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Vietnam from the poorest country in the world to a booming region

2025-05-02 18:13:01Kosova&Bota SHKRUAR NGA REDAKSIA VOX
Vietnam from the poorest country in the world to a booming region
Hanoi, Vietnam

In 1990, the average per capita income in Vietnam was less than $100 a year. Since then, much has changed: the economy is growing like few others in the world.

On January 23, 1973, US President Richard Nixon addressed his fellow Americans and announced the end of the Vietnam War. At first, this meant only the withdrawal of American troops. Peace came two years later. The country was divided and devastated.

Years of extreme poverty followed, lasting into the 1990s, according to historian Reiner Zitelmann, who has studied Vietnamese history extensively. “In 1990, Vietnam was the poorest country in the world, even poorer than all of Africa.” Its per capita gross domestic product was $98. That was less than Sierra Leone or Somalia.

German company also in Vietnam

While 35 years ago the average annual income was $98, today it is around $5,000. It is not much, but it represents a big step forward. The change began in 1986. The disastrous economic situation forced the government to launch an opening policy called “Doi Noi” (“renew”). This allowed foreign companies to enter the country. Even German companies. Peter Buerstedde works for GTAI, an organization that advises German companies looking to invest in Vietnam. According to him, progress did not come until much later: “The significant flow of foreign investment did not come until the country joined the World Trade Organization in 2007, and most recently, in 2018, there was a big boost from the punitive tariffs on Chinese goods under the first Trump administration.”

Vietnam from the poorest country in the world to a booming region
Ho Chi Minh City, 2025 | Parade for the 50th anniversary of the end of the war

Towards climate neutrality

Is Vietnam now experiencing new growth, as it benefits again from the trade conflict between China and the US? The plans are ambitious: Vietnam aims to become an industrialized nation by 2045. And not only that, according to Buerstedde. Vietnam also aims to achieve climate neutrality by 2050, like many other countries around the world. But there is still a long way to go for an economy like Vietnam's, which still relies on coal for half of its electricity consumption.

Vietnam seems to want to outdo itself. By 2050, it also aims to become one of the world's leading players in the semiconductor industry. However, Dietmar Schwank of the Austrian Chamber of Commerce in Hanoi has doubts: "More than 40 foreign semiconductor companies have already invested in Vietnam, but Vietnam will need around 50,000 specialized semiconductor engineers by 2030 if it wants to maintain the planned pace of development."

Country with low wages and fast growth rates

DAX-listed Infineon, Germany's largest semiconductor manufacturer, also produces in Vietnam. Germany is well represented in Vietnam and has room for growth, according to GTAI expert Buerstedde: "Every year, between five and ten factories are added, so the development is relatively constant, but the biggest investors are the Japanese, Chinese, Taiwanese or Koreans."

V.Hirth/ARD


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