Globalization in Vietnam

Nhu Phuong Vu

15 July 2017

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Contents:

Introduction: ................................................................................................................................................. 3

Definition: ..................................................................................................................................................... 3

Economic statistics:....................................................................................................................................... 3

Changes: ........................................................................................................................................................ 4

Job opportunities: ..................................................................................................................................... 4

Culture diversity: ....................................................................................................................................... 5
Poverty level: ............................................................................................................................................ 5
Literacy rate: ............................................................................................................................................. 6
Life expectancy, child mortality: ............................................................................................................... 6
Income inequality: .................................................................................................................................... 7
Interviews: .................................................................................................................................................... 7

Conclusion: .................................................................................................................................................. 10

References: ................................................................................................................................................. 11

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Introduction:
It is known that before 1980s period, Vietnam is considered as one of the poorest country in the
world. However, thanks to the tendency of globalization, Vietnam can receive the much more
advanced technology from foreign lands. These days Vietnams situation has got much better and
the S-shaped country is becoming a fully industrial one in 2020. Some people claimed that
globalization has brought many benefits and chances to Vietnam, even in the economy as well as
life standard or Vietnameses culture. In contrast, some asserted that globalization also harms to
the culture when there are more and more foreign countries come to Vietnam. That leads to people
easily lose their traditional values and begin being affected and integrate to the dominant nations.
Nevertheless, we cannot neglect that globalization has played a vital role in the latest success of
Vietnam and I will explain more in detail about the great influences that globalization has brought
to my land.

Definition:
Globalization is the process of interconnection and integration among different nations. That
movement could be economic, trade, financial and communication incorporation. (globalization,
n.d.). Consequently, that leads to the huge increase in trade as well as cultural interchange.
Moreover, globalization has also improved the production of merchandises and services. Besides,
the largest businesses are not the national firms any longer but they will be international
corporations which are subsidized by many countries. (What is globalisation?, n.d.)

Economic statistics:
One of the most famous globalization process in Vietnam is known as Doi Moi period. Thanks
to that Vietnamese economy has been steadily improved and integrated into worldwide market,
especially becoming the 150th member of WTO in 2007. It helped Vietnam change the position
from a poor country become a highly developing country.

According to Nguyen Phi Lan, Centre for Regulation and Market Analysis, University of South
Australia, Adelaide, SA 5001, Australia, Foreign Direct Investment (FDI) of Vietnam since 1988
have been considered as an extraordinarily impressive phenomenon of the economic shift from a

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centrally planned economy to a market oriented economy. Because of the implementation of the
policys alteration in 1986, annual FDI of Vietnam have increased dramatically from USD 0.32
billion in 1988 to nearly USD 4.0 billion in 2005, with an annual growth rate of 28 percent (GSO
2006). During this period, FDI has played a very vital role, even in supplying investment capital
as well as in motivating export activities, along with introducing new labor and management skills,
conveying technologies and creating job opportunities. (Nguyen, 2006). From 1986, the Doi Moi
reform policy started a new chapter in Vietnamese economic history with low inflation and high
economic growth. The acceptance of market-oriented institutions and an open-door policy opened
the Vietnamese economy to the international economy, which led to a strong economic retrieval
with a rapid economic growth, a considerable growth of both exports and imports, and very tough
inflows of FDI since 1990. (Nguyen, 2006)

In addition to high growth, the export amount has also illustrated a considerable number during
the reform period. For example, primary exports have expanded to other products such as coal,
coffee and marine products. Due to these supporting elements, Vietnam's export sector has also
extended into labor intensive manufactured goods where Vietnam has greater potential for gradual
growth of manufactured exports. It is seen a significant increase in the share of exports to Asian
markets, 51% and a drastic drop in the share of exports to European markets over a period of eight
years from 1985, from 60.3% to 13.7%. The imports sector also shows a similar pattern of growth
and expansion in trade, with its counterparts in Asia. (Chandrasiri & Silva, 1996)

Besides that, it is estimated by the Ministry of Planning and Investment that the economic growth
rate averaged nearly 7.0 per cent during the period of 1995-2004, and the Vietnamese GDP at
prices rose significantly from USD 8.0 billion in 1990 to USD 40.0 billion in 2004, then it was
around 50.0 billion USD in 2005. (Nguyen, 2006)

Changes:

Job opportunities:
According to Nguyen Hai Dong, Director of the Labor and Employment Department, Ministry of
Labor, Invalids and Social Affairs, thanks to globalized economy, there are more job opportunities
are created. Moreover, the market is extended, which attracts more foreign investments and it helps

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to enhance the economic development in 4 sectors: foreign-invested enterprises; export product
manufacturing and processing enterprises; highly developed sectors of the economy
(telecommunications, finance-banking, insurance, tourism, ) and small- and medium-sized
enterprises. These factors play a vital position in adjusting the labor force from agricultural to
industrial and service field. Consequently, it helps generate job opportunities for unskilled workers
to work in small processing industries and services. Furthermore, it also brings a chance for
Vietnamese workers to distribute to the international labor community. These factors help bring
labor export opportunities to the workers. Through the years, there are more and more Vietnamese
workers working oversea, mainly South Korea, Malaysia or Japan. Thanks to this activity, the
employees can increase their income and fulfil their ability to become a strong labor force for
Vietnam in the future. (Nguyen H. D., 2007)

