Vietnam emerges among acronyms

Rarely has there ever been an acronym more fortunate than “BRICs.” When Jim O’Neil from Goldman Sachs synthesized Brazil, Russia, India, and China (followed by South Africa) in 2001, the term began appearing in economics publications and everyday language. Soon it became synonymous with emerging markets, a web of situations growing relentlessly that threatened to undermine the industrial world’s primacy. The success of the acronym was institutionalized, and since 2006 the five heads of state have met to discuss politics and even gave life to a bank that—at least in its intentions—flanks multilateral banking institutions. The synthesis was followed by two attempts at sequels, both by the same authors: Next Eleven in 2005 and MINT (Mexico, Indonesia, Nigeria, and Turkey) in 2013.

In any case, the acronyms now seem rusty. Emerging countries are limping along and frequently don’t meet expectations. It’s not a matter of improvident international investors’ illusions as much as the failing of the governments’ expectations. The BRICs in particular demonstrate worrying slow-downs and declines. The reasons are many and varied: from the sanctions imposed on Russia to internal Chinese politics, and the Brazilian recession to India’s unrealized hopes. Even in their diversity, a common yet bitter and alarming data point emerges: these countries were not capable of self-reform with the courage to question experimental methods. They were fruitful, but they looked weary. The resources accumulated over years of development could have been used to dismantle old apparatuses, dysfunctional bureaucracies, and structurally open the countries to globalization. Instead, continuity prevailed and exacerbated political tensions that did not help development, as well as troubling nationalism that has strongly fueled tensions further.

Today, Vietnam is one of the few showpieces among emerging countries. The country is stable, attracts investments, and continually improves the living conditions of its population. For multinationals, it’s a valid alternative to China, where increases in the cost of labor have stimulated businesses—foreign and Chinese—to delocalize toward neighboring countries. Even the recent devaluation of the renminbi has proved to be an advantage because Chinese competition—more inexpensive on paper—is compensated for minor import costs by Beijing. The negotiations with the European Union and for the Trans-Pacific Partnership—the free trade agreement resting on the pillars of the US and Japan—also create a strong magnet. Vietnam’s GDP will reap the benefit, expected to grow 6.5% this year and 7% in 2016. In addition, exports are increasing more than in any other far eastern country—including China. Finally, the image of Vietnam’s economic capital, Ho Chi Minh City, is changing: automobile numbers are increasing at the expense of motor bikes, and new skyscrapers tower over the financial district. Therefore, Vietnam presents as a happy exception to emerging markets. Among popular acronyms, it would have been more prescient to favor The Economist’s “CIVETS” from 2009. In addition to Columbia, Indonesia, Egypt, Turkey, and South Africa, it’s the only one to contain the V for Vietnam.