Vietnam is catching U.S. attention as an alternative to China. Yet, its lack of skilled workers and poor roads limit its appeal.
President Joe Biden will visit Hanoi soon. This shows growing economic ties between the once-enemy nations.
Global brands like Samsung have set up in Vietnam. They aim to lessen reliance on Chinese manufacturing.
Haiphong’s managers predict 6.3% growth in 2023. This is based on World Bank data. Heesung Electronics’ Director points to an issue.
“We need more skilled workers,” he said. There aren’t enough schools for training engineers.
Biden’s visit may boost economic bonds, says the Vietnamese government. Adam Sitkoff of the Hanoi American Chamber agrees.
“Vietnam must improve to attract more funds,” he stated.
Only 11% of Vietnam’s workers are skilled. Ho Chi Minh City reports a shortfall of 165,000 trained employees. City officials provided this number.
Bad roads and high transport fees are problems too. Energy blackouts during high demand add to these challenges.
Power Outages
World Bank reports confirm this. Power outages in May and June cost about $1.4 billion. Some northern companies lost 10% in revenue.
“Vietnam can’t keep up this growth,” says Sitkoff. The nation drew $18 billion in foreign funds in early 2023.
That’s an 8% rise compared to last year. Samsung opened a $220 million research hub last year.
Vietnam aims to train workers in tech and energy.
“Cheap labor is not our goal anymore,” said a local leader. Young locals aim for better pay, now averaging $300 a month.
Matt Kantrud, a factory manager, finds Vietnam still a good bet. His company is building a second plant for US$40 million.
This is their only base outside China.
Vietnam looks to tap into new growth areas. It needs to focus on education and better roads to succeed.
Context
Vietnam and the U.S. have a complex history. They were at war from 1965 to 1973. After the war, both nations had limited interaction.
They only resumed full diplomatic relations in 1995. In recent years, their economic ties have strengthened.
Vietnam has become an important trade partner for the U.S., especially in textiles and electronics.