Ho Chi Minh City. / Wikipedia

Vietnam, napalm to nappa

Vietnam was one of the few countries to produce positive GDP growth, 2.6%, in 2021

JEREMY BLATCH

I recall my first night in Vietnam, sipping a large whisky on the terrace of a hotel which had seen better times. A relic of French Colonial rule and now the only hotel in Saigon with a barman. It was September 1974. The few journalists that remained in the city and a handful of off-duty US officers stood around in animated huddles at the old cocktail bar. A flustered voice from a local radio station broadcast what we all knew but didn't want to speak about. The Vietcong were edging ever closer to the outlying districts of the capital. It took a further seven months for Saigon to fall.

The people of Vietnam are no strangers to foreign occupation and with it political repression and economic exploitation. First by the Chinese in 111 BC. Subsequently governing itself only to be colonised by the French for seven decades following the Treaty of Hue in 1874. After the defeat of the French at the battle of Dien Bien Phu in May 1954, Vietnam only knew death and devastation until the US left ignominiously after failing to defeat the North Vietnamese Regular Army.

Unification of the country in 1975 saw an industrial north devastated and an agricultural south reduced to subsidence farming by a hostile US foreign policy. The economy faced near collapse through an adopted Chinese Communist model. After decades of misery a democratically elected government established a free market economy. The last 25 years have seen Vietnam grow from one of the poorest countries in Asia to one of the most prosperous. Perhaps exhibiting the same perseverance which managed to grind the world's superpower into submission.

Saigon is now Ho Chi Minh City. The dilapidated hotel has long disappeared. The dirt road has been replaced by a modern two lane highway. The shanty huts have given way to shopping malls, where an emerging middle class sporting Italian luxurious nappa leather attire.

Vietnam's equity market peaked at a 10 year high in 2016, outperforming all other Asian markets. Its economy grew at 6.7% in 2016 in contrast to Europe's mere 1.5%. It was one of the few countries to produce positive GDP growth, 2.6%, in 2021. In 2022 the local currency depreciated 9.1% against the US Dollar assisting exports from many manufacturing jobs that have moved from PRC. Geopolitical risks continue to be potential head wind to growth. Goldman Sachs, in their latest report, have forecast that by 2070, the PRC will be the leading world economy with 60% of middle class global consumption made in the ASEA economies.