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Viet Nam rises in opportunity index
Viet Nam has risen two places to 16th in the 2010 emerging markets opportunity index from 2008, according to a report released yesterday by Grant Thornton International.
Its economy has become increasingly open in recent years – reinforced by accession to the World Trade Organisation in 2007 – and increasingly diversified, although agriculture still accounts for more than one-fifth of total output, the report cited.
It said, between 1990 and 2000, inward FDI flows averaged US$1.3 billion. FDI inflows in 2009 had risen to almost US$ 10 billion whilst registered FDI commitments in 2009 had risen to US$ 20 billion.
The Grant Thornton emerging markets opportunity index ranks the level of opportunity for investors in 27 emerging economies across the globe. Taking account of key factors such as , wealth, involvement in world trade, growth potential and levels of human development, it highlights these markets as investment prospects with their large, rapidly expanding and increasingly affluent economies.
In the index the top five countries in 2009 remained the same as last year. China leads the way thanks to its huge consumer market, increasingly open economy and trade growth, followed by the other developing Asian powerhouse, India. Russia, thanks to its wealth of natural resources, is third, followed by the two largest economies in Latin America – Mexico and Brazil.
"The importance of the emerging markets to the world economy has been brought into sharper focus as the world emerges from recession. Not only have these economies been less severely hit, but they are also recovering more quickly, with growth rates over the next two years forecast to be double that of more mature economies," Ken Atkinson, Managing Partner of Grant Thornton Vietnam said.
However, the survey also reported that businesses in emerging markets fear their growth prospects are being hampered by poor access to finance and a lack of highly-skilled workers to a much larger extent than their counterparts in more mature economies.
"The opportunity for investors from both mature and emerging markets to feed off this optimism and help these businesses to overcome the barriers they face regarding expansion are enormous. Indeed, these markets and their businesses are developing so rapidly and powerfully that ignoring them could represent a risk to long term profitability," he said.
Meanwhile the Grant Thornton International Business Report 2010 said the future looks bright for emerging economies.
A balance of +57 per cent of privately held businesses (PHBs) in 14 of the world's leading emerging markets indicated that they were optimistic about the prospects for their country's economy in the year ahead.
The balance is the proportion of businesses reporting they are optimistic less those reporting they are pessimistic.
At the same time, a balance of just +2 per cent of businesses in mature economies indicated that they were optimistic. These figures compare with a global average of +24 per cent.
At an individual country level, emerging economies occupy four of the top five places in terms of optimism for the year ahead. Chile (+85 per cent), India (+84 per cent), Viet Nam (+72 per cent) and Brazil (+71 per cent) are only separated by Australia (+79 per cent). Of the other emerging economies, Botswana, mainland China, South Africa, Malaysia and Poland all boast optimism balances of more than 40 per cent.
The International Business Report (IBR) surveyed a sample of over 7,400 chief executive officers, managing directors, chairmen or other senior executives in medium to large PHBs across 36 economies.
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