Economic Insight. viet-imports.com
 
 

GLC’s ECONOMIC INSIGHT

Vietnam’s New Economy

Vietnam's economy is growing at a fast pace and warrants investor attention. The Bilateral Trade Agreement (BTA) with the United States is now a done deal. Projections for the year 2002 and beyond are now quite positive. Now is indeed the time of opportunity for entering Vietnam.

GLC can advise and assist you to find profitable business ventures in a variety of markets. Our current expertise and contacts, alone with our historical knowledge of Vietnam’s transition from a Socialist society to a capitalist “White Tiger” will make your business investment decisions much easier.

Now is the time to enter this market in select areas. The economic recovery in neighboring lands slowed, but that has not stopped progress in Vietnam. Growth as measured by GDP in 2001 was 7% over 2000. Vietnam is well known as the safest place in Southeast Asia for foreign investors, businessmen, and tourist to be. In the current world of governmental instability and international turmoil, Vietnam is truly a safe haven.

Efforts at curbing bureaucracy and corruption are increasing. As in any developing third world nation, corruption is still a fact of life in the business arena, however, with the right guidance and insight, it is manageable and can be avoided. GLC has that insight and can guide you through this quagmire. The Vietnamese government recognizes the need for greater investment and is doing their part to facilitate investor needs and shield investors from corruption. The Ninth Party Congress held in the late spring of 2001 carved out even more progressive changes in local practices and procedures of doing business more efficiently and effectively. Thus far Vietnam has depended on its Asian neighbors such as Taiwan, Singapore, China, and Japan to spur their country’s development, but now they are looking to North America and Europe for continuing that growth.

The high tariff barriers and dual price system are falling. The 1998 waiver of the Jackson-Vainik Amendment to the Foreign Trade Laws has been confirmed by the Congress. All this enables American businesses to work in Vietnam on a more level field.

There is now a multitude of business venture financing options available to the US business desiring to enter Vietnam’s markets. The United States-Asia Environmental Partnership (US-AEP) initiated the Overseas Program Fund in 1994. It is administered through the National Association of State Development Agencies (NASDA) and provides grants of up to $25,000 to help U.S. companies enter the Asian environmental market. The US-AEP also launched the Environmental Technology Fund in 1992. The Tech Fund provides grants of up to $20,000 to help U.S. companies transfer technology into the Asian environmental market. The Trade and Development Agency (TDA) underwrites full feasibility studies with grants up to $250,000 provided a US company is hired to undertake the work. The Overseas Private Investment Corporation (OPIC) provides project loans up to $200 million and insurance against the risk of claims to Sovereign Immunity (government takeovers). America's Export-Import Bank provides low-cost loans and loan guarantees for US manufactured goods exported to Vietnam. The BTA has been approved and its full force and effect will be felt in 2002. For almost limitless financing potential, the World Bank Groups International Finance Corporation (IFC) offers a variety of financial instruments to large private sector projects in developing countries. In order to be eligible for IFC funding, the project must: be in a member country (Vietnam is an IFC member), be in the private sector, be technically sound, have good prospects of being profitable, benefit the local economy, and be environmentally and socially sound. A company or entrepreneur seeking to establish a new venture or expand an existing enterprise can approach IFC directly by submitting an investment proposal.

The earlier rush to riches matured, experienced a downturn, and became the current, more conservative pace. The current regional financial turmoil is having an indirect effect of slowing investment growth. However, this situation is viewed by most as an opportunity to enter at a favorable level.

Vietnam still has very favorable labor conditions with an abundance of literate, educated, industrious, trainable, loyal workers at favorable labor rates and a stable government. All of this makes Vietnam an excellent location for manufacturing. The population of approximately 80 million is very young, with over half of Vietnam’s citizens born after 1975, the year the war ended. Education is a top priority in Vietnam and the government has invested well in a more technical and advanced school system for its young population. In spite of this well educated work force, labor costs are still very low with average monthly compensation for unskilled labor at a range of $40 (for rural) to $55 (for urban) workers. Young college degreed workers typically receive monthly wages in the $125 to $200 range depending on discipline. Commercial real estate, supplies, and services are also quite reasonable, especially in the rural areas around the major cities making your overall operating costs extremely competitive on the world market.

GLC has senior market and trade Associates and government contacts throughout Vietnam, and a keen understanding of market outlook. Most of our Associates in Vietnam are American citizens with extensive US business experience. They now live and work in Vietnam full time. GLC’s Managing Director lived in Vietnam for the past 3 years and worked directly with the country’s Ministries and senior officials. He now lives in the US but travels to Vietnam frequently. Our US Associates reside in key business regions throughout the US. Additionally, GLC has entered into a long-term corporate partnership with the Boston International Trade Group (BTG). BTG with their extensive contacts in the US government and their large network of US import buyers, giving us a powerful ally in marketing Vietnamese products and services in the US. The GLC team possesses in-depth knowledge of successful American and Vietnamese business practices from actual experience at executive management levels. We are fully committed to alliance building, trade facilitation, and investment acquisition between the US and Vietnam. For the Vietnamese business, GLC is the one-stop shop for business consulting services, investor introduction and negotiation support, locating and identifying business partners, corporate alliance building, US technology transfer, posturing to enter the US market, marketing and sales in the US, and e-commerce. For the US business, we are the one-stop shop for business tours and introductions to Vietnamese markets, Vietnam travel arrangements, cultural consulting and translation, business practice consulting, lobbying Vietnamese government officials, business start up in Vietnam, in-country logistical support, coordination and management of local resources, corporate alliance building, investment analysis, product and service sourcing, trade facilitation and negotiations, marketing and distribution of US exports, and outsourced IT services.

How We Work for You

GLC is a results oriented service provider. We strongly believe that if our services do not help you achieve your goals, then we have failed and are not worthy of profitable compensation. However, we are extremely confident in our abilities to assist our clients and to assure accomplishment of reasonable goals and objectives. Therefore, we work for you in a somewhat risk free basis.

When you employ GLC’s expert business Associates for consulting services, management augmentation, or logistical support, you will pay no upfront fees or retainers. We will first meet with you to discuss your needs and objectives. From this initial meeting, we will determine whether your objectives are achievable and whether we can confidently assist you. Upon mutual agreement of the scope of services and business objective, we will charge you a very reasonable consulting rate payable weekly with 25 percent retained by you until project completion. If your objectives are not met, then the retainer is yours.

When you employ GLC to assist you with investment acquisition or product marketing and sales, you will pay no upfront fees or retainers. We will meet to discuss your business needs and goals, and we will come to mutual agreement as to reasonable goals and milestones for your business venture. We will also come to agreement on our compensation which will be fully tied to and payable with achieved milestones. Again, if we don’t help you succeed, we don’t get paid. It’s a simple and logical concept that many companies are afraid to embrace because of historical poor performance.

A third way of working for you is to work with you. GLC is prepared to enter into business venture partnering deals in which we will share in the investment to launch the venture and then share in the ventures profit. These partnering deals will particularly be considered for product exporters wishing to penetrate the US and Vietnamese markets. On a case-by-case basis, GLC would conceptually share in the expense to ship and introduce products into the other country’s market prior to acquiring buyers. In most cases, with proper market and competitor analysis, this approach will result in favorable results and expedite the market penetration process.

We look forward to serving your business needs and to our mutual business success. For further information on how we can make your US - Vietnam venture a success, Contact Us

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INTRODUCTION

ø Introduction to GLC
ø Letter to Vietnamese Business
ø Economic Insight
ø Vietnam's Economic Development