HO CHI MINH CITY, Vietnam — Four years ago, the future looked bright for Vietnam.
Investors and economists proclaimed that this emerging market of 86 million people would grow into an “Asian tiger,” the next country to reach middle-income status by attracting foreign investment.
Firms that once sought Chinese labor were diversifying into Hanoi and Ho Chi Minh City, eyeing the young and cheap workforce.
And multinational companies such as Intel and Samsung led the betting when they built plants in the country worth $1 billion and $670 million, respectively.
Now, the economy is overheating. It’s a far cry from a full-on collapse. Yet, Vietnam’s rocky economy already shows signs of the kind of troubles that sparked the now worldwide Occupy movements. Will people be occupying the streets of Hanoi next?
Government officials are taking cosmetic steps to cut down the resulting inflation and the budget deficit.
In September, inflation reached 22 percent year-on-year, wearing down Vietnam’s cheap labor attractiveness vis-a-vis other Southeast Asian countries such as Malaysia and Cambodia.
If government officials are serious about reviving that dying optimism, they’ll first need to rein in their reckless and secretive state-run companies, bureaucratic behemoths that are sabotaging the country’s ability to compete.