Russia has stated that it is planning military exercises with its ASEAN partner by the end of 2022, and Hanoi has not retracted. Vietnam's strategic ambiguity allows for multiple partners, and the centrality given to the South China Sea issue at the latest meeting between Indian Prime Minister Narendra Modi and Vietnamese Communist Party Secretary Nguyễn Phú Trọng is no accident. Getting closer to India, however, does not mean getting closer to QUAD, and while the Vietnam-India strategic partnership is strengthened and the air in the South China Sea becomes tense, Hanoi and Beijing congratulate each other on 72 years of diplomatic relations and promise to strengthen cooperation. Vietnamese bamboo also endures in salt water, but it remains to be seen how long this ambiguity will be sustainable.

New tech, how Vietnam is becoming self-sufficient

Vietnam's digital economy is steadily expanding, thanks in part to the acceleration brought on by the pandemic

Vietnam is definitely at the top of the list of Southeast Asian countries in terms of presence of cutting-edge companies in the technology and digital sectors, so much so that it is almost self-sufficient. In fact, to date it already has as many as 64,000 digital companies, and the figure continues to expand, to the point that the country ranks 25th among the 50 most digital companies in the world, according to consulting firm Tholons. Moreover, Vietnam's digital economy is growing rapidly, and is estimated to lead Southeast Asian countries in the next 10 years, according to the e-Conomy SEA 2021 report by Google, Temasek and Bain. Vietnam's digital market is thriving thanks to strong growth in the e-commerce, fintech and education technology sectors. In parallel, the population of social media users is also growing rapidly, reaching 78% of the total population in February 2022. Certainly there are important socio-demographic factors facilitating the expansion of the digital market, given that the population is young (70% of citizens are under 35 years old), educated (literacy rate in the 15-35 age group is over 98%) and accustomed to technology (more than 60% of the population uses smartphones). In any case, the phenomenon is worth keeping an eye on since, according to a report by the company Alphabeta, digital technology could potentially bring over 74 billion dollars to Vietnam by 2030, mainly in the areas of industry, agriculture and food and education.

As has happened in many countries, COVID-19 has been a significant driver of digital transformation in Vietnam. Since the pandemic broke out, Hanoi has seen a sudden acceleration in the adoption and deployment of new digitization tools in both the private and public sectors. It is estimated that as early as June 2021, about two-thirds of private enterprises in Vietnam had access to technologies related to the digital economy, a huge jump from the pre-COVID-19 period. As a result, the digital payments market is also growing, already reaching $620 billion in 2020 and is expected to reach the value of $1.2 trillion in 2025.

The digitization process is also accelerated by the proximity of the many local digital companies, which create a real industrial agglomeration that encourages the spread of skills and innovations. Among the best-known companies is the FPT Group, which stands for Corporation for Financing and Promoting Technology, the largest IT services company in Vietnam, whose core business is the provision of ICT-related services. FPT deals with technological innovations such as automation, artificial intelligence, blockchain technology, cloud computing, and other services aimed at improving the efficiency of life for citizens, businesses, and government. Many of these companies, in fact, work with the public sector with the common goal of developing a digital government and economy, but also increasing the efficiency of public services and the IT skills of officials and managers. Some ongoing projects already include the development of smart cities and traffic, as well as state-of-the-art healthcare and education, with the aim of improving the lives of millions of citizens as well as the country's competitiveness.

However, there are still many obstacles to reaping the full benefits of digital technology, for example, bureaucracy and lack of specialized human resources. In addition, some localization and data protection laws discourage foreign companies from investing in the local digital market, as they protect local businesses but undermine further profits.

However, the future looks bright, and the Deputy Director of the Department of Enterprise Management, Nguyen Trong Duong, has announced that with policies to support Vietnam's digital enterprises and tech startups, the country's digital economy could reach 26.2% of GDP in the next three years.

Vietnam: in the footsteps of Carlo Urbani

Development cooperation is one of the pillars of Italy's strategic partnership with Hanoi

Editorial by Antonio Alessandro, Italian Ambassador to Vietnam

On March 7, an Italian delegation visited the Province of Thua Thien Hue to participate in a ceremony in memoriam of Carlo Urbani and revive relations with one of the most dynamic regions in central Vietnam.