Culture diversity:
Globalization has brought many positive alterations in Vietnamese culture which include the
changes in food, language, arts or lifestyle. Before 1954, the main dishes in most of Vietnamese
family are rice, boiled food or combination of the complicated material and spices. In every daily
meal as well as special occasions, all family members gathered together at home and enjoy the
food. In contrast, in the current life, Vietnamese are used to eating the fast food such as KFC,
McDonalds as well as are willing to go to foreign restaurants. Moreover, language is also
influenced by the social changes. Globalization created chances of international integration,
therefore, there are more and more the developments and penetrations of foreign languages in
Vietnam such as English, Japanese, Korean and so on. (Globalizations Effects On Vietnamese
Culture Cultural Studies Essay, n.d.). Besides, the gender equality has been improved as well, the
prevention females join in some professional fields is eliminated, the legislation relating to heath
care, safety of women is enhanced. (T, 2016)

Poverty level:
Thanks to the suitable timing for the application of globalization in Vietnam, the living standards
of the inhabitants of my country have significantly improved since then. Not surprisingly, from
what I have mentioned above, the most notable transformation aspect belongs to the financial state

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of citizens. Just like what my interviewee mentioned, before 1990s, before and after few years of
Doi Moi process, the problem of finance was Vietnamese peoples biggest threat in daily life as
the majority of the population were unemployed and famine was everywhere, from the North to
the South. This was also reflected through the numbers. As in 1992, the poverty rate in Vietnam
reached its record peak at 77.09 per cent, the highest in the whole countrys thousand-year history.
Nevertheless, after the globalization was applied and efficiently worked, the poverty ratio greatly
reduced to only 13.86 per cent as of 2012, a drop of about 82% during the 20-year period. The
most significant is the statistics in 2008 and 2010, the rate decreased the most during the 20-year
period with a drop of 60.4%, from 45.61 per cent in the former year to only 18.05 per cent in the
later year. (Vietnam - Poverty headcount ratio, n.d.)

Literacy rate:
Moreover, not only globalization has had the impacts on the financial aspect of the citizens, it has
also affected their education and health sides. Education is always important, especially for any
countries to get rid of poverty. Also using indexmundi statistics, it can be summed up that during
the period of 1979-2009, the literacy rate of the youth (15-24 years old) and adults (over 15 years
old) has become much better, as in 1979, the values were 95.03 and 83.83%, respectively, while
in 2009, most of inhabitants can read now, with 97.09 %for only the youth and 93.52% for the
whole population (Vietnam - Literacy rate, n.d.).

Life expectancy, child mortality:

In 1970s, most of Vietnamese people could only exist on the Earth until around 60 years, but this
has changed in the modern era now, as of 2012, Vietnameses life expectancy increased by 16
years, which means the people now can survive averagely in 76 years. What is more, the child
mortality also got better stats, as recorded in 1990, around 51% of children could only live in their
first 5 years, but this rate was only a half now, with around 23% of children died before their 5 th
birthday. In order to explain this, we can say that with the globalization, Vietnamese families now
can access to the more advanced medicines and treatments, which results in a better and healthier
life. (Statistics, n.d.)

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Income inequality:
However, globalization also has the back side of its own, as the more how globalized Vietnam is,
the bigger gap between the rich and the poor is. According to Oxfam Vietnam in 2014, the richest
Vietnamese can earn 5000 times more money in an hour than the poorest one could spend during
a day, and on the daily basis, those rich guys can earn in a day more than the poorest Vietnamese
earn in 10 years. This income inequality can result in many drawbacks for the poor, most notable
one is the unequal access to the health service. For instance, pregnant women from poor
households are three times more likely to go without antenatal care compared to other pregnant
women. In order to minimize this problem, Mrs Ngo Truong Thi, chief of the National Co-
ordination Office for Poverty Reduction, said that the Nation Assembly should focus more on
reducing poverty in mountainous areas, effectively use the fund for poverty reduction and give
more rights for localities to run programs related to poverty reduction. Finally, Mr Nguyen Hoang
Mai, vice chairman of the National Assemblys Committee on Social Affairs, also mentioned that
cutting State budget allocations to big cities, such as Ho Chi Minh City and pouring more for
underprivileged localities is another solution. (Inequality on the rise in Vit Nam, 2017)

Interviews:
Interview with Aaron Minh Nguyen, summer 2017

Interviewer: How did the globalization affect your personal life?

Aaron Minh Nguyen: My dad, my mom and even me, at the early 20s at that time, had to do a lot
of no-named and hard jobs to survive. Nevertheless, from the late 1980s, Vietnamese government
decided to open the door to the advanced world, and since that day, globalization officially emitted
Vietnam. After that, our family life got better. I luckily got a place in a well-paid project from
foreign investors, and then thanks to that experience, I received a good job in a foreign company
in Saigon. Now, although my family is not a rich one, at least thanks to the globalization, I and
my parents could survive through the most difficult days in my life, through the famine in which
we couldnt know if we can have even a single meal in three or four days and now I have a beautiful
family and a good job to earn our livings.

