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Vietnam is attracting foreign investment, thanks to free-trade agreements and a young, skilled workforce. As Vietnam reaches middle-income status, it faces challenges to get the most out of the private sector and to reform.

April 25, 2023 . 11:21 AM

1 min read

Vietnam is attracting foreign investment and hitting record deals, thanks to free-trade agreements and favourable geography.
Vietnam has a young and skilled workforce, and since the early 1990s the government has been open to international trade and investment, giving foreign investors confidence to build factories.
Vietnam faces challenges in getting the most out of the private sector, and only 36% of its firms are integrated into export industries.
The Ministry of Planning and Investment teamed up with the World Bank to lay out a strategy for change earlier this year, detailing how the country can make state-owned enterprises (SOEs) more commercial and reinvigorate the private sector.
As Vietnam reaches middle-income status, it is about to lose access to preferential financing from development banks, putting pressure on the government to sell shares in SOEs and to reform.