Because of very cheap labor costs, China was the choice of many multinational companies as they set up factories in the industrial zones set up by the Chinese. Although China is still the fastest growing economy in the region, Vietnam is slowly gaining grounds as the second fastest, after China.
Here, workers at foreign-invested factories set up in the cities by law earn a minimum of $55/month. Compare that with our mandated wages. No wonder these multinationals are scampering over to Vietnam.
In 2005, Vietnam racked up $6.6 billion in exports. There is a factory in the outskirts of Ho Chi Minh City which employs around 1,700 locals producing, among other things, stuffed animals for Disney. Most of these factory workers are young people who are not college graduates but are now proud dollar earners, earning more than the $55 minimum wage because most of them are eager to work overtime. With this, they earn between $75 to $90/month.
Incidentally, did you know that more than half of Vietnam’s population is under 25 years old?
Anyway, in the last five years, Vietnam’s average GDP growth is a respectable 7.4 percent better than any other Asian economy, except China. Their entry into the World Trade Organization will grant them permanent normal trade relations. Already, the United States has given them incentives to boost their exports to the US Average tariffs of Vietnamese exports to the US have been slashed from 40 percent to four percent. Their catfish filets have been filling up the American supermarkets, although, because of intense lobbying, there has been a legislated move to stop this massive influx of catfish into the American market because the Southern farmers raised a howl. The US FDA was directed to restrict all imports of catfish not native to the US. However, if they called their catfish filets by another name, these were still allowed to enter the US!
Vietnam’s economy grew by 8.4 percent in the year 2005. Before, 51 percent of their population lived below the poverty line (earning less than $1 a day). Today, they have reduced this figure to only eight percent. Their recent bilateral agreements allowed their export industry to grow by leaps and bounds. Considering that they only normalized trade relations with the US in 1994, Vietnam has indeed arrived. They are now one of our major competitors in garment exports, although the US garments manufacturers do not consider them as threats to their own textile industry. Vietnam is lumped together with Mexico and China as exporters of cheap garments.
The economic liberalization of Vietnam has allowed its economy to grow very fast, faster than its neighbors in the region. Because of the low labor costs, several companies are setting up camp here.
Intel plans to build a $300 million semi-conductor test-and-assembly plant north of Ho Chi Minh City, one of only six such factories in the world. The Vietnamese will surely benefit from Intel’s IT training and software development programs. It is already teaching some 30,000 teachers in IT skills. This knowledge will be brought to rural areas to improve their digital literacy.
Panasonic and Yamaha are now solidly entrenched in Hanoi’s industrial parks. Canon is also set to build the largest inkjet printer factory in the world in Vietnam. Disney and Nike are also big investors in Vietnam, with Nike employing some 130,000 workers.
The future looks good for this war-torn nation. The young population now are generally factory workers, some five million of them, as opposed to the generation of their parents who only knew how to farm their small plots and fish in the Mekong River. If this nation, whom everybody in the planet regarded as a God-forsaken place for more than a decade can rise beyond its ashes, surely we too can. But not with uncompetitive legislated wage increases.
Sir Cliff Richard is coming to town. His Here and Now Tour is scheduled on Feb.13 at the Araneta Coliseum, favored venue for impresarios because of its huge capacity.
Cliff is definitely one of the highlights of my youth. I eagerly followed all his hits. Early favorites were Constantly, Theme for a Dream, The Next Time, When the Girl in Your Arms is the Girl in Your Heart, The Minute You’re Gone, Legatta Ad Un Granello Di Sabbia and Bachelor Boy, just to mention a few.
Legatta hit the top of the charts and stayed there for some time. It was in a foreign language, Italian to be precise, and you can’t imagine that half of the neighborhood memorized the full lyrics and could sing the song with eyes half closed, without even understanding the meaning. Who cared about the meaning of the lyrics, when the melody spoke of young love, and Cliff sang it with his characteristic romantic style. Everyone hummed How Wonderful to Know, Ocean Deep and I Only Live to Love You everywhere – from the campus to the office, from the jeepneys to the non-air-conditioned cars back then.
Ticket prices range from P500 to P8,500, so there is a price for every budget. It’s an early Valentine treat.
Mabuhay!!! Be proud to be a Filipino.
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