Business in Vietnam
Binh Nguyen, the boy befriended by the Marines
during the war and profiled in “Vietnam Passage”
is all grown up. Now a highly placed executive
with FedEx Express, a subsidiary of the $20 billion
dollar FedEx Corporation, he serves as the Senior
Manager Indochina and Chief Vietnam Representative.
Binh fled his homeland on an evacuation flight
in 1975 with others frantic to escape advancing
North Vietnamese troops. He settled in the United
States with his wife Khoa and took a job as a
clerk with Federal Express. With his strong determination
and natural business acumen, Binh moved up the
corporate ladder. But even as he built a successful
career and family life in America, he felt the
persistent tug of his homeland. “Since I
joined FedEx in 1976, I’ve always wanted
to return to Vietnam and represent an American
company,” Binh says.
Binh first returned to visit Vietnam in 1989.
The trip made him more determined than ever to
see his dream to fruition. In 1992, he went back
to Vietnam, this time with a proposal in hand,
and met with Vietnamese officials. Even though
long-standing trade embargoes between the U.S.
and Vietnam blocked U.S. investment in Vietnam,
Binh never lost hope.
But even with his intimate knowledge of Vietnam
and Asian culture, Binh encountered obstacles
to setting up shop in Vietnam. “The negotiations
were not easy because, the Vietnamese did not
have a good grasp of what international agreements
looked like,” Binh explains, “[The FedEx]
contract was very thick and it took a long time
for them to digest it. We spent a lot of meetings
exchanging viewpoints. But we found them to be
very cooperative and also very eager to do business
with us, and as far as I know with other American
companies as well. I’m glad that I played
a small part in that.”
When the U.S. and Vietnam finally normalized
trade relations, FedEx was one of the first corporations
on the scene to take advantage of the new markets.
“I was keeping a close watch on what was
happening with the embargo. It was lifted on February
3rd, 1994 at 17:05 p.m. And on April 1st we opened
our office in Vietnam.”
The first year that the U.S. re-established diplomatic
relations with Vietnam more than $400 million
poured in from America. The country seemed poised
to garner a competive edge in world markets, and
many saw Vietnam as the next “Asian Tiger.”
But delays in making needed changes in Vietnamese
government procedures and adjusting to the fast-moving
pace of international businesses, caused some
investors to give up and go home. Then the bottom
fell out of the Asian economy in 1997, and by
1999, U.S. investment in Vietnam dropped to $119
million.
Even in light of such setbacks, Binh and others
stay focused on the big picture. “Many [U.S.]
companies have made significant investments in
Vietnam over the past six years to improve their
products and services in order to further contribute
to the economic development of Vietnam’”
he says. And as Binh points out, the country is
making a renewed effort to turn things around:
“The government of Vietnam is taking steps
to make this land more positive for foreign investors.”
In a speech to the U.S.-Vietnam Business Forum,
Binh emphasized the need for improved Internet
access and more efficient customs clearance procedures
to create better access to world markets and facilitate
trade between Vietnam and the world. He echoed
the sentiments of Prime Minister Phan Van Khai,
citing Vietnam’s need to develop strategies
and specific options to combine production with
markets, to become more competitive and not rely
on protective tariff barriers.”
Progress came in 2001 in the form of a Bilateral
Trade Agreement between the U.S. and Vietnam.
After years of negotiations back and forth, the
two nations finally signed the document, granting
reciprocal Most Favored Nation (MFN) status. The
agreement also promises to make Vietnam fully
competitive in the global economy by opening more
and more markets to eager investors.
While Vietnam may have some work to do on its
infrastructure, the country is fertile ground
for foreign investors – if they do their
homework. “I think Vietnam offers opportunities
for American businesses to operate in Vietnam
and make a profit. I think at the same time there
are risks involved in having a business in Vietnam,”
Binh cautions. “One may want to look at the
cost structure very carefully before one operates
here. A company may want to have the right person
representing that company in Vietnam - one who
can learn the legal framework and knows how to
relate to business leaders in Vietnam as well
as government leaders. The company has to have
the commitment to want to do well in Vietnam.”
The bottom-line to a healthy bottom-line? According
to Binh, it’s stamina. “You can’t
make a business go overnight here in Vietnam.
You’ve got to plan ahead and have a commitment
to stay.”
For More on doing business in Vietnam, check
out:
The U.S.-Vietnam Trade Council
http://www.usvtc.org
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