Tourism plays a significant role in the economy of Vietnam
Ever since the advent of the industrial revolution, most economies have been heavily reliant on manufacturing for sustenance. Countries that can create their products have been leading the pack as they can also make money by exporting the manufactured products to other countries. Vietnam has emerged to almost an industrialized country, and despite its small size, it boasts of having the 47th largest economy in the world. Some of the biggest industries in Vietnam include the following.
Electronics
Never in the history of the world has the consumption of electronics been higher than it is now, a phenomenon that continues to rise every year. To meet this considerable demand Vietnam has invested in the manufacture of electronics which has seen that sector contribute 24% of the country’s GDP. Although the electronics industry is dominated by foreign giants like Samsung and Panasonic, the nation still reaps a lot of benefits since these multinational corporations have set up industries in Vietnam that employ the local people.
Food Processing Industry
Vietnam is a food processing hub that tries to meet the high demand for processed food from both local and international markets. The food industry is dominated by agricultural and sea products that are canned and shipped overseas, the sector accounts for 40% of Vietnam’s export and directly contributes 15% of the GDP. The abundance of raw materials has catapulted the country to the top of the charts in the export of rice, coffee, and cashew nuts among other food products.
Construction
Any growing economy is always besieged by the need to construct infrastructure that meets the demands of both the people and trade, an increase in foreign investment has led to a construction boom that has led to the building of high-rise apartments and office space especially in the urban centers like Ho Chi Minh City. The construction industry has directly contributed 39% of the GDP, and this is mainly due to the massive support from the government that has formulated laws that are favorable to the sector.
Mining Industry
Mining is a significant contributor to the economy with statistics showing that it directly adds 8.1% to the GDP. Vietnam is home to more than 5000 deposits of minerals that include rare metals that are in high demand around the world. The country has 7% of the world’s bauxite reserves as well as tungsten, titanium, phosphate, coal, and iron ore. As of 2015, Vietnam became the 3rd largest mineral producer in South East Asia with some projects in the pipeline to push it to the apex of the global mineral trade. One sector that has greatly benefited in the mining sector is the steel industry which is projected to grow further in the coming years with plans already in motion to set up a plant that will be rolling out 2 million tons of steel every year.
Services and Tourism
The service industry in Vietnam accounts for 38.2% of the country’s GDP. In the period between 1994 and 2004, the contribution to the GDP by the service sector averaged about 6%. Tourism plays a significant role in the economy of Vietnam and in 2012 the country received approximately 6.8 million visitors from different countries around the world. The number grew to more than 7 million in 2013. Vietnam has emerged as an attractive destination for tourists from different parts of the world, and according to the trip advisor, the top 25 destinations in Asia included major cities in Vietnam such as Halong, Hoian, and Ho Chi Minh City. In 2016, Vietnam attained a record of 10 million visitors from around the world, which represents a 26% increase from the previous year. Vietnam has now become the most favorable tourist destination in South East Asia. Many international and local tour operators in the country offer tours to ethnic minority groups, photography tours, bicycle, and walking tours, kayaking trips, and multi-country trips, especially with the neighboring countries of Laos, Cambodia, and Thailand. Tourists from foreign countries can travel freely in Vietnam as this was made possible by 1997. The country’s economy has transitioned from an agrarian-based to almost a modern service-based economy, and more than a third of the GDP is generated by the service sector which includes transportation and hotel and catering industry.
Banking and Finance
In Vietnam, the most reliable and efficient banks are the largest which are also owned by the state. Some of the leading banks in the country include BIDV, VietinBank, and Vietcombank which dominates the banking sector in the country. There is also foreign ownership in some of the banks in the country, for instance, VietinBank is partly owned by Tokyo-Mitsubishi UFJ of Japan, which owns 20% stake, while international finance corporation owns 10%. On the other hand, Vietcombank is owned by Mizuho which has a 15% stake. The stock exchanges trading centers in the country include Hanoi securities trading center, which runs Hanoi stock exchange (HNX) and Ho Chi Minh City securities trading center, which runs ho Chi Minh stock exchange (HOSE).
[content_block id=4039 slug=posts-footer]
