Vietnam is rapidly shaping a new world order. Even a decade ago, few would have guessed that Vietnam would become the most globalized populous country in modern history. According to the World Bank, in 2017, Vietnam’s trade as a percentage of GDP reached 200 percent, the highest percentage among the world’s twenty most populous countries. Thailand at number two was not even close at 122 percent (see figure 1).
The World Bank has keep recording this metric of globalization since 1960. It is calculated by adding the value of exports and imports then dividing the figure by GDP. Population is a key qualifier of this metric. Small nations such as Singapore, Hong Kong, and Luxembourg actually have globalization rates over 300 percent. But that’s because companies in these small countries make products primarily for export because their domestic markets are just too small to consume all of their output. As the 14th-most populous country in the world (see figurine 2), Vietnam is an outlier.
No More Business as Usual
For many centuries, European countries and more recently their North American cousins dominated global trade, often colonizing many of the countries they operated in. They gave birth to the multinational companies and a new age of economic imperialism through corporate globalization.
That is now changing. Economies like Vietnam’s are growing rapidly and so is the wealth of their nations’ citizens. Vietnam’s exceptionally globalized economy is a result of its focus on exports for economic growth. With its large, industrious and well-educated workforce, Vietnam has opened up its labor market to foreign investors and become a hub for low-cost manufacturing. The country is now a major exporter of electronics and apparel.
Globalization has been positive for most Vietnamese. The country’s GDP per person has grown over 27 times in the last 30 years to about $2,600 in 20018. The Vietnamese people have noticed the benefits of globalization. In a recent Pew Research Survey, 95 percent of Vietnamese people reported that “trade is good.” That’s because, compared to other emerging nations, that growing prosperity has been more equitably shared. The proportion of people in extreme poverty decreased from above 70 percent in the early 1990s to around 10 percent in 2016.
Fueling this economic engine is Vietnam’s GDP, which has grown at 6.8 percent a year on average for the last 20 years. The economy has grown 39 fold in the same period to $245 billion last year. Growth in 2018 last year was 7.08 percent, the highest in a decade.Top of Form
I learned all this first-hand when I spent time in Vietnam researching by Phuong Uyen Tran, Jackie Horne, and John Kador. It was published by Forbes Books. I believe it is the first business book by a Vietnamese female executive published in English in the U.S.
Welcoming the Benefits
The benefits of globalization are best realized when participants stay genuinely grounded in the local economies in which they operate. That means an economy that encourages healthy independence by local businesses and family-owned businesses. These businesses try to honor the needs and interests of all stakeholders at the same time as building long-term profitability.
Economies are healthier and more sustainable if they are supported by local businesses which have a tangible stake in the success of local communities. When businesses work to ensure that the communities in which they operate share some of the benefits of their success, it creates a virtuous circle, which results in higher living standards and greater personal accountability.