When you look at Vietnam today, over 30 years after the ravages of the Vietnam War, it has evolved from what was once a failed economy into a market economy, continually creating opportunities by engaging in international business. Since the demise of the Communist Bloc in the late 1980's, significant economic reforms have been implemented for the purpose of renovating the Vietnamese economy, which had failed due to corrupt and inefficient government programs.
As a result of this, Vietnam has now been experiencing an average GDP growth of 8% annually since the turn of the century. Additionally, industrial production has been expanding, growing at an annual rate of between 14% and 15%. So, taking the industrial sector into consideration, what is the outlook for the expansion in the agricultural export markets? Vietnam is currently ASEAN's (the Association of South East Asian Nations) fastest growing economy and is second only to China where economic expansion into international markets is concerned.
Compared to the industrial growth factor above, the average individual would see the agricultural growth factor as being insignificant. However, this is a misconception when you consider that (up until the late 1980's), Vietnam's economy was agriculturally based in wet rice cultivation and exportation. Slightly over a decade ago, 70% of Vietnam's population resided in rural areas while 80% of the workforce was employed in either agricultural business or some food-related industry.
Naturally, these statistics are no longer valid when you consider thd fact that cities such as Danang, Hanoi, and Ho Chi Minh City have experienced exponential population growth since the end of the war. Current market studies are indicating that, in addition to rice, the top 5 industries worth considering for investment and export are as follows:
o Agricultural Processing o Coffee o Dairy Production o Livestock o Seafood
The Vietnamese agricultural sector is targeting $ 15 billion (USD) in exports by 2010 with a targeted annual growth factor of 4-4.5%. Additionally, specific areas such as coffee and seafood exportation are primed for explosive growth due to a couple of different factors:
o In 2007, the European Commission (EC) recognized 25 Vietnamese seafood companies as meeting safety and sanitation requirements for exporting products to the European Union (EU). These companies have been exporting to the EU since January 31, 2008.
o According to the International Coffee Organization (ICO), the output of Brazilian coffee only reached 33.1 million bags for the 2007-08 seasons, a decline of 22% from the previous year. The decline in coffee production among countries in the southern hemisphere makes Vietnam the northern hemisphere's largest coffee producer.