US-North Korea summit raises international role of Vietnam
Peter Ryder, CEO of Indochina Capital
It is passé now to say that the US-North Korea summit between US President Donald Trump and North Korean Chairman Kim Jong Un in Hanoi has elevated Vietnam’s international profile.
Raise it, it has, to the point now that possibly more media attention has been paid to Vietnam in the context of (1) why Vietnam was chosen to host this world critical tête-a-tête, (2) what impact the summit will have on Vietnam’s economy and geo-political standing going forward and (3) will Vietnam become the model of successful economic reform for North Korea, than for the rendezvous itself between President Trump and Chairman Kim.
Many observers have commented that previously even major geo-political events that involved Vietnam were held elsewhere, pointing to the 1954 Geneva peace conference and the Paris peace talks of the late 60s and early 70s. And yet look where we are today, with Vietnam hosting arguably the most significant global event of 2019. To paraphrase a well-aged American brand campaign, “Vietnam, you have come a long way!”
So now we are left to contemplate what impact this high-profile Hanoi peace summit between recently sworn enemies will have on Vietnam’s economy – what opportunities it presents – particularly as it relates to foreign investment, and, specifically as it is near and dear to me, as Indochina Capital’s CEO, Vietnam’s real estate market.
I would start by pointing out that Vietnam’s profile in the emerging market world has already been meaningfully elevated by recent geo-political events, most significantly the closely followed US-China trade debate, which has seen US companies and companies from other countries begin to shift means of production from China to Vietnam, and Vietnam becoming a signature to the CTTPP trade pact. These have been largely responsible for the big pick up of foreign direct investment (FDI) over the first two months of 2019 (this I might add over the record highs experienced in 2018).
Although there is a reasonable chance that the American-Sino dispute will soft land, the shifting of manufacturing resources will continue as Vietnam offers lower labour costs and becomes an even more attractive trade partner via the CTTPP. Certainly, the profile-raising Trump-Kim negotiations in Hanoi will add to this momentum and further stimulate global interest in Vietnam as a key global manufacturing hub and trading partner. The value to Vietnam of being seen around the clock at the pinnacle of international diplomacy is immeasurable in a marketing context, in particular to American concerns. This is as true for tourism as it is for the manufacturing sector.
Turning to tourism and Vietnam’s booming hospitality industry, there is no doubt that the US-North Korea summit will bring about more interest in Vietnam as an attractive, intriguing, “must discover” destination. Everyone I know involved in this arena has mentioned to me that everyone they know with any interest in travel is now planning a trip to Vietnam. Those that have been here before are planning their next visit. Hanoi hotels, restaurants, bars, and clubs benefited big time. That benefit will spread country-wide as more and more tourist and business visitors arrive.
Again: 24-hour global media coverage, focused on the summit, but much of which was devoted to telling the world about modern Vietnam’s amazing growth story, thick cultural history, fabulous cuisine, diverse natural beauty, and wonderful people, bought more for Vietnamese tourism and hospitality than a perfectly-designed media campaign. Ironically, this is all happening when serious initial discussions are underway between Vietnamese aviation authorities and airlines and their American counterparts to launch the first direct, non-stop service between the United States and Vietnam, a milestone that will further open the gates of tourism.
As real estate developers with a focus on creating one-of-a-kind, world-renowned resorts, hotels, and related residences, I could not be more exhilarated by Vietnam taking the stage as a lead actor in global diplomacy. The US-North Korea summit will undoubtedly cause a surge in business interest and tourism, which will help fill the country’s resorts and hotels, and which will lead to more demand and investment interest in commercial and residential property as well. ICC-Kajima, our property development arm has taken notice!
On a personal note, as a long-time friend of Vietnam, I take deep emotional pride in Vietnam becoming a major player on the global geo-political stage. I’m sure it will not be the only time.
Read the full article on Baodautu.vn
