On January 23, 1973, US President Richard Nixon announced in an address to his compatriots the end of the Vietnam War. But at that point, it was only a matter of withdrawing American troops - peace came two years later, and the country was divided and ruined.
Years of immense poverty followed, which lasted until the 1990s, historian Rainer Zitelmann told German public broadcaster ARD. "In 1990, Vietnam was the poorest country in the world - poorer than all African countries. GDP per capita was only $98 - less than in Somalia or Sierra Leone."
The change began in 1986
Today, 35 years later, the average annual income is around $5,000. This is still small, but it represents a huge improvement compared to the values of 1990, the German media points out.
The change began in 1986. Against the backdrop of the catastrophic economic situation, the government saw itself forced to take measures - with the so-called opening and renewal policy, under which the country opened up to foreign companies.
Peter Bürstede, investment consultant for German companies in Vietnam, noted to ARD that the real breakthrough came much later. "The large influx of foreign investment only began with the country joining the World Trade Organization in 2007. And the last huge boost came in 2018 with the punitive tariffs imposed by the first Trump administration on Chinese products."
Can we expect a new boost now, given that Vietnam is also benefiting from the trade conflict between China and the US? The plans are ambitious, explains ARD - by 2045 the country wants to rank among the industrial nations. And that's not all, says Bürstede: "By 2050, Vietnam wants to achieve climate neutrality - like many other countries in the world. But Vietnam's economy still has a long way to go, as half of its electricity needs are still covered by coal."
Vietnam seems to want to get ahead of itself, the German media outlet further comments. By 2050, the country also wants to become one of the major global players in chip production. Dietmar Schwank from the Austrian Chamber of Commerce in Hanoi told ARD that he has some doubts about this. "More than 40 foreign semiconductor companies have already invested in Vietnam, but the country needs around 50,000 semiconductor engineers by 2030 to be able to cope with the planned plans."
Low wages, high growth
The largest German semiconductor manufacturer Infineon also has a representative office in Vietnam. Overall, Germany is well represented in the country, says Bürstedt. "Every year, between five and ten factories are added, the development is relatively constant, but the German commitment cannot be compared to that of the Japanese, Chinese, Taiwanese or Koreans, who are the biggest investors here."
For now, Vietnam remains a country of low wages - their level is half that of China. The country attracts with large industrial zones, good infrastructure and stable growth. Over the past ten years, it has averaged 6%. And this means that Vietnam can be counted among the fastest growing economies in the world.
Author: Volker Hirt (ARD)