The ceremony was held in the epidemiology center named after Carlo Urbani, with the emotional participation of Italian and Vietnamese authorities and his widow, Giuliana Chiorrini. The WHO Representative in Vietnam shared the testimonies of people who had worked with the famous Italian epidemiologist. Carlo Urbani was awarded the Grand Cross of the Order of the Star of Italy by President Sergio Mattarella in recognition of his extraordinary work in containing the SARS epidemic in Vietnam in 2003.

It emerged that the work of Carlo Urbani, almost 20 years after his death, is still relevant in the face of new pandemics and wars that are shaking the world. Consul General Enrico Padula recalled the vital contribution of Carlo Urbani and the whole Italian community to the strengthening of friendship relations between Italy and Vietnam.

As a concrete sign of Italian solidarity and in the footsteps of Carlo Urbani, a new Department of Gynecology and Obstetrics is being built in the Hue University Hospital. The works are promoted by the Italian Agency for Development Cooperation (AICS) as part of a 13 million euro project for the improvement of health services in the central regions of Vietnam.

Development cooperation is one of the pillars of Italy’s strategic partnership with Vietnam. We have been active since the 1990s and we carried out many initiatives in the fields of health, training, environmental rehabilitation, among others, thus contributing significantly to the country's development. Most recently, Italy donated 2.8 million vaccine doses to Vietnam.

During the visit, a joint research project was launched between the Polytechnic University of Marche and Hue University with the aim of managing cultural heritage data. The province has a strong tourist vocation and is home to one of the best-preserved imperial citadels in the East.

The results of the visit and prospects for future collaborations were discussed with the President of the Province, Nguyen Van Phuong.

The Embassy is committed to strengthening relations with the 63 provinces of Vietnam, which are the core of the country's economic dynamism.

Vingroup, a success story from Vietnam

Vingroup is a Vietnamese corporation specializing in technology, industry, real estate development, retail and services, ranging from healthcare to hospitality.  

The history of Vingroup begins with the founding of Technocom Corporation in 1993 in Ukraine, thanks to an ambitious group of young Vietnamese. Technocom started with food production, achieving great success with the Mivina brand. In 2000 it moved to Vietnam with two strategic brands, Vincom and Vinpearl, and the ambition to contribute to the development of the country. In January 2012, Vinpearl JSC merged with Vincom JSC to form Vingroup Joint Stock Company, becoming - with a market capitalization of approximately $ 3 billion - the largest privately held company in the nation. Pham Nhat Vuong, the first billionaire in Vietnam's history, is the Group's president, founder and largest shareholder.

A multi-sector company with 19 member brands, Vingroup is recognized as one of the most dynamic, successful, and well-capitalized companies in Vietnam. The main axes of its business are technology and industry; trade and services; social enterprise. In 2013, Vingroup raised approximately $ 200 million from the US investment fund Warburg Pincus to invest in four areas: commercial facilities, tourism, hospitals, and schools. The Vietnamese giant is currently concentrating resources on automobiles and real estate businesses. At the end of 2019, Vingroup announced its intention to stop retail operations - the largest in Vietnam - and last May it decided to stop the production of smartphones and televisions as well. 

Vingroup entered the automotive industry in 2019, founding the subsidiary VinFast and its automotive plant in Haiphong with an annual capacity of approximately 250,000 vehicles. Profitability is still an issue. The company sold around 30,000 vehicles last year, enough to satisfy only around 10% of the Vietnamese market. Vingroup's automotive-focused manufacturing segment posted a pre-tax loss of 11.3 trillion dong in the first half of 2021, more than double the previous year. Pham Nhat Vuong recently told local media that further losses in the automotive sector are expected in the near term.

