Vietnam is one of the fastest growing economies in Asia. It weathered the 2008 global financial crisis quite well with signs of recovery observed in 2009. Vietnam’s membership in the ASEAN Free Trade Area (“AFTA”) in 1995 and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 led to rapid changes in Vietnam’s trade and economic regime. US-Vietnam bilateral trade has grown from about USD220 million in 1994 to USD46.43 billion in the first seven months of 2020, transforming Vietnam into the second-largest source for US imports and 26th-largest destination for US exports. Vietnam is the second-largest source of US clothing imports, and a major source for electrical machinery, footwear, and furniture. In recent years, Vietnam has become a leading agricultural exporter and served as one of the most attractive destinations for foreign investment in Asia. Manufacturing, information technology and high-tech industries constitute a fast growing part of the economy. Vietnam is also one of the largest oil producers in the region.
Agriculture represents 14.7% of GDP and employs 39.4% of the total workforce. The main crops harvested in Vietnam include rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea as well as aquaculture. Agricultural trade surpluses slightly increased in 2019, but the livestock industry continued to suffer from various diseases, including swine flu.
Industry represents 34.2% of GDP and employs 25.8% of the total workforce. The energy sector has boomed in recent years (coal, hydrocarbons, electricity, cement, steel industry). Despite being a 'newcomer' in the oil industry, Vietnam has become the third largest Southeast Asian producer. Recent deals for LNG facilities with United States providers signal increased investment in the energy sector and an effort to balance unequal trade accounts. Vietnam has also invested in high value-added industries such as cars, electronics and computer technologies (software). Manufacturing rose by 10.9% year-on-year in 2019, contributing a record industrial trade surplus of over USD10 billion.
Services represent 45.5% of GDP and employs 34.7% of the total workforce. The main services include tourism, which as mentioned earlier took a hit because of Covid-19, and telecommunications. Double-digit growth is expected from the Vietnamese retail sector from 2019 to 2024.
Vietnam’s labour force is one of its competitive advantages and accounts for an important part of Vietnam’s future economic growth. Vietnam is famous for its young, hardworking, highly literate and easy-to-train labour force. Vietnam’s labour force, or the economically active population, was 57.79 million people in 2020. The labour force of the statutory working age was 53.1 million people in 2020.
Vietnam has membership in several multilateral economic agreements, and has signed a number of free trade agreements, including agreements with the Eurasian Economic Union, the European Union, and South Korea. Additional important agreements include the CPTPP, the RCEP and, most recently, the UK/Vietnam FTA.
