Growth engines running at full speed

Presentation platforms for modern technology as well as for international consumer goods are needed in Vietnam. Having long since recovered from the financial crisis in the 1990s, the country is honing up its business success.

For some people the name Vietnam still immediately conjures up images of war, suffering and the deprivations of the civilian population as well as the struggle between different political systems. But although comprehensively cemented in European minds for many years, this picture no longer does justice to Vietnam as it is today.
52 % of the roughly 80 million inhabitants are younger than 24, did not live through the war, are performance-minded, eager to learn and focused on the West. English - as the international lingua franca - is the foreign language of choice in their curriculum. An upbeat attitude to the future and progress and a determination for success and increased prosperity hallmark the mood in the country. Equally so the teeming road traffic in the big cities.
In 1986 the Vietnamese government of the day moved to open up the country's economy with a policy of renewal known as ‘doi moí. However, the ensuing growth momentum and the western world's reawakened interest in the country suffered a severe damper as a result of the Asian financial crisis in the late 1990s. In the absence of the right economic framework conditions, foreign investors took flight in droves. But Vietnam has re-emerged as a growth market more emphatically than other countries in Southeast Asia and more substantially than at the beginning of the Nineties. Averaging 7 % p.a. over the past decade (7.7 % in 2004), Vietnam's GDP growth is remarkable. Despite the importance that agriculture still displays in the country's export statistics industry (+15.8 % in 2004) is by far the more dynamic sector of the economy, with private enterprise assuming the role of growth engine. The private sector already employs four times as many people as the public sector, even though state-owned enterprises are still the central economic factor.
Meanwhile the government is seeking international ties. Vietnam's membership of ASEAN, AFTA, APEC and the World Bank, bilateral agreements with the USA and EU, and not least its accession to the WTO targeted for the end of this year are fostering its dynamic development. That said, the attendant liberalisation of the domestic market is putting pressure on Vietnamese companies to invest. Now they have to keep pace with international suppliers. Industry and the infrastructure are reliant on modern technology from abroad - opening up opportunities for European industry. In many cases, though, the neighbouring Asian countries still head the field. They were much quicker out of the starting blocks once the crisis was over, securing ground on their western rivals, who had withdrawn their Vietnamese outposts at the end of the Nineties. Consequently four Asian states - Singapore, Taiwan, Japan and South Korea - hold the lead in terms of foreign direct investment.
Given the need for presentation platforms for modern technology and international consumer goods, the number of trade fairs and exhibitions in Vietnam is constantly on the increase. At present the exhibition market is dominated by Asian and local organisers. From Germany, so far Planetfair from Hamburg and Hannover Messe International, a subsidiary of Deutsche Messe AG, are present with their own fairs. Hannover Messe International has organised Engineering Production Machinery, EPM for short, since 1992 on a two-year basis, making it the first western exhibition organiser there after the market opened up. For the first time this year, from October 10 to 14, Planetfair arranged an exhibition for the water industry, H2O, in Ho-Chi Minh City.
It is there and in Hanoi that the country's two exhibition centres are located, reflecting the two cities different importance. As the seat of government and with access to the north where heavy industry is predominant, Hanoi is of interest mainly to those branches of industry that rely for their success on ties to public agencies. In the south tradeshow attendance is dominated by the rapidly expanding private sector. At present, though, neither exhibition location appears to have gained clear supremacy.
Both locations feature exhibition centres capable of satisfying current demand. The quality of these venues is acceptable, although it considerably lags the state-of-the-art exhibition centres built recently in Asia. And it is only a matter of time before the limits of capacity are reached. But for Ho-Chi-Minh-City at least, this will soon be remedied. With foreign capital, mainly from Taiwan, in the next two years a new exhibition site will be built. Wolfgang Lenarz

m+a report Nr.8 / 2005 vom 08.12.2005
m+a report vom 8. Dezember 2005