The company's future is currently focused on the electric vehicle business, launched in late 2021. Le Thi Thuy, Vingroup Vice President and CEO of VinFast Global, recently said that Vinfast will officially become a 100% electric car company by the end of 2022, definitively ceasing the production of petrol vehicles. Around 35,000 electric vehicles were ordered at the beginning of January, including orders from Western markets. The goal is raising $ 1.5 billion through bonds and strengthen its electric vehicle business with a new lithium-ion battery plant. The five-year dollar-denominated bonds will help finance the automotive unit that Vingroup hopes to list in the United States. It has already invested $ 5 billion in this sector. The issue of international bonds is expected in the first quarter of this year. VinFast has just unveiled five electric vehicles at CES 2022 in Las Vegas, an important debut that intends to develop a sales network in the United States and Europe. Delivery of the first two electric vehicles, the VF 8, and the VF 9, is expected by the end of the year. In December, VinFast began sales of its electric vehicles in Vietnam, becoming the first national car company to sell EVs in the country. The Vietnamese giant is thus preparing to face an increasingly competitive market. By entering the electric vehicle market before the pecking order is firmly established, Vingroup aims to carve out a strategic position that will drive its future actions.

Nguyen Thi Phuong Thao, the richest businesswoman in Vietnam

Among the “100 Most Powerful Women in the World”, Nguyen Thi Phuong Thao revolutionized the air travel industry in Vietnam.

Nguyen Thi Phuong Thao is Chairwoman of Sovico Group, Standing Vice Chairwoman of HD Bank, Founder and CEO of VietJet Air. She made history in a traditional male-dominated business, becoming the only Vietnamese woman to have started and run a low-cost airline.

VietJet – selling flights for under $ 50 – is the reason why millions of Vietnamese have boarded a plane for the first time in the past decade, forever revolutionizing the aviation industry in Vietnam. With this success, she became Vietnam's first billionaire and Southeast Asia's richest self-made woman. Forbes sets her wealth at $ 2.5 billion, which originates from real estate, beach resorts, energy projects and other Sovico holdings, in addition to the banking sector.

Thao was born in 1970 in Hanoi into a wealthy family. She grew up in the Cold War social context of the Vietnamese who moved to the old Soviet bloc, where she earned three degrees. With her distinctive rimless glasses and short bangs, Thao is defined by colleagues as a workaholic who often works until late at night. Mother of three, Madame Thao runs a business empire with her husband, always maintaining a busy schedule.

Her airline, launched in 2011, is now larger than the national airline Vietnam Airlines in terms of passengers carried. It grew up in part through a bold service: bikini-clad flight attendants for flights to beach vacation destinations. A risky stunt that resulted in a fine from the government but got VietJet free advertising all over the world and, more importantly, sold tickets.

From a handful of domestic routes at launch, VietJet has expanded to cover more than 120 destinations. Positioned from the beginning as a regional and international carrier, Thao has outlined a very precise strategy: the expansion into all ASEAN markets within a radius of 2,500 kilometres, so that it can create worldwide bases that cover half of the world population. The company would already be in talks with partners across the region to expand outside of Vietnam. Thao's goal is to make history a second time by transforming VietJet into Vietnam's first global airline. “If we establish an airline in Europe, we can fly to any country. With our aircraft, costs, handling capabilities, and providing new services, I am totally confident that we can compete in other markets, in Europe or the US,” said Thao.

In 2017, VietJet debuted on the Ho Chi Minh City Stock Exchange with a market capitalization of $ 1.4 billion. In 2018 it carried 23 million passengers, accounting for 46% of Vietnam's passenger market. Although this number represents about half of the passengers AirAsia – Asia's leading budget carrier – carried in 2018, Vietjet has grown the fastest. The company's shares have more than doubled since its 2017 IPO, reaching a market value of $ 3 billion, the second biggest in Southeast Asia, after Singapore Airlines.

In recent weeks, a donation – 155 million pounds – from the Thao holding to a college at the University of Oxford has provoked mixed reactions. After this grant, Linacre College, which specializes in postgraduate courses, will become Thao College. The MOU between the two institutions was signed during Thao's visit to the UK to coincide with the UN's COP26 climate summit. VietJet, which has an ambition to expand into Europe, also signed a $ 400 million jet engine deal with Rolls-Royce on the sidelines of the summit.

