Vietnam's accession to the World as a economic power may have started ... after China, Vietnam is emerging as the world's next factory of choice for labor-intensive goods. The 4 million motorcycles on the streets of Ho Chi Minh City offer a remarkable noisy testimony to the prosperity that beckons Vietnam.
The labor cost in Vietnam is half that of China, while worker productivity is about the same, starting next year, the government will increase the mandated minimum wage for foreign-funded companies in Ho Chi Minh City and Hanoi, the national capital, by 13 percent to 1 million Vietnamese dong ($62).
Also Vietnam's textile industry has been provided a quota-free access to the U.S. Joining the WTO regime, however the risk for Vietnam is inflation, which accelerated to 10 percent last month, the fastest pace in three years, in the short run, Vietnam must stand ready to sacrifice some economic growth to halt the increase in prices.
On the whole, though, Vietnam is on the road to prosperity.
Like most developing countries, Vietnam is dogged by corruption and red tape. It must strive to improve its record now that it's getting the investments it needs for the workers to graduate from motorcycles today to cars in the future.
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