SEATTLE, Washington — In the past three decades, global poverty rates have declined rapidly. Since 1990, nearly 1.1 billion people
have risen from extreme poverty. Since 2000, global poverty rates have fallen
by more than 50%. This fall in poverty has also brought new economic opportunities in emerging markets. According to the Atlantic Council
, “emerging markets contribute one-third of global gross domestic product (GDP) and their output was projected to have amounted to half of global GDP between 2026 and 2030.” For the United States, emerging markets have become some of the nation’s fastest-growing trading partners
and offer tremendous opportunities for investment. Of all emerging markets, the rise of Vietnam is one of the best examples of poverty reduction and the economic opportunity that can result from it.
The Decline of Poverty in Vietnam
When referencing the decline of poverty that has characterized the past three decades, it is impossible to ignore the rise of Vietnam. In the past 30 years, the nation has undergone a transformation and poverty reduction has played a fundamental role. As reported by the World Bank
, “the poverty headcount in Vietnam fell from nearly 60% to 20.7% in the past 20 years.”
This fall in poverty has not occurred in isolation. Vietnam has also achieved several milestones
in relation to the United Nations’ Sustainable Development Goals. The nation has expanded health insurance coverage to over 80% of the population, increased access to safe drinking water to over 90% of the population and achieved nearly universal access to electricity in Vietnamese households.
The rise of Vietnam has not left the nation in perfect condition. As the economy has expanded, new challenges have arisen, particularly in addressing high poverty levels that still exist among Vietnam’s ethnic minority population. Despite this, Vietnam serves as an excellent example of one of the many countries that have played a part in global poverty reduction through the decades.
Economic Outlook in Vietnam
As poverty rates declined in Vietnam, its economy transformed completely. According to the World Economic Forum
, when the 20-year-long Vietnam War ended in 1975, Vietnam’s economy was one of the poorest in the world. Since the end of the war, Vietnam has embraced free trade and deregulation, joining trade agreements, such as the Trans-Pacific Partnership and lowering tariffs across the board.
Currently, Vietnam is situated as one of the most rapidly growing economies in the world. Statistics from the World Bank
indicate that since 2010, Vietnam’s GDP growth has been at least 5% per year, peaking at 6.8% in 2017. Additionally, the nation’s GDP per capita is now ten times what it was in 1985.
The rise of Vietnam has made the nation an important global trading partner. It has drawn foreign investment from large technological and apparel corporations and has become a key exporter
of technological equipment, sports footwear and textile products. With the fastest-growing middle class
in Southeast Asia, Vietnam also offers a large consumer base for foreign products. As the nation’s poverty rates have fallen, it has transformed from one of the poorest countries in the world to one with rapid economic growth and vast potential.
Opportunity for the United States
The rise of Vietnam has resulted in a spike in trade with the United States. As reported by Forbes
, Vietnam is now the United States’ fastest-growing trading partner. Exchange with Vietnam is responsible for billions of dollars of trade each year. In 2018
, “U.S. goods and services trade with Vietnam totaled an estimated $62.6 billion.”
The nation currently serves as a major site of investment for several U.S. companies. In 2017, the United States signed a series of trade deals
with Vietnam, which featured “$3.4 billion in U.S. produced content that would support 23,000 jobs.” Among these was a $5.58 billion deal with General Electric and a $650 million deal with Hilton Worldwide to manage Vietnamese hotels.
While the United States currently relies on Vietnam more heavily for exported goods, there are signs that Vietnamese consumers are consuming more U.S. products. U.S. exports of goods increased by 246.9% and U.S. exports of services increased by 110% since 2008. According to the Office of the United States Trade Representative
, “U.S. exports of Goods and Services to Vietnam supported an estimated 54,000 jobs in 2015.” As Vietnam’s middle class develops, these numbers can only be expected to increase.
The rise of Vietnam is a prime example of the economic opportunities that emerge as poverty falls. Those in Vietnam have seen dramatic improvements in the quality of life throughout the past three decades. Additionally, the nation has become a critical player in the global economy and a key trading partner to the United States, providing investment opportunities for U.S. companies and a consumer base that can support U.S. jobs.
– Michael Messina