Bikini Billionaire is but One Vietnamese Success Story
Many people, with different backgrounds, work in an assortment of industries that drive Vietnam’s economic success. As major economies face slowing growth, Vietnam is an emerging global star with a $2 billion economy that continues to surpass market expectations. Second to India in growth this year, the South Asian nation is rapidly evolving from a nation of farmers to a modern, well-educated consumer society with the fastest growing middle class in the area. New found wealth that is transforming the capital city, reaches many who are delightedly buying goods and educating their children abroad in greater numbers.
Old Communist Party Overtaken by Young Consumers
Traditionally a conservative society, the country is seeking to finance its unprecedented changes by opening its state owned enterprises and real estate market to foreign investment. Given the centuries of struggle to maintain autonomy, with their territory coveted by other nations, this comes with some reluctance from the older communist authorities. In March, Vietnam’s new prime minister Nguyen Xuan Phuc took office. As his government eases barriers to outside investments, people are embracing consumer products they hadn’t previously been able to afford and the capital is being transformed with new Western shops, hotels and restaurants. In short, Hanoi is a hotspot for business opportunity.
Kim-Ly is an example of Vietnam’s majority: a youthful, dynamic, enterprising population. Like 30 million others—a third of the Vietnamese population, she’s embraced social media; loves shopping online and keeping up with her friends who are at uni in the US, Australia and the UK. She is working for Samsung (where half the company’s mobile phones are made) during her gap year before heading off to the University of South Hampton. Parents save to educate their children abroad, spending more than $1 billion in 2014, but like most attending universities, Kim-Ly is also contributing to the cost. Transferring large sums through a currency company directly to her UK bank account, she and her family are pleased that exchange rates are 31,856. Vietnamese dong (VND) to the pound. This means she might be able to indulge in a shopping spree in the UK. Kim-Ly will likely work in the city in the financial district after uni but is also dreaming of an online fashion start-up venture and knows plenty of people who are doing just that.
UK and US Leaders Visit Vietnam
Last year David Cameron was the first UK Prime Minister to visit Vietnam, seeking to increase the volume of UK exports to Vietnam which have been steadily increasing from £300 million in 2014. Trade and investment ties have been the cornerstone of the UK-VietnamStrategic Partnership Agreement. The UK is the EU’s third largest investor in Vietnam having invested nearly $3 billion already; investments in infrastructure will reach $7 billion by 2020.
The UK isn’t the only country interested in selling goods to Vietnamese consumers. President Obama recently came calling, keen to export to Vietnam’s middle class shoppers, whether his proposed Trans Pacific Partnership (TPP) passes legislation this year or not. TPP would give Vietnam the advantage over other partners, providing fuel for even greater growth, but Vietnam would have to increase unskilled worker’s wages which are the lowest in South Asia. That would help the many low earning workers, like the one seen earlier atop the skyscraper.
Race from Rural to Urban Society leaves Rice Farmers Behind
Drawn to the city for jobs, like many unskilled migrants from rural Vietnam, this construction worker earns the legal minimum wage for long days on building sites. He’d joked with his wife that he’d be a Vietnamese millionaire when he left their farm in the Mekong Valley where making 2.4 million Vietnamese dong (VND) a month was unheard of. Unfortunately, 1 million dong exchanges for only about £34. He’s earning about £90 a month after his wages- like all earning the minimum wage, were increased by 13pc last year. It allows him to send more money back home to pay for a new irrigation well, a necessity given the recent droughts. With a one bed flat costing 5,580,000 VND or £168.00, according to our calculator, he’s living rough in a tent village with other workers. He’ll be glad to conclude this temporary work and return to the peaceful countryside which he misses, he realises, when he sees the farmer with his water buffalo.
Like many in his remote village, his family couldn’t live on the £70 a month they make growing rice. Farmers earn the lowest incomes across the nation which is why so many flock to the city for jobs, or emigrate elsewhere as there aren’t enough high paying jobs for unskilled labourers. With an eye towards a better future for her family, his sister accepted a marriage broker’s offer to post her photo online. She was soon wed to a Taiwanese businessman, joining 80,000 other Vietnamese wives living comfortably in Taiwan. Like the labourers and others working abroad, her remittance has a large impact on the country’s economy. There are 4.2 million Vietnamese overseas who transferred more than $12 billion of remittance home in 2014, worth more than half of foreign investment in Vietnam.
Few people exemplify the success of Vietnam’s Doi Moi, the renovation program of the last 30 years, better than accomplished entrepreneur Nguyen Thi Phuong Thao. The petite, pretty owner of VietJet Air recently made the shrewd business decision to employ stunning stewardesses clad in bikinis to staff her airlines as she promoted her first stock offerings. Going public boosted Mrs. Thao’s fortune to $1.37 billion and she’d made her first million when she was just 21. With a doctorate in economic management and a pair of degrees in labor economics and financial credit, her flamboyant decisions have been well considered. The airline doesn’t actually have staff dress in bikinis, red fishnet stockings and stilettos-this was a promotional stunt, though they do sell very popular calendars! Female entrepreneurs now own a quarter of all enterprises in Vietnam.
There are over 195 super-wealthy Vietnamese businesspeople at the top 11pc of earners in the nation of 90 million people. Their new mansions and flashy car collections dazzle many who also enjoy their new found purchasing power. According to research by Pew, 95% of Vietnamese polled agreed with the statement: “Most people are better off in a free market economy, even though some people are rich and some are poor.” The modern young middle class rises rapidly as the country enthusiastically embraces capitalism. Those still labouring with water buffalos lag behind, and are coming to work in the cities, too. Exchanging their peaceful villages for low paying toil, their children will benefit from the schools that aren’t presently seen in rural Vietnam as they, too, rise from poverty into Vietnam’s expanding middle class.