On and off social media, some Vietnamese have appreciated the charity initiative. Others have questioned the reason for donating to a country that has 14 times the average income of Vietnam, doubting on sending such a sum out of the country, which has strict capital controls. A post on the government website claimed that £ 7.5 million of the donation will fund scholarships for Vietnamese and others in the region. Voices from academia have also expressed concerns about the renaming of an entire college within the federated Oxford system, as this action could suggest what might be for sale at Oxford. Linacre College said it received little funding compared to other Oxford institutions, defining the donation - agreed as part of a memorandum of understanding with Sovico - "transformative".

Thao is well known for her various philanthropic initiatives over the years and believes in a corporate culture with strong social responsibility for sustainable development. Strongly impressed with the academic environment of the University of Oxford, Madame Thao said Oxford is the right place to make her contribution to humanity through education, training, and research. This partnership will also serve to pursue one of VietJet's most important objectives, the reduction of carbon emissions. The Sovico Group, a founding partner of VietJet, is committed to ensuring that all its subsidiaries reach net zero carbon by the end of 2050 with the support of leading Oxford academics.

How Vietnam has become a crucial market for the EU

Vietnam is a case history in Southeast Asia. With political and economic successes, it has gained the trust of the EU and is preparing for the global stage

Vietnam is the flagship of Southeast Asia. The difficult years of decolonization seem a remote past. Today, Hanoi has a prosperous economy, stable political institutions and an effective international projection that has led it to sign important trade agreements. 2020 was a challenging year for everyone, but not for Vietnam, which was able to effectively prevent and contain the coronavirus pandemic (even if a new wave is now underway in the country) and then restart economically. Vietnamese economy grew by 2.9%, better than anyone else (including China and Taiwan) in Asia.

The confidence in multilateralism and the activism shown during the ASEAN presidency (which led, among other things, to the conclusion of the agreement on the Regional Comprehensive Economic Partnership) earned it the attention of the international community and the trust of the financial markets, especially the European ones.

Last winter, the outcome of the 13th Congress of the Vietnamese Communist Party summarized the dynamics underway. As noted by analysts, usually Communist Party congresses do not usually thrill the financial markets, but this year was an exception. The launch of an infrastructure development plan attracted foreign investors and projected the allocation of 119 billion dollars, as well as the commitment to increase the contribution of the private sector to the GDP growth from 42% to 55% by 2025. The free trade and investment protection agreements signed with the EU in 2019 are included in this scenario. According to Secondo Dezan Shira & Associates, there has been sustained growth in the flow of European FDI into Vietnam. This has been possible thanks to the revision of the normative environment that has welcomed more international players, thanks to greater protection on intellectual property and the increase in the maximum foreign shareholding in commercial banks from 30% to 49%.

In general, Vietnamese commercial turnover has grown dramatically over the past 10 years. The fastest-growing industries are heavy industry and mining, which generated $ 57.58 billion in exports - a volume up 33% from last year, followed by the light and craft industries (27.5%) and agriculture and forestry (8.8%). The EU is Vietnam’s third-largest export destination, with $ 12.6 billion in entry - up 18.1% year-on-year. As Vietnam Briefingreports, the main EU exports to Vietnam include high-tech products, machinery and electrical equipment, aircraft, vehicles and pharmaceuticals. Conversely, the main Vietnamese exports to Europe are represented by telephone equipment, electronic products, footwear, textiles and clothing, coffee, rice, seafood and furniture. In this regard, a high amount of FDI in Vietnam comes from Italian companies, namely in the fields of the pharmaceutical, transport, machinery and food products industry. Here, the Italian economic system would have broad opportunities for growth, particularly in sectors with a high level of specialisation.

The path towards economic liberalisation has not been linear. The Socialist Republic of Vietnam has often followed the footsteps of China, starting with the economic reforms inaugurated around the 1980s, and was inspired by the experience of its socialist neighbour in defining productive structures: a growth model based on heavy industry, a communist political philosophy, low labour and land costs that now support high exports. All these elements make Vietnam the worthy heir to the so-called "Chinese model", but Hanoi has its own vision of the future.