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Interviewer: How do you think globalization affected the country as a whole?

Aaron Minh Nguyen: After the globalization, VN received a lot of money through FDI from
developed countries and foreign projects that were invested in VN. More and more Vietnamese
got jobs thanks to the increase in the labor demand. The unemployment rate reduced quickly and
the famine all around the country significantly dropped. Most important thing is the import of the
advanced technology from developed countries. Vietnamese people also have chances to approach
more advanced products and wonderful services from abroad. However, everything has 2 sides.
Currently, with the increase in GDP per capita, Vietnamese people now prefer can afford the goods
and services from those foreign countries, which invisibly reduced the productivity from those
Vietnamese firms in the same areas. Vietnam gets FDI through many big developing countries, so
sometimes Vietnam should follow some of those countries policies, which contributes to many
political problems. The globalization also makes the gap between the rich and the poor bigger and
bigger, both amongst the countries and amongst the people from the same countries. Lastly, some
Vietnamese firms cannot compete with foreign companies, they need to reduce the costs, which
leads to the fact that many people got unemployed, and can lead to many social problems and so
on ...

Interview with Shahid Naseem, summer 2017

Interviewer: How did the globalization affect your personal life?

Shahid Naseem: Globalization is consciousness of the world around us. So, anything that happens
in the world depending on where should have some effects on us. It is about increased in social
networking, the consciousness causes a mingling of cultures, and learning about new people. The
goods brought through globalization, and free market trade become cheaper to the consumer,
which everyone in the world is one way or another. The clothes I wear, the food I eat, the car I
drive, technology I use everything is in the result of globalization.

Interviewer: How do you think globalization affected the country as a whole?

Shahid Naseem: As globalization involves enterprises and workers of nearly all the world's
countries in the goods as well as in the service sector. Consequently, the majority of the world's

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labor force is experiencing the effects of international competition. There is need for a coordinated
and collaborative effort among the South Asian countries to expand trade in the region. Pakistan
needs to diversify its exports base and shift from primary agricultural products to more value added
and industrial products. Privatization have placed at the top of the Government agenda. Pakistan
should increase exports not only to earn more foreign exchange but also to join the world
community in globalization. Similarly, direct foreign investment is crucial for resource
mobilization.

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Conclusion:
Everything has its own benefits and drawbacks, so does globalization. Vietnam got a chance to
escape from the poverty to become a developing country like nowadays. Besides, it also creates
more jobs opportunities as well as better healthcare conditions for the citizen and it improves also
some other aspects such as literacy, life standard, child mortality and so on. Nonetheless,
globalization simultaneously generates the income inequality which leads to the distance between
the poor and the rich in social life. All in all, in my opinion globalization helps my country a lot in
integrating to the international environment, communicating with foreign countries around the
world. Thanks to that Vietnam has more chances to learn from neighbors and become a highly
developing country

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References:
Chandrasiri, S., & Silva, A. d. (1996, 6). Globalization, Employment and Equity: The Vietnam Experience.
Retrieved from www.ilo.org: http:///public/english//region/asro/bangkok/paper/glo_viet.htm

globalization. (n.d.). Retrieved from www.businessdictionary.com:

http://www.businessdictionary.com/definition/globalization.html

Globalizations Effects On Vietnamese Culture Cultural Studies Essay. (n.d.). Retrieved from
www.uniassignment.com: https://www.uniassignment.com/essay-samples/cultural-
studies/globalizations-effects-on-vietnamese-culture-cultural-studies-essay.php

Inequality on the rise in Vit Nam. (2017, 1 13). Retrieved from vietnamnews.vn:
http://vietnamnews.vn/society/349627/inequality-on-the-rise-in-viet-
nam.html#0mCzhvgk2GIaskJs.97

Nguyen, H. D. (2007, 12 25). Opportunities for workers in a globalized economy. Retrieved from
vietnamlawmagazine.vn: http://vietnamlawmagazine.vn/opportunities-for-workers-in-a-
globalized-economy-3537.html

Nguyen, P. L. (2006, 11). FOREIGN DIRECT INVESTMENT AND ITS LINKAGE TO ECONOMIC. Retrieved from
editorialexpress.com: https://editorialexpress.com/cgi-
bin/conference/download.cgi?db_name=ESAM07&paper_id=24

Statistics. (n.d.). Retrieved from www.unicef.org:

https://www.unicef.org/infobycountry/vietnam_statistics.html

T, S. (2016, 4 25). Economic Globalization. Retrieved from vietnam-globalization.blogspot.de:

http://vietnam-globalization.blogspot.de/

Vietnam - Literacy rate. (n.d.). Retrieved from www.indexmundi.com:

https://www.indexmundi.com/facts/vietnam/literacy-rate

Vietnam - Poverty headcount ratio. (n.d.). Retrieved from www.indexmundi.com:

https://www.indexmundi.com/facts/vietnam/poverty-headcount-ratio

What is globalisation? (n.d.). Retrieved from www.bbc.co.uk:

http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev1.shtml

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