Vietnam -- Opportunities to invest and travel

October 18, 2006

A number of recent developments show that Vietnam is creating opportunities to invest...and travel.

• The Asian Pacific Economic Coorperation (APEC) Tourism Ministerial Meeting was chaired by Vietnam on Monday. The 21 members agreed to liberalize air routes, increase business investment in and promotion of tourism between the countries that border the Pacific Ocean.

• In June, the U.S. Senate approved Permanent Normal Trade Relations (PNTR) with Vietnam. If approved by Congress and the President, PNTR will open the door for Vietnam to join the World Trade Organization (WTO) by the end of this year.

• The U.S. Trade Representative’s Office reported on the success Vietnam has made in implementing the Bilateral Trade Agreement (BTA) with the U.S. Over the last five years the U.S. has helped the Vietnames draft over 70 laws to protect trade and foreign investment. As a result, trade has grown over 400% to $8 billion, of which $6.5 billion is exports from Vietnam to the U.S.

What It Means:
Vietnam's 2005 GDP growth rate was 8.4%, making it one of the fastest growing Asian countries. Like China, they are a Communist country whose government strongly supports a market-based economy. Normalized trade status and admission to the WTO will increase both trade and investment opportunities.

Action Steps:
Vietnam’s growth will help all Southeast Asian mutual funds. However, the Vietnamese stock market is still fairly underdeveloped, so investment in specific Vietnamese companies or even country-specific mutual funds is too risky for now. Over the long haul, they are a country to watch...perhaps while vacationing there.

Source: APEC web site, U.S. Senate Web site, Office of the U.S. Trade Representative web site, CIA Fact Book web site