The national leadership has been able to carve out a certain autonomy in the regional geopolitical context. Through enviable diplomatic balancing skills, he dodged the flattery of former US Secretary of State Mike Pompeo while remaining firm with China on matters concerning the South China Sea. Thanks to its strategic role, Hanoi has avoided US sanctions, despite allegations of currency manipulation. Moreover, Vietnam was indirectly involved in the commercial tension between Washington and Beijing, benefiting from the re-localization of some multinationals that moved from southern China to more favourable political and commercial contexts. Compared to Beijing, Hanoi adopted an assertive but responsible approach, proving that the leadership’s projects aim at carving out an autonomous space within the regional context.

Not surprisingly, Vietnam is becoming the EU target market in Southeast Asia. Despite these similarities with the Chinese model, Hanoi’s attitude has proved to be more easily integrated with the context of multilateral cooperation with the EU. With respect to human rights and workers' rights, there are some grey zones, not fully protected by a centralist regime that does not admit clear dissent. But in trade and geopolitical terms, Vietnam has proved to be a stable and reliable regional partner, though uncertainties remain, from the coup in Myanmar to the positioning of the Philippines.  

The current growth of the EU's FDI in Vietnam seems to be just the beginning. If even the contingencies of the pandemic did not hinder its progress, one has to look even more carefully at the future developments of this emerging Southeast Asian economy.

L’ambiziosa transizione tecnologica del Vietnam

Il Vietnam lancia la Strategia nazionale sull’intelligenza artificiale, inaugurando una promettente transizione tecnologica che conferma il suo ruolo di punta tra le economie ASEAN

Il Primo Ministro vietnamita Nguyễn Xuân Phúc ha emanato la Strategia Nazionale su Ricerca, Sviluppo e Applicazione dell’Intelligenza Artificiale (AI) per il 2030. Dopo le straordinarie prestazioni nell’affrontare la crisi sanitaria dovuta alla pandemia, il Vietnam rilancia il suo ruolo nel Sud-Est asiatico, determinato a divenire centro propulsore per l’innovazione e lo sviluppo dell’intelligenza artificiale. Il piano è stato lanciato il 17 marzo 2021 in vista della convocazione dell’Assemblea nazionale – i cui lavori si tengono dal 24 marzo all’8 aprile 2021. L’Assemblea, la prima dopo il 2016, ha l’obiettivo di raccogliere i risultati positivi degli ultimi anni che hanno visto il Vietnam attestarsi tra le economie asiatiche più performanti del 2020, e di rilanciare il programma di sviluppo per i prossimi cinque anni.

La Strategia è infatti in linea con i programmi di modernizzazione annunciati nell’ambito del XIII Congresso del Partito Comunista vietnamita. L’ambizioso programma di sviluppo verrà promosso all’insegna del motto “solidarietà, democrazia, disciplina, creatività e sviluppo”, e la sua implementazione dovrebbe guidare la rotta del Vietnam verso la modernizzazione e la digitalizzazione prefigurate dalla nuova leadership. La promozione del piano Industria 4.0 rientra infatti in un progetto di ampio respiro che coniuga questioni di sviluppo socio-economico e sicurezza ad aspirazioni strategiche di rilevanza globale, oltre che regionale. 

