Vietnam has had a colourful political history (Sterling, 2006) and is currently renowned for its communist leadership.
However, when you examine the policies of the current government it could be argued that Vietnam is communist in name
only.1An example of this being its policy for International Trade – Vietnam has a very receptive attitude towards welcoming
FDI and developing Trade relations which contradicts the whole Communist ethos, the government is committed to
improving the country‟s business and investment climate.
In 1986 Vietnam introduced Doi Moi („economic renovation‟) the key aim of this policy was to open Vietnam to foreign
investment. Vietnam became the 150th member of the World Trade organisation on January 11th 2007. 2
Vietnam has not recently faced any serious threat to its powers and the situation is expected to remain the same in the
coming years (Data Monitor 2009). Vietnam‟s head of state is the President who does not have any administrative powers;
however he undertakes the roles of nominal commander of the armed forces and chairman of the Council on National
Defense and Security. The Vietnamese Prime Minister holds the administrative powers and also heads a cabinet made up of
three deputies and the heads of 26 ministries and commissions.
Potential Impact
Any organisation wishing to enter the market must take cognisance of the fact that there are considerable limits on political
activities and free speech. A large police and military presence is common. While it is not seen as a major risk in the case of
Vietnam suggestions as to reducing political risk include using local partners, making operations invaluable (ensuring
indispensability), localised banking and minimising fixed investments (Jeannet and Hennessey, 2004).
Vietnam has had a colourful political history (Sterling, 2006) and is currently renowned for its communist leadership.However, when you examine the policies of the current government it could be argued that Vietnam is communist in nameonly.1An example of this being its policy for International Trade – Vietnam has a very receptive attitude towards welcomingFDI and developing Trade relations which contradicts the whole Communist ethos, the government is committed toimproving the country‟s business and investment climate.In 1986 Vietnam introduced Doi Moi („economic renovation‟) the key aim of this policy was to open Vietnam to foreigninvestment. Vietnam became the 150th member of the World Trade organisation on January 11th 2007. 2Vietnam has not recently faced any serious threat to its powers and the situation is expected to remain the same in thecoming years (Data Monitor 2009). Vietnam‟s head of state is the President who does not have any administrative powers;however he undertakes the roles of nominal commander of the armed forces and chairman of the Council on NationalDefense and Security. The Vietnamese Prime Minister holds the administrative powers and also heads a cabinet made up ofthree deputies and the heads of 26 ministries and commissions.Potential ImpactAny organisation wishing to enter the market must take cognisance of the fact that there are considerable limits on politicalactivities and free speech. A large police and military presence is common. While it is not seen as a major risk in the case of
Vietnam suggestions as to reducing political risk include using local partners, making operations invaluable (ensuring
indispensability), localised banking and minimising fixed investments (Jeannet and Hennessey, 2004).
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