VIETNAM: Vietnam struggling to build up logistics

Vietnam’s attractiveness for foreign investors continues to rise, particularly as China becomes increasingly expensive as an outsourced manufacturing location and as manufacturers seek to diversify their production centres. Foreign direct investment has surged in the last year from US$4.4 billion in the first five months 2007 to US$15.3 billion in the same period this year. […]


Vietnam’s attractiveness for foreign investors continues to rise, particularly as China becomes increasingly expensive as an outsourced manufacturing location and as manufacturers seek to diversify their production centres.

Foreign direct investment has surged in the last year from US$4.4 billion in the first five months 2007 to US$15.3 billion in the same period this year. But rapidly rising inflation, now running at nearly 25 per cent has resulted in significant depreciation of the Vietnamese currency.

Infrastructure is also lagging far behind that of its Chinese neighbour with Transport Intelligence’s Managing Consultant, Joel Ray, noting that “while there are many infrastructure plans in place, the execution of these is poor, with many completion dates scheduled for 2012 and beyond”.

As an example Ray pointed to the new Long Thanh airport complex in Saigon/Ho Chi Minh City which is not scheduled for completion until 2010-12 with the cargo terminal not scheduled for completion until 2015.

He also noted that the development environment is also quite different from China, with the local population able to object effectively to developments. For example, Mr Joseph Wann Shang Jye, the manager of the Vietnam International Container Terminal in Ho Chi Minh City, cited the ability of local residents to block the building of a new road to the terminal due to their hope for higher compensation.