Dal punto di vista della politica interna, l’intelligenza artificiale è considerata, a ragione, una tecnologia chiave per l’aumento della produttività del settore pubblico e per il rafforzamento della sicurezza nazionale. La Strategia si declina perciò in due ordini di obiettivi, quelli di breve termine da implementarsi entro il 2025 e quelli di medio termine per il 2030, anno di celebrazione del centenario del Partito Comunista del Vietnam. La roadmap prevede, tra le altre misure, l’affermazione di 10 marchi e servizi di AI entro il 2030 e la costruzione di tre centri di archiviazione di big data nazionali per uniformare l’accesso di aziende al computing e ad altre prestazioni. Inoltre, nel realizzare questo ambizioso programma, la leadership vietnamita delega a ciascun ministero l’implementazione di varie misure, che spaziano dalle responsabilità tecniche affidate al Ministero della Scienza e della Tecnologia, a quelle riguardanti le risorse umane delegate al Ministero dell’Istruzione e al Ministero dell’Informazione e della Comunicazione: ciascuna articolazione statale trova il proprio posto nella dettagliata Strategia 2030.Quello dell’AI è un settore dall’enorme potenziale per il Vietnam. Secondo la Banca Mondiale, grazie alla sua profonda integrazione con l’economia globalizzata, il Paese ha dimostrato una straordinaria resilienza alle conseguenze economiche del Covid-19, che hanno lasciato in ginocchio molte altre economie internazionali. E’ stato uno dei pochi Paesi a non subire una recessione, avendo vantato un tasso di crescita del PIL che è oscillato tra il 2% e il 3% nel 2020, e per questo è tutt’ora uno dei mercati emergenti più promettenti nel Sud-Est asiatico. Questo rinnovato impegno nel settore dell’intelligenza artificiale conferma il ruolo centrale del Vietnam tra le economie ASEAN, e dimostra come il Paese – la cui leadership ha dato priorità a crescita economica e stabilità –  abbia anche per investitori e imprenditori stranieri un grande potenziale in attesa di essere sviluppato.

Vietnam confirms its leadership

The XIII Congress of the Vietnamese Communist Party discusses the transformation of Vietnam into a great international power

2021 will be an important year for understanding the direction the Southeast Asian countries will take in the future, which appears uncertain now more than ever. Vietnam makes no exception and, against all odds, concludes the year of the pandemic with a growth in the economy of almost 3%, by showing an exemplary management of the health emergency. In this context the XIII Congress of the Communist Party of the Socialist Republic of Vietnam took place, which ended on February 2nd, after the appointment of the main party organs.

Vietnam has what is informally called a "four-pillar" political structure, which includes as many dominant leadership positions: the General Secretary of the Party, the President of the State, the Prime Minister and the President of the National Assembly. Since 2018, however, following the sudden death of President Tran Dai Quang, the positions of Secretary General and President of the State have been combined into a single pillar.

At the end of the Congress the figure of Nguyen Phu Trong emerged, reconfirmed for the third time as Secretary General and President for the new 2021-2025 term, becoming the longest-serving party leader in the history of Vietnam. The re-election of the 76-year-old former Secretary General came as a surprise to everyone, first of all for Trong himself, who supported instead the appointment of his colleague Tran Quoc Vuong. However, as the National Congress later declared, the choice fell on a figure already known and able to ensure stability for the party and the country in a time of profound global uncertainty, among a pandemic crisis and an economic recession. However, it remains possible that Trong resigns during his new term if a suitable candidate is found to fill the position.

The second notable name within the Vietnamese political landscape is Nguyen Xuan Phuc, reconfirmed once again as Prime Minister. Nguyen Thi Kim Ngan, head of the National Assembly since 2016 and the first woman to hold this position, remains in power.

Through the words "Solidarity, Democracy, Discipline, Creativity and Development", the National Congress has set itself the goal of elaborating, on the basis of the resolutions approved in the past years, the new guidelines that will direct the Party's action over the next term. A number of topics were examined, including the leadership skills of the members of the Politburo, the transparency of the political process and people's trust in the Party, in the State and in the socialist ideology. Furthermore, in the current emergency situation, the Party will undertake to seek the prosperity of the country and the happiness of its citizens, promoting solidarity and national unity. The objectives of industrialization, modernization, national security and the creation of a stable and peaceful environment in the Southeast Asian region, as well as the transformation of Vietnam into a great international power oriented towards socialism, remain at the fore. As for the implementation of the plan, the XIII National Congress has elaborated a complex of 12 strategic directions for national development in the 2021-2030 term. In this regard, the need to strengthen - and build, if they were not already present – institutions, in order to encourage the sustainable development of Vietnam, the socialist market economy, industrial transformation, emerging enterprises and digital transition has been highlighted. Furthermore, important changes are required in the area of education and training of qualified human resources. The Head of State, then, recommended: to stimulate human progress in all its facets, without neglecting the Vietnamese cultural identity; to fight vigorously against climate change, natural disasters and epidemics; to prevent conflicts, safeguard sovereignty and territorial integrity; to exploit the earth's natural resources and improve the quality of the environment; and finally, to implement a foreign policy characterized as much by independence and self-determination as it is dedicated to strengthening multilateral relations and integration into the international community.

