By: Prof Enrique Soriano
I AM in Istanbul, Turkey now but I decided to write about Vietnam and its first billionaire. I really love Vietnam, a resilient country full of history and culture! It is also in Hanoi where I started my very first overseas consulting work more than a decade and a half ago. Vietnam is the country of Cameron Mackintosh’s world famous theatrical show, Ms. Saigon! But for this 2 part article, my focus will be on the country’s economic history and Pham Nhat Vuong, a 50 year old majority owner of Vingroup and the country’s first newly minted dollar billionaire.
Vietnam’s Meteoric Rise
Vietnam, officially the Socialist Republic of Vietnam, is the easternmost country on the Indochina Peninsula in Southeast Asia. With an estimated 96.54 million inhabitants as of 2018, it is the world’s 13th-most-populous country, and the eighth-most-populous Asian country. According to research information culled from various sources, the name Vietnam translates as “Southern Viet” (synonymous with the much older term Nam Viet); it was first officially adopted in 1802 by Emperor Gia Long, and was adopted again in 1945 with the founding of the Democratic Republic of Vietnam under Ho Chi Minh. The country is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea to the east. Its capital city has been Hanoi since the reunification of North and South Vietnam in 1976.
In 1986, the government initiated a series of economic and political reforms which began Vietnam’s path towards integration into the world economy. By 2000, it had established diplomatic relations with all nations. Since 2000, Vietnam’s economic growth rate has been among the highest in the world and, in 2011, it had the highest Global Growth Generators Index among 11 major economies. Its successful economic reforms resulted in its joining the World Trade Organization in 2007.
Vietnam is a development success story. Political and economic reforms (Doi Moi) launched in 1986 have transformed Vietnam from one of the poorest countries in the world, with per capita income below $100, to a lower middle income country within a quarter of a century with per capita income of over $2,343 by the end of 2017. To date, Viet Nam has achieved most and in some cases surpassed a number of the Millennium Development Goals (MDGs), particularly with the goals on poverty reduction, education and gender equality. Over the last few decades, Vietnam has made remarkable progress in reducing poverty.
The percentage of people living in poverty dropped from almost 60% in the 1990s to less than 3% today. Vietnam’s growth rate has averaged 6.4% per year for the last decade, but it has begun to slow recently. In 2014, GDP growth was 6 %, projected to flatten in 2015 and start to pick up in 2016. Vietnam has managed to improve macroeconomic stability, with headline inflation falling from a peak of 23% in August 2011 to about 4.1% for 2014.
Vietnam’s First Billionaire
Pham Nhat Vuong ranks high on the Forbes list, with his US$7.5 billion assets based largely on his significant stake he owns in Vingroup, a real estate development firm. His story is different from the tragic tale of romance between an abandoned Vietnamese bar girl and her American lover. Vuong’s story has something to do with ramen noodles, a tremendously popular quick meal in many parts of the world.
To be continued…
Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School in Jakarta.
He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker, book author and have written more than 200 articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com