Vietnam Currency Discussion Board

[RICK C]

ARTICLE from Dec 16 /07 USA TODAY-Worth reading.
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Change also bringing prosperity to Vietnam
Companies struggle to retain employees
By David J. Lynch
USA TODAY




VINH CUU, Vietnam -- The South Korean-owned factory, which produces millions of Nike athletic shoes every year, employs ceiling fans and an open-air design to keep its assembly lines comfortable in the heat.

Workers strolling between buildings on the manicured industrial campus wear pastel-hued polo shirts. Nearby, cheerful managers lead training sessions in air-conditioned rooms.

Yet, one of the biggest problems for Nike and its Korean partner is hanging onto employees. Every year, more than one out of five workers leave for another job in Vietnam's rapidly developing economy, where wages for some skilled positions are rising by double-digit annual percentages.

"Because people have so many more options, it's harder to retain people," says Shirley Justice, Nike's chief representative in Vietnam.

Now enjoying its third consecutive year of more than 8 percent annual growth, Vietnam is on its way to becoming the latest Asian nation to swap a history of colonial poverty for hard-earned prosperity. On bustling factory floors and crowded city streets, the Vietnamese are visibly leaving old ways behind and embracing the certainty of better days ahead.

Outsiders are noticing: Commerce Secretary Carlos Gutierrez last month brought executives to Vietnam from 22 U.S. companies, including Ford, Dow Chemical and 3M, to scout business prospects.

"Our relationship is growing very rapidly. But it could be a lot bigger, and it should be a lot bigger," Gutierrez says.

As Vietnam seeks to attract more U.S. investment, however, investors such as Nike are increasingly concerned about the country's ability to surmount looming bottlenecks. Chief among them: a shortage of skilled workers and woefully inadequate roads, ports and rail links.

Vietnam is a key link in Nike's global supply chain: Last year, the company based in Beaverton, Ore., shipped 75 million pairs of shoes from its Vietnamese suppliers and expects to ship 81 million pairs next year. Nike says its footwear and clothing orders keep 200,000 Vietnamese workers employed, so its views carry weight here.

Vietnamese officials recognize the need for action but regard the problems as the inevitable consequence of rapid -- and long overdue -- economic growth.

After Vietnam was forcibly unified by the communist North Vietnamese in 1975, it spent a decade mired in disastrous economic experiments that brought it to the brink of famine. In 1986, communist authorities launched "doi moi," a policy of market-based reforms, which seemed to mimic earlier Chinese market-friendly moves.

Like its northern neighbor, Vietnam is a one-party state whose leaders are more interested in economic change than in political liberalization.

Only in recent years has the economy begun to gather steam, averaging 7.8 percent annual growth from 2001 to 2006.

A young, well-educated population of enterprising workers and eager consumers is drawing the gaze of multinational corporations, long mesmerized by China's much larger market. Foreign direct investment exceeded $10 billion last year and is on pace to top $12 billion this year, thanks in part to Vietnam's joining the World Trade Organization in January.

Vietnamese officials say they are determined to avoid the excesses of Chinese-style reforms, such as a politically dangerous gap between rich and poor. But globalization isn't yet an epithet here.

At Pace Educator, a business school in Ho Chi Minh City, enrollment of about 7,000 midcareer students is up from 1,000 in 2001. Mercedes-driving Gu Tu Trung, 32, the company's chairman, says he provides Vietnam's budding chief executives the "global vision" they need to succeed.

"I tell them where we live is not Vietnam but the globe. And if you keep the old way of thinking, you can't survive," he says.

The capitalist transformation is molding the next generation. At Le Qui Don high school, one of Ho Chi Minh City's best, teachers overhauled the curriculum to encourage students to search for answers on their own rather than receive information passively, says principal Pham Van Phiet.

When a visiting journalist asks a classroom full of teenage students what they want to be when they grow up, one young man stands and confidently replies in English: "I want to be a businessman like Bill Gates."

In the capital, Hanoi, the target of fierce U.S. bombing raids in the 1970s, the streets are thick with noisy motorbikes. KFC outlets of Louisville's Yum! Brands draw enthusiastic crowds. Flat-screen television monitors tuned to the Bloomberg financial channel adorn sleek investment offices.

Since 1993, economic advances have slashed the share of the population living in poverty by almost two-thirds.

This summer, World Bank President Robert Zoellick on a visit to Hanoi hailed Vietnam for achieving "one of the fastest improvements in living standards in the world" and said the country was on course to join the ranks of middle-income nations, such as Brazil and Mexico, by 2010.

Despite breathtaking changes, Vietnam's economy is small. Total economic output of about $62 billion is roughly equal to U.S. retailer Target's annual revenue.

Foreign investors complain that the communist bureaucracy remains opaque and, at times, corrupt. Vietnam ranked 165th of 178 countries in investor protections, according to a recent World Bank survey.

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