But there is more. Long-term goals are also foreseen, such as transforming Vietnam into a modern upper-middle-income economy by 2030 and achieving a high per capita income by 2045. Certainly, ambitious goals, but also likely to happen for a State that shows steady GDP growth, despite adversity. Not to forget the interpretation offered by President Trong, according to whom all of this becomes achievable only through love for the homeland, resilience and national unity.

Vietnam is the new Asian locomotive

Despite Covid-19, Vietnam's economy thrives and records the best economic growth of 2020 in Asia

Vietnam confirms itself as the Asian economy with the best performance of 2020, as well as one of the few to have been only marginally affected by the economic crisis. Thanks to the successful fight against the Covid-19 pandemic, the Asian country was one of the very few nations in the world to register GDP growth in the past year, thus ensuring, in 2021, an advantage over regional and global competitors.

The health emergency has drained the economies of much of the world, nonetheless Vietnam has successfully managed to contain the spread of infections, with a total of slightly over 1,800 cases and just 35 deaths to date. Much lower numbers than what we are used to, especially considering Vietnam has a population of almost 98 million people. Building on previous epidemiological experiences, such as the 2003 SARS, the Vietnamese government was able to quickly implement a detailed emergency plan, weeks before other nations considered taking any measure. The borders with China were rapidly closed and, in addition to the restrictions on international transits, the government ordered rigorous monitoring of the infections, starting a scrupulous tracing of the spread of the virus. All these efforts have largely paid off and have allowed the country to record an economic growth of + 2.9% compared to 2019, which is even higher than the Chinese growth rate in the same period. The timely response to the pandemic has also helped to attract a large share of foreign direct investment and to increase the import-export sectors.

In the latter area, the expansion of the Vietnamese economy is largely driven by the numerous trade agreements concluded in 2020. The free trade agreement signed with the European Union, which entered into force in June last year, was followed by the Regional Comprehensive Economic Partnership (RCEP), which created the largest trading block in the world with 15 Asian economies. Furthermore, due to Brexit, the Asian country has signed a new free trade agreement with the United Kingdom, replacing the one previously ratified with the EU. Finally, Vietnam has signed bilateral agreements with Japan and South Korea and joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership together with other Pacific nations.

Even the services sector, which was most affected by the pandemic, managed to recover in the last quarter of 2020 and, despite a natural contraction in tourism for 2021, analysts calculated a drop in GDP only of 1, 5% lower than the potential if the health emergency had not occurred. 

Despite the unfavorable circumstances, therefore, a rather bright future seems to be looming for Vietnam. The British consultancy Center for Economics and Business Research (Cebr) has in fact estimated an exponential growth for the Asian state, which would establish itself as the 19th world economy by 2035. With a potential increase in GDP of 7.7% in the next 10 years and of 6.6% in the following years, Vietnam should be able to easily overtake other regional powers.

These development goals were highlighted during the 13th Congress of the Communist Party, which ended on Sunday 31 January with the re-election for the third term of Nguyen Phu Trong as General Secretary of the Party. The Congress defined Vietnam's economic-political trajectory for the next five years, pushing for the improvement of the country in terms of scientific and technological development.

Reasonably, the economic growth will go hand in hand with the achievements on the international stage. In this context too, 2020 was a positive year for Vietnam; it gained greater visibility in foreign relations by holding the Presidency of ASEAN and it was selected as a non-permanent member of the United Nations Security Council for the two-year period 2020-2021, successfully carrying out all international duties. With regard to the Presidency, Vietnam has promoted the reactivity of the Association, limiting the damage of the pandemic and ensuring, at the same time, the elaboration of the agenda set for 2020. But, among the greatest successes that Hanoi can boast, there it is undoubtedly the drafting of a United Nations resolution for the establishment of the International Day of Epidemic Preparedness, set for December 27th. To sum up, among diplomatic and commercial accomplishments, Vietnam proudly closes one of the worst years in history.