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Country Reports

Vietnam Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

During recent years, Vietnam has developed a competitive advantage in higher value-added manufacturing sectors such as electronics. Continued foreign investment, recently boosted by a diversion from China, will support real GDP growth rate of more than 6% during the coming years. The communist country's single-party system underpins broad policy stability: the prime minister and the general secretary of the Communist Party of Vietnam are close allies and have party support.New trade agreements and loose monetary policy will facilitate foreign investment. A new free trade agreement with the European Union aims at removing 99% of tariffs by 2028. Vietnam will implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership from end-2018, and it is a prospective member of the ASEAN-led Regional Comprehensive Economic Partnership. Its banks have recently rapidly extended credit, and the sector's non-performing-loan ratio is close to 10%. Vietnam has built foreign reserves from less than USD13 billion in 2010 to USD60 billion in 2018 to defend its US dollar-pegged currency.However, privatisation programmes to reduce the public sector's control of one-third of the economy have disappointed. Of 137 state-owned enterprises slated to be divested between 2017 and 2020, fewer than 20 have been sold. Most initial public offerings (IPOs) have involved small stakes that fail to offer investors control over often unprofitable businesses. In addition, despite a 2015 government decree requiring state-owned enterprises to publish accurate financial and governance statements, most have not yet done so. A renewed privatisation drive is probable in 2019 – not least to maintain the fiscal deficit at levels below 4% of GDP.Widespread protests, including arson attacks targeting Chinese-owned firms, are probable in the event of high-profile Chinese-Vietnamese confrontations in disputed areas of the South China Sea, or if proposals to establish special economic zones with extended leases for foreign – mostly Chinese – investors are resurrected by the government.
Last update: July 24, 2019

Operational Outlook

Stringent restrictions on officially sanctioned work stoppages have spurred an increasing number of wildcat strikes at domestic and foreign companies in the southern industrial zones. Industrial action is generally peaceful and mainly affects the low-end manufacturing sector, such as textiles, garments, and footwear. Corruption is a major risk, especially in government procurement, with officials being likely to demand a percentage of the bidding amount for contracts. The current high-profile corruption crackdown will probably reduce petty bureaucratic corruption temporarily, but foreign investment projects also face elevated risks of disruptions if their local partners become embroiled in corruption scandals.

Last update: April 25, 2019

Terrorism

Moderate

Terrorist incidents are extremely rare. Any possible incidents are most probably linked to overseas anti-communist opposition groups such as the California-based Vietnam Reform Party or the operationally dormant Government of Free Vietnam. In December 2017, a Vietnamese court sentenced 15 people to prison terms totalling over 100 years for an alleged plot to detonate two improvised explosive devices at Ho Chi Minh City's International Airport, supposedly at the instigation of an overseas opposition group. However, IHS Markit believes this to be an isolated incident, and none of the overseas Vietnamese opposition groups to pose any credible terrorist threat.

Last update: June 21, 2019

Crime

National crime statistics and media reports have indicated increasing rates of crime in Vietnam. However, levels of violent crime remain low compared with many Western countries. Incidents of petty theft, pick-pocketing, and bag snatching by thieves on mopeds appear to have risen in tandem with increasing urbanisation, particularly in Ho Chi Minh City and Hanoi, but also in Haiphong, Quang Ninh, and Hai Duong provinces. With increased tourism, more foreign visitors have been targeted in such attacks. Crowded streets, the areas outside tourist hotels, and markets are particularly dangerous and prone to such attacks.

Last update: June 13, 2019

War Risks

Relations with China can become strained over the countries' disputed maritime claims in the South China Sea and have triggered large and violent protests in Vietnam. Nevertheless, a full-scale conflict between China and Vietnam is unlikely. Although Vietnam is militarily weaker than China, China desires to avoid the negative geopolitical and economic consequences that a conflict would bring.

Last update: June 13, 2019

Social Stability

Elevated

Environmental protests are increasingly frequent, facilitated by social media, and are occasionally attended by thousands. Such protests can lead to minor property damage at the factories concerned. Protests over inadequately compensated land acquisition normally occur at local government offices and can lead to fighting between protesters and the police. However, large-scale violent protests are rare; a notable exception was the attack against Chinese-owned and China-associated factories in May 2014 following an escalation in the South China Sea territorial dispute between China and Vietnam.

Last update: April 25, 2019

Health Risk

Very high

Vaccinations required to enter the country

Proof of vaccination against yellow fever is required if traveling from a country with risk of yellow fever transmission and over one year of age.

Routine Vaccinations

Hepatitis A: A vaccine is available for anyone over one year of age. The vaccine may not be effective for certain people, e.g. those born before 1945 and who lived as a child in a developing country and/or have a past history of jaundice (icterus). These people can instead get a shot of immune globulin (IG) to boost their immunity against the disease.

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Yellow Fever: A vaccine is available for children over the age of one year.

Other Vaccinations

Typhoid Fever: If your travels take you to regions with poor sanitary conditions (for children two years old and up).

Rabies: For prolonged stays in an isolated region (for children from when they can walk).

Malaria: Recommended preventive medication for travel to the south of the country (provinces of Dac Lac, Gia Lai, Khanh Hoa, Kon Tum, Lam Dong, Ninh Thuan, Song Be, and Tay Ninh) - proguanil and atovaquone (sometimes marketed as Mepron) or doxycycline (sometimes marketed as Vibramycin); for all other areas except for the Mekong Delta - proguanil and atovaquone (sometimes marketed as Mepron), doxycycline (sometimes marketed as Vibramycin), or mefloquine (sometimes marketed as Lariam); in Mekong Delta - Mosquito avoidance only.

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Natural Risks

Severe

Travelers to Vietnam should note a few other risks as well. First, typhoon season lasts from June to December. The country sees an average of ten storms per year, particularly the northern and central regions.

In November 2009, Typhoon Mirinae, after battering the Philippines, left 50 dead in Vietnam; the majority of the deaths were due to the severe flooding that struck the provinces of Phu Yen, Binh Dinh, and Gia Lai (center). Typhoon Sarika hit in mid-October 2016, leading to 30 missing people and flooding in over 120,000 homes in Quang Binh province.

The summer monsoon season regularly results in significant flooding (Red River basin in the north and the Mekong delta in the south).

Drought, heatwaves, and floods are also natural risks in Vietnam, which counts among the five countries most affected by the climate imbalance.

Last update: April 5, 2019

Transportation

Moderate
Last update: April 5, 2019

Practical Information

Climate

Vietnam has a tropical, hot, and humid climate. There is a significant difference between climatic conditions in the south (very hot in March and April: 35°C) and the north (cooler). The country's central regions receive high levels of rainfall between July and January as do the southern regions between July and November. The rainy season lasts from May until October in the north and during this period temperatures are high (30°C to 40°C). Torrential rains are common in July and August and the country is often hit with typhoons between September and November. The dry season (December to April) is pleasant with mild temperatures.

Useful Numbers

Country Code: +84
Police: 113
Fire Dept.: 114
Ambulance: 115

Electricity

Voltage: 127/220 V ~ 50 Hz

Outlets:

Last update: April 5, 2019