Vietnam´s Road to Development
HO CHI MINH CITY, Vietnam — Like many developing countries, Vietnam is dealing with challenges that are caused by its own success: Exponentially growing market demand and the influx of direct foreign investment - to a large degree due to Vietnam’s recent WTO accession - have caused shortages in the areas of infrastructure and energy.
Most of the economic experts we talked to mentioned Vietnam’s lack of roads, ports, railways and airports as one of the biggest detriments to the continuation of rapid economic development. Dr. Le Dang Doah, one of Vietnam’s leading economists, is concerned about what he calls Vietnam´s “infrastructure bottleneck”. We heard from an official that investments in infrastructure - as opposed to education or health projects - are often seen as rather “unsexy” by some foreign aid donors. When it comes to the Vietnamese government’s plans to build new ports and roads, an American business woman complained that the government tended to over-promise and to not always stick to its own deadlines.
Energy in Vietnam is also in short supply. Despite making best use of hydroelectric power, the Vietnamese power sector relies on imports from China and Laos among other countries while oil and electricity prices continue to climb. Slowly, investments are also triggering into the areas of wind, solar and bio-energy. Vietnam plans to use nuclear power in the future; the first nuclear facilities will be built by 2018. But Vietnam has been and will continue to face energy constraints.
Speaking of infrastructure and energy supply bottlenecks - what about traffic? When walking the streets of Hanoi and Ho Chi Minh City, where millions of motor bikes already make their way through heavily polluted streets, one wonders what will happen once most Vietnamese can afford to buy cars. So far, prices for automobiles in Vietnam were among the highest in the world. The local production was protected by high taxes on imported cars, but taxes have gradually been lowered - partly due to WTO demands to make the local auto market more competitive. Thus, purchasing a car in Vietnam will become more and more affordable. When asking a business woman if - despite the overwhelming traffic and the vast pollution - most Vietnamese would buy a car if they could, her answer was: “Oh yes, immediately!”