RESEARCH PAPER

VIETNAM ‘S COMPETITIVE ADVANTAGE

FOREIGN TRADE UNIVERSITY

PREPARED BY : VO MINH PHUC

MSSV : 1801015689

April 24th ,2020

VIETNAM’S GENERAL ECONOMY AND THE COVID 19

1.1 Vietnam’s overview economy

For the past 30 years, the dramatic innovation and upgrade in Vietnam’s economy has
been extraordinary. Since Doi Moi time ,Vietnam has applied the extreme changes in
politics and total economy , from old model to whole new one, allowing international
trade with powerful and competitive countries around the world , importing and
exporting goods , leading to diversity in products.

Fortunately, the state of poverty around the time between 2002 and 2018 has positively
reduced due to decisive innovation. Specifically, the year 2018 saw a plain decrease by
64 % ( from 70% to only 6 %).

In general, the prospects for Vietnam economy seems potential and has a tendency to
grow rapidly , especially during the medium- term even though there are some
continuous limitations in growth. Additionally, Vietnam is a country that has seen the
advent of incredible change in social and demographic aspects. Number of people with
higher life expectancy increases, and the emerging middle class as well.

More importantly, Vietnam is on the point of focusing on manufacturing ever since the
advent of industrial revolution, leading to biggest industries like electronics, machinery,
steel.

To be honest, Vietnam is a developing country with full potentially competitive

advantage in the international arena.

COVID -19

Covid 19 has certainly caused a severe impact on global economy , including our
country, Vietnam. Therefore, this pandemic has forced Vietnam to take a wide range of
measures to put this outbreak under control. As one of the Asia’s fastest growing
economies , Vietnam still suffer a great deal of tension from this fallout . However, if this
pandemic flu is contained, the rebound growth rate of Vietnam’s economy will rise
surprisingly. On the contrary , provided that this contagion maintain for a long period of
time , the economy of such fast-growing country like VietNam will postpone till many
years, which is a conspicuous setback.
 PORTER’S DIAMOND MODEL

According to Porter, to be capable of competing in the international arena, these criteria ,

also known as set of focal advantages have to be satisfied. If domestic companies in a
nation are able to possess this set , there is high likelihood that it will sustainably thrive
and make breakthrough in terms of innovation and upgrade. Therefore, leading to
beneficial competitiveness which is said to be essential when battling with other strong
competitors. 4 main components , along with two subsidiary ones , will form national
environment determining which companies can be competitive and born.
FUNDAMENTAL STATISTICS

COMPARATIVE ECONOMIC PERFORMANCE

REAL GDP GROWTHS RATES

COMPARATIVE ECONOMIC PERFORMANCE

COMPARATIVE LABOR PRODUCTIVIY

VIETNAM EXPORT PERFORMANCE
 COMPARATIVE FOREIGN DOMESTIC INVESTMENT

FDI by destination Table 1.1. FDI flows in ASEAN, 2015–2018

The flow of foreign domestic investment
coming to ASEAN MEMBER STATES has
been enormous and versatile since the year
2018. Specifically, different forms of
investment from potential investors has
been conducted powerfully in ASEAN
nations. Brunei, Cambodia, Indonesia,
Singapore , and above all is our country,
Vietnam took pride on being honored to
receive huge inflows in 2018 than in 2017,
much higher than that of four other members
last year.
 FDI in the CLMV countries
Table 1.2. FDI flows in ASEAN, 2015–2018
According to the table 1.2 , by successfully
2015 2016 2017 2018
reaching at over $15billion in terms of
Brunei Darussalam 0.2 -0.2 0.5 0.5
flows of foreign investment, Vietnam was Cambodia 1.7 2.3 2.7 3.1
recognized as the largest recipient in the Indonesia 16.6 3.9 20.6 22.0

organization ASEAN, only after Singapore Lao People’s Democratic

Republic
1.1 1.1 1.7 1.3
and Indonesia Malaysia 10.2 11.3 9.3 8.1
Myanmar 2.8 3.0 4.0 3.6
Philippines 5.6 8.3 10.3 9.8
Singapore 59.7 73.9 75.7 77.6
Thailand 8.9 2.8 8.0 13.2
Viet Nam 11.8 12.6 14.1 15.5
ASEAN 118.7 119.0 146.9 154.7
BUSINESS COMPETITIVENESS

2015 2016 2017 2018

Cambodia 1,701 2,280 2,732 3,103
Lao People’s Democratic
1,079 1,076 1,695 1,320
Republic
Myanmar 2,824 2,989 4,002 3,554
Viet Nam 11,800 12,600 14,100 15,500
Total CLMV countries 17,405 18,945 22,530 23,476

2015 2016 2017 2018

Cambodia 1,701 2,280 2,732 3,103
Lao People’s Democratic
1,079 1,076 1,695 1,320
Republic
Myanmar 2,824 2,989 4,002 3,554
Viet Nam 11,800 12,600 14,100 15,500
Total CLMV countries 17,405 18,945 22,530 23,476