Vietnamese Deputy PM Trinh Dinh Dung and Dr. Frank Jürgen Richter, Chairman of  Horasis - Photo: VGP

This is the second time that the Horasis Meeting will be organized in Vietnam. What are the key messages and solutions to be given at the meeting?

The key message of the Horasis event in Vietnam is that the country is ready for business. It is willing to engage with entrepreneurs from all around the world, and across all industry sectors. As it has moved towards a market-oriented economy, Vietnam’s government has remained committed to reform and it is an economy that is primed for greater global interest, and investment.

How do you think foreign investors view Vietnam?

Vietnam has been viewed favorably as an investment destination by investors for a while now. Strong economic fundamentals coupled with strong government commitment to more open trade and investments have stood the country in good stead. And now with uncertainty stemming from the trade war between China and the US, many businesses are looking at other production locations in the wider Asia Pacific region, Vietnam looks set to benefit most greatly.

Vietnam is stuck in the middle of the US-China trade war. What are the advantages and challenges that Vietnam faces?

As explained above, the benefit for Vietnam is that trade will be diverted from China in its favor. As Chinese exports to the US become more expensive owing to the imposition of tariffs, US consumers will purchase goods from other markets, and Vietnam is one of the beneficiaries and is witnessing a surge in exports. The second advantage will potentially have longer term consequences as multinationals start looking at moving production outside China in order to mitigate the tariffs imposed on their exports to the US.

The trade war is not without its challenges, however. Owing to friction between the world’s two largest economies, global trade has been impacted adversely, and that has implications on all economies. Secondly, the trade war could potentially have an impact on Vietnamese exports of goods to China.

However, on a net basis, I think the benefits of the trade war for Vietnam outweigh the costs. In fact, the Asian Development Bank has estimated that Vietnam’s economy will gain by 2 percent of GDP over the next three years if there is a continued escalation in the US-China trade war.

Vietnam's economy in the past 30 years has been growing rapidly and is one of the best in the world. However, other economies have also been growing fast and strongly. Do you think that Vietnam has a chance to catch up with those economies?

Vietnam’s economy has grown at an average of about 7 percent per annum over the past three decades, among the quickest globally. I expect Vietnam’s economy will continue to be one of the world’s fastest growing in the coming years, backed by strong investments in infrastructure and the implementation of policies and frameworks conducive to greater investment in manufacturing. In doing so, I expect Vietnam’s economy to continue closing the gap on the more developed economies in Asia and elsewhere.

What are the areas that Vietnam needs to change?

The big challenge for Vietnam is how it ensures that its stupendous economic growth translates into a better quality of life for the poor. Growing income and social inequality can constrain growth and result in multiple challenges.

Second, its economic institutions need to be modernized and there is a need for ongoing reform to allow the private sector to prosper, particularly in terms of reducing red tape and bureaucracy.

Third, for Vietnam to successfully embrace Industry 4.0, it must invest greatly in education. Even as the country looks to move its manufacturing to the next level, its education system must keep up and produce the right kind of skills among the younger generation. Additionally, older workers need to have sufficient opportunities for reskilling as well. This is imperative for Vietnam to make the most of the shift to Industry 4.0.

How long do you think the US-China trade war will continue?

Again, I believe this trade war—or any trade war for that matter—is a zero-sum game. Both the US and Chinese economies will only lose out from the imposition of tariffs on one another’s products. In the medium to long run, I think both the US and China will see the futility of their actions. It is my hope this happens sooner rather than later!

While holding the position of Director of the World Economic Forum, you later separated and established the Horasis, why?

At the time, I saw a need for dialogue, particularly between emerging and established markets. The need for dialogue continues even today, and Horasis was set up as a medium to encourage and facilitate discussion and collaboration between entrepreneurs, businesses and governments from different parts of the world. 

Lan Anh

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