Vietnam's Economic Competitiveness Surges According to World Economic Forum
Vietnam's Rising Economic Competitiveness
With efforts to boost economic reforms and seize opportunities afforded by Industry 4.0, Vietnam is climbing the World Economic Forum’s (WEF) rankings. The WEF recently released its Global Competitiveness Index (GCI) 4.0, showing Vietnam’s economic competitiveness has once again improved.
Vietnam's Rank in Global Competitiveness
Vietnam is ranked 77th out of 140 economies, with a score of 58.1 on the GCI 4.0. This new composite indicator assesses national competitiveness through institutions, policies, and factors that determine productivity. Vietnam has improved in various indexes, scoring higher in ICT adoption (43.3 points), macroeconomic stability (75 points), health (81 points), labor market (55.6 points), and market size (70.9 points). In 2017, Vietnam ranked 74th out of 135 economies with a score of 57.9.
Historical Rankings
In the WEF’s Global Competitiveness Report (GCR) 2016-2017, Vietnam ranked 60th out of 138 countries. The previous year, it was 56th out of 140 countries. At the recent WEF on ASEAN 2018 in Hanoi, WEF founder and executive chairman Klaus Schwab highlighted Vietnam's improving economic competitiveness, making it a magnet for foreign direct investment (FDI).
Foreign Investment and Manufacturing Hub
Vietnam's strong economic growth of 6-7% rivals China, and its exports match its GDP value. The country has become a hub for foreign investment and manufacturing in Southeast Asia. Major companies like Samsung, LG, Olympus, and Pioneer have set up operations in Vietnam. As of September 20, Vietnam had 26,646 valid foreign-invested projects, registered at over $334 billion, with $13.25 billion in disbursed FDI in the first nine months of this year, up 6% year-on-year.
Factors Behind Economic Growth
Analysts from the World Bank and Brookings attribute Vietnam's economic rise to three main factors: embracing trade liberalization, implementing domestic reforms to lower the cost of doing business, and investing heavily in human and physical capital through public investments. Since 2010, Vietnam’s GDP growth has been at least 5% annually, peaking at 6.8% in 2017, and is expected to reach 6.9% this year. This growth has transformed Vietnam from one of the poorest countries to a comfortable middle-income nation, with GDP per capita rising from $230 in 1985 to $2,343 in 2017 (over $6,000 when adjusted for purchasing power).
Improved International Rankings
Vietnam's efforts are reflected in international rankings. In the World Bank’s Ease of Doing Business rankings, Vietnam improved from 104th place in 2007 to 68th place in 2017. The country made progress in enforcing contracts, increasing access to credit and electricity, paying taxes, and trading across borders. Despite these advancements, Vietnam’s GDP currently accounts for only 0.51% of the world’s total GDP.
