In the two months since Bill Clinton lifted a 19-year-old trade embargo, U.S. companies have scrambled to do business in Vietnam. This week in Hanoi, representatives of 45 American companies, ranging from Pizza Hut and General Foods to Microsoft and IBM, are hawking their wares at Vietnam's first U.S. trade fair since Saigon fell in 1975. It's all part of an American effort to get a piece of an economy that over the last six years has grown at a 6 1/2 percent annual rate. But U.S. companies expecting to strike it rich in Vietnam are apt to be disappointed.
"American businessmen," warns a new report by Samuels International Associates, a trade consulting firm, may be "simply fooling themselves about the short-term prospects of one of the poorest markets in the world." Vietnam's total imports last year totaled $1.3 billion -- as much as U.S. companies sell to Japan in 10 days. Imports may top $4 billion this year, but that's still a relative pittance. What's more, the bulk of Vietnam's overseas purchases are refined petroleum products, not consumer goods like razor blades.
What's more, per capita annual income for Vietnam's 70 million or so people is a minuscule $200, about one quarter of that of the Philippines and less than half of China's. Nor is Vietnam the next Saudi Arabia, as some media reports have suggested: With an estimated 2.5 billion barrels in proven reserves, Vietnam has about as much oil as Malaysia, a nation few would call oil rich.
That's not to say that business opportunities in Vietnam are a bright and shining lie. Economic prospects are indeed upbeat. With a literacy rate of almost 90 percent, Vietnam boasts a work force that is well educated even by the standards of Southeast Asia. Foreign investors are also attracted by rising incomes and cheap labor costs. Still, Vietnam is perhaps a decade or more from becoming the next Asian economic tiger. So while doing business in Hanoi may be good for America's psyche, it probably won't do much for U.S. companies' bottom lines.
