Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
Bartleby Related Questions Icon

Related questions

Q: Covid 19 caused many small businesses in Oman to close operations . Explain which type or types of…
A: The unfortunate Covid-19 pandemic has impacted businesses worldwide.
Q: Topic: Introduction  to international business Please read and answer as thoroughly and lengthy as…
A: Discussed below is a detailed strategy on how to enter international business.
Q: What are the implications of different time zonesfor global supply chain management systems?
A: The consequences of several time zones for international supply chain management systems are the…
Q: he global steel market has been historically plagued with overcapacity and slow growth. This has…
A: Promotion strategy is an aspect of the marketing department that deals with promoting goods or…
Q: Mode of Entry Analysis (Question 3)o Discussion of Yellowstone’s mode of entry strategy in Ukraine…
A: FEEL FREE TO ASK FOR CLARIFICATIONS
Q: Explain what the Global Investment Performance Standards (GIPS) are and carefully discuss three (3)…
A: The Global Investment Performance Standards (GIPS) are a set of standardized, industry-wide ethical…
Q: What has the company agreed to that decides to allow another small company in Kenya to use their…
A: a) Foreign direct investment: This is when a company or individual from one country makes an…
Q: Explain what is the Balance of Payments (BoP) and why is it important to International Marketing…
A: Balance of Payments (BoP) The difference between all money flowing into a country in a given period…
Q: a) b) "Trade policy uses seven main instruments." Source: Adapted from Global Business today:…
A: International trade covers both large and small firms engaged in business overseas. Possible drivers…
Question
Economic Transformation in Vietnam Vietnam is a country undergoing a transformation from a centrally planned socialist economy to a more market-oriented system. The transformation dates back to 1986, a decade after the end of the Vietnam War that united the north and the south of the country under communist rule. At the time, Vietnam was one of the poorest countries in the world. Per capita income stood at just $100 per person, poverty was endemic, price inflation exceeded 700% and the Communist Party exercised tight control over most forms of economic and political life. To compound matters. Vietnam struggled under a trade embargo imposed by the United States of America after the end of the Vietnam War. Recognising that central planning and government ownership of the means of production were not raising the population's living standards, in 1986, the Communist Party embarked upon the first of a series of reforms that transformed the economy a little bit Agricultural land was privatised and state farm collectives were dismantled resulting in a surge in farm productivity. Rules restricting the establishment of private enterprises were relaxed and some price controls were removed. State-owned enterprises were privatised. Barriers to foreign direct investments were lowered. Vietnam entered trade agreements with its neighbours. and joined the World Trade Organisation in 2007. Vietnam achieved annual economic growth rates of 7% after the reforms. Living standards have surged with GDP per capita on purchasing parity bases reaching $6,400 in 2016. The country is now a major exporter of textiles and agricultural products, with an expanding electronics sector. State-owned enterprises now only account for 40% of total output down from a near monopoly in 1985. Despite this progress, significant problems still exist in Vietnam. The country is too dependent upon exports of commodities, the prices of which can be very volatile. The state-owned enterprises are inefficient and burdened with high levels of debt. The Communist Party has maintained a tight grip on power and bans all political parties, labour unions and human rights organisations. The courts lack independence and are used as a political tool by the Communist Party to punish critics. There is no freedom of assembly or freedom of the press in Vietnam. Corruption is rampant in Vietnam. There is a well-established tradition of public officials favouring their families and friends. The privatisation processes provided the opportunity for government officials to appoint themselves and family members as executives of formerly state-owned companies. Many observers believe that widespread corruption has a negative impact on new business formation and is hamstringing economic growth. (Source: Adapted from Hill, C.W.L. & Hult, G.T.M., (2019), International Business: Competing in the Global Marketplace, 12th Edition, McGraw Hill Education) Qa Vietnam has been described in the case study as a Communist State. Explain the implication of Vietnam as a Communist State for foreign direct investment. b. C. d. Discuss the political, economic and legal costs of doing business in Vietnam for international businesses. Explain three types of risks that international businesses could face while doing business in Vietnam. Discuss three actions that the government of Vietnam could take to achieve economic transformation in order to attract foreign direct investment
