Can Vietnam Catch Up with Thailand's Per Capita GDP in 15 Years?
The economic trajectory of Vietnam presents a compelling narrative of growth and advancement, which could see it surpassing Thailand's per capita GDP within the next 15 years. This potential is underpinned by a series of positive economic indicators and strategic initiatives, despite challenges and pitfalls experienced by the Thai economy.
Comparative Economic Analysis: Vietnam vs Thailand
Vietnam's economic landscape is marked by a
Strategic Improvements Needed for Vietnamese Economic Success
To bolster its chances of outpacing Thailand, Vietnam must focus on several key areas. Firstly, it needs to encourage foreign firms to invest more in locally produced content along the supply chain. This strategic move can significantly enhance economic value-added, replicating the success Thailand achieved in the automotive industry during Japan's dominance. Secondly, Vietnam should reconsider its population growth targets to achieve a sustainable balance between the required labor force and the optimal population size to avoid the dilution of per capita income.
Potential Roadblocks to Sustained Economic Growth
While Vietnam's growth potential is established, a prolonged period of high growth can lead to structural constraints, such as infrastructure bottlenecks. If not managed properly, these constraints can become serious impediments to sustaining economic growth. Historically, Thailand faced severe economic challenges in 1997, primarily due to poor economic management. A similar scenario must be avoided to ensure a stable and robust economic future for Vietnam.
Recent Incidents and Trust Issues
The recent incident involving the Vietnamese automaker VinFast, which exported substandard electric vehicles (EVs) to the United States and encountered resistance from insurance companies, highlights another critical aspect of economic growth. Trust is a fundamental component of successful business operations. VinFast's attempt to offer extra batteries encountered major obstacles due to the insurers' refusal to issue policies, pointing to a lack of trust in their product quality.
Case Study: VinFast Incident
The export of substandard EVs to the U.S. and subsequent issues with insurance policies serve as a stark reminder of the consequences of underestimating consumer trust. Trust is a non-negligible factor in establishing a successful global business presence. For Vietnam to surpass Thailand economically, it must emphasize customer trust and consistency in product quality to rebuild and maintain consumer confidence.
Future Prospects for Vietnam and Thailand
While Vietnam's economic growth presents a compelling story, it must navigate the potential pitfalls that have affected Thailand in the past. By addressing structural issues and maintaining a focus on consumer trust, Vietnam can indeed catch up with Thailand's per capita GDP within the next 15 years. However, perseverance, strategic planning, and a keen focus on long-term sustainability will be crucial.
As a Thai citizen, I express no ill feelings towards Vietnam's rise to economic prominence. Instead, I view this as a testament to the power of perseverance and strategic planning. Both nations can learn from each other's successes and challenges to create a brighter economic future for their respective populations.