Vietnam provides the model for export-led economic growth: ANZ

20.01.2017

VIETNAM provides the template for export-led growth from agricultural production, an economist at Australia & New Zealand Banking Group said.

“We have seen Myanmar, Laos and Cambodia trying to imitate Vietnam’s model of luring foreign direct investment to prop up their export capacity,” Singapore-based Eugenia Victorina was quoted as saying in a Bloomberg report.

According to the World Bank, Asia’s smallest economies are growing faster than giants such as China, which has forecast economic growth of 6.5 percent for 2017.

The three countries mentioned by Victorina will post the most rapid expansion in Asia after India from 2017 to 2019, sustaining growth rates of about 7 per cent.

Myanmar, Laos, and Cambodia are among the least developed countries in Asia with the combined size of their economies amounting to less than US$100 billion, about a third of that of neighbours like Singapore, Malaysia and the Philippines.

“The promise of transforming the Mekong into a manufacturing hub has a lot of potential,” Victorina was quoted by Bloomberg as saying.

Vietnam reported economic growth of 6.21 per cent last year. The country, traditionally known as a top supplier of products such as coffee, rice, garments and footwear, has recently attracted more investment from technology giants such as Intel and Samsung. Phones and computer products are now among its top export earners.

A senior economist at the National Economic Research Institute in |Laos, Leeber Leebouapao, told Vientiane Times this week that Laos was trying to shift its economy away from reliance on the resource |sector.

He was optimistic about the growth of the economy this year following Laos’ membership in the Asean Economic Community.

Late last year, the National Assembly approved amendments to the Investment Promotion Law that aim to attract better quality foreign investment to Laos, particularly to the non-resource sectors.

The government has implemented stronger measures to enhance transparency and governance, exposing corruption and thereby contributing to an improved investment climate in the country.

Leeber said the Lao economy would grow at least 7 per cent this year as many big projects that had been delayed have restarted.

One example is the near-$6 billion railway project, linking Vientiane to the Chinese border over a distance of 427 km. This project should serve as a key engine for economic growth in the country.

In addition, the government has established at least 12 special economic zones to attract foreign investment into the manufacturing sector and generate jobs.

More than $4.7 billion has been committed towards investment in these zones. Of the total figure, more than US$1 billion has been spent on development activities in the zones that were carried out by 158 companies from around the world.


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