expand button
Transcribed Image Text:Economic Transformation in Vietnam Vietnam is a country undergoing a transformation from a centrally planned socialist economy to a more market-oriented system. The transformation dates back to 1986, a decade after the end of the Vietnam War that united the north and the south of the country under communist rule. At the time, Vietnam was one of the poorest countries in the world. Per capita income stood at just $100 per person, poverty was endemic, price inflation exceeded 700% and the Communist Party exercised tight control over most forms of economic and political life. To compound matters. Vietnam struggled under a trade embargo imposed by the United States of America after the end of the Vietnam War. Recognising that central planning and government ownership of the means of production were not raising the population's living standards, in 1986, the Communist Party embarked upon the first of a series of reforms that transformed the economy a little bit Agricultural land was privatised and state farm collectives were dismantled resulting in a surge in farm productivity. Rules restricting the establishment of private enterprises were relaxed and some price controls were removed. State-owned enterprises were privatised. Barriers to foreign direct investments were lowered. Vietnam entered trade agreements with its neighbours. and joined the World Trade Organisation in 2007. Vietnam achieved annual economic growth rates of 7% after the reforms. Living standards have surged with GDP per capita on purchasing parity bases reaching $6,400 in 2016. The country is now a major exporter of textiles and agricultural products, with an expanding electronics sector. State-owned enterprises now only account for 40% of total output down from a near monopoly in 1985. Despite this progress, significant problems still exist in Vietnam. The country is too dependent upon exports of commodities, the prices of which can be very volatile. The state-owned enterprises are inefficient and burdened with high levels of debt. The Communist Party has maintained a tight grip on power and bans all political parties, labour unions and human rights organisations. The courts lack independence and are used as a political tool by the Communist Party to punish critics. There is no freedom of assembly or freedom of the press in Vietnam. Corruption is rampant in Vietnam. There is a well-established tradition of public officials favouring their families and friends. The privatisation processes provided the opportunity for government officials to appoint themselves and family members as executives of formerly state-owned companies. Many observers believe that widespread corruption has a negative impact on new business formation and is hamstringing economic growth. (Source: Adapted from Hill, C.W.L. & Hult, G.T.M., (2019), International Business: Competing in the Global Marketplace, 12th Edition, McGraw Hill Education) Qa Vietnam has been described in the case study as a Communist State. Explain the implication of Vietnam as a Communist State for foreign direct investment. b. C. d. Discuss the political, economic and legal costs of doing business in Vietnam for international businesses. Explain three types of risks that international businesses could face while doing business in Vietnam. Discuss three actions that the government of Vietnam could take to achieve economic transformation in order to attract foreign direct investment
Expert Solution
Check Mark
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
See solutionCheck out a sample Q&A here
Step 1: Introduce the case:
VIEW
Step 2: a) Outline Vietnam as a Communist State and Implications for Foreign Direct Investment (FDI):
VIEW
Step 3: b) Outline Political, Economic, and Legal Costs of Doing Business in Vietnam:
VIEW
Step 4: c) Types of Risks for International Businesses in Vietnam:
VIEW
Step 5: d) Actions for Vietnam's Government to Attract FDI and Achieve Economic Transformation:
VIEW
Solution
VIEW
bartleby

Step by stepSolved in 6 steps

See solution
Check out a sample Q&A here
Blurred answer
Knowledge Booster
Background pattern image
Similar questions
Recommended textbooks for you
Text book image
Understanding Business
Management
ISBN:9781259929434
Author:William Nickels
Publisher:McGraw-Hill Education
Text book image
Management (14th Edition)
Management
ISBN:9780134527604
Author:Stephen P. Robbins, Mary A. Coulter
Publisher:PEARSON
Text book image
Spreadsheet Modeling & Decision Analysis: A Pract...
Management
ISBN:9781305947412
Author:Cliff Ragsdale
Publisher:Cengage Learning
Text book image
Management Information Systems: Managing The Digi...
Management
ISBN:9780135191798
Author:Kenneth C. Laudon, Jane P. Laudon
Publisher:PEARSON
Text book image
Business Essentials (12th Edition) (What's New in...
Management
ISBN:9780134728391
Author:Ronald J. Ebert, Ricky W. Griffin
Publisher:PEARSON
Text book image
Fundamentals of Management (10th Edition)
Management
ISBN:9780134237473
Author:Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:PEARSON
SEE MORE TEXTBOOKS