Will Vietnam SURPASS Philippines, Singapore and Malaysia by 2023?

Once among the smaller economies in ASEAN, Vietnam has made great strides towards economic modernization, emerging as a manufacturing powerhouse and a promising hub for services industries.
In the past 3 decades, Vietnam’s economic growth is considered phenomenal. From $6.4 billion in Gross Domestic Product in 1990 to $362.6 billion in 2021, expanding 56 times, an exceptional growth from any country in the world outpacing the growth recorded by other major economies in the region.
Where Indonesia grew by 11 times from 106.4 billion to $1.1 Trillion, Singapore expanded almost 11 times from a GDP of 36 billion to $396.9 Billion, Malaysia grew 8 times from 44 billion to $372 billion, while the Philippines expanded 7.8 times from 50.5 billion to $394 billion, and Thailand grew 5.9 times from 85 billion to $505.9 billion.
Extracting the Nominal gross domestic product from the World Bank official figures, in the past 30 years, it seems that the GDP ranking of Vietnam remains unchanged at the 6 spots. However, the big difference from the last 3 decades is its nominal value which is currently much closer to the nominal GDPs of Malaysia, The Philippines, and Singapore.
Regardless of whether Vietnam’s economy will surpass other major economies of Malaysia, Singapore, and the Philippines earlier by 2025 or later, it is undeniable that Vietnam’s economic success is remarkable.
It started when South Vietnam was unified with North Vietnam, from a highly centralized command economy to a mixed economy coupled with beneficial global trends, that have helped propel Vietnam from being one of the world’s poorest nations to a middle-income economy and is expected to take part in the league of the advanced economy by 2045.
This accelerated economic pace is due to labor shifting from agriculture to manufacturing and services. Considering, that Vietnam, has been a major beneficiary of the supply chain relocation and diversification trend out of China, with several new trade agreements from the United Kingdom and European Union aside from the United States its biggest export partner, it is expected that the large scope for growth in Vietnamese exports will continue.
To sustain longer-term growth, a handful of structural changes could also be considered. Three enablers are essential, education, workforce productivity, and infrastructure.
Investment in education could raise skill levels in the workforce as part of initiatives to increase productivity, which lags behind that of Vietnam’s regional peers, and has plateaued despite positive economic growth and ongoing competitiveness in labor costs.
A higher-skilled workforce could attract manufacturers exploring Industry 4.0 technologies, and help to move the country up the value chain into more productive and higher-earning areas.
As for infrastructure, investments to redevelop its infrastructure should be scaled up. Ports are running at overcapacity. Ho Chi Minh City and Hanoi need significant investments in roads, rails, and airports, and this underdeveloped infrastructure represents a potential hurdle for growth.
Beyond manufacturing and tourism, the country could focus on boosting the competitiveness of other strategic areas at home-including state-owned enterprises, small and medium-sized enterprises, and start-ups-to increase national resilience.
Join this channel to get access to perks:
/ @aseananalytics