While territorial issues dominated media coverage of the recent ASEAN summit in Cambodia, most of the meetings centred on managing growth.
Next door in Vietnam, there are 90 million people – making it the 14th most populous country on earth. It is half the total area of Manitoba.
Since joining the WTO in 2007, Vietnam has been on a remarkable growth trajectory. In constant U.S. dollars, GDP per capita in 2000 was $723. Last year, it reached $3,400. In the past decade, Vietnam’s economy expanded at an average rate of 7.5 per cent. The IMF and Ernst & Young forecast the annual rate of growth over the next five years to remain a robust 7 per cent.
Nguyen Quang Dung, chairman of the Vietnam Development Bank, told me that Americans, Asians, and Europeans are investing and building here. Yet Canada’s total direct investment in Vietnam last year was $300-million – a pittance for a bustling $300-billion economy that attracted $19-billion in foreign direct investment in 2010. He and others would love to see Canadians in Vietnam. There’s a huge reservoir of respect for us here.
Senior Politburo member Madam Tong Thi Phong, deputy chair of the National Assembly and minister with overall responsibility for economic policy, told me that Vietnam is eager to welcome Canada with open arms. The country needs everything Canada is uniquely equipped to provide, including roads, bridges, rail lines, hospitals, schools, power generation, recycling, mining, re-forestation, water treatment and waste recovery. Vietnam also has 3.3 billion barrels of proven off shore oil reserves. They need partners to develop these resources. Telecommunications is something that Canadians know a thing or two about; Vietnam is the world’s second fasting growing market, after China. Canadian expertise in hydro electricity and transportation are also solely needed.
To its credit, Ottawa is doing everything it should to make it easier for Canadian firms to come here. Embassy staff is small but highly professional. The Export Development Corporation and Canadian Commercial Corporation are world-class trade finance companies backed by the full faith and credit of the Government of Canada. Inexplicably, getting Canadian firms to come here has been like pulling teeth.
No one said growing new markets is easy. It’s not. Patience is needed, and understanding the political, historical and cultural background takes time. So too does nurturing relationships for the long term. But for those that do, the rewards can be spectacular.
We have convinced ourselves that we are a “trading nation.” Yet 75 per cent of all the goods and services we produce go to the United States, our back yard. Canadians don’t even trade openly between provinces.
Over the past 10 years, Canada’s export performance has been second from dead last in the G20. On a global basis, our share of the world goods export market has fallen from about 4.5 per cent to 2.7 per cent. Only 9 per cent of our exports go to emerging-market economies.
In September, Bank of Canada Governor Mark Carney said: “We are overexposed to the United States and underexposed to faster-growing emerging markets.” He’s right. Canada’s over-reliance on the United States market makes us vulnerable. It also narrows our vision and breeds complacency.
In 1965, U.S. President Lyndon Johnson said that he was “going to bomb (the Vietnamese) back to the Stone Age.” He was true to his word. The “American War,” as the Vietnam War is called here, destroyed 95 per cent of the national infrastructure. The World Bank estimates that $170-billion will be needed over the next 10 years to build a modern infrastructure to sustain Vietnam’s current economic trajectory. Canadian businesses should be here to help.
Most people don’t understand that communist leader Ho Chi Minh was inspired by the revolutions in France and the United States (the two Western nations he successfully fought to create Vietnam). National independence and freedom from occupation and colonialism were the fundamental goals of this fiercely proud people. Today, political and business leaders here recognize that accelerated economic liberalization is key to their future.
For Canada, there lies the immensity of the opportunity. But as my friend, Nguyen Hoai Bac, a prominent business leader told me this week, “We really want Canadian companies to come. They can do very well. But we can’t wait forever.”