Vietnam, with a total population of 91,519,289 as of July 2012, is located in Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and the South China Sea, as well as China, Laos, and Cambodia. The country mostly has a tropical climate and it covers a total area of 331,210 km2.
|The national flag of Vietnam.
Image Credit: CIA Factbook
Vietnam gained independence after World War II and was later divided into the anti-Communist South and the Communist North. For almost 10 years, the country experienced slow economic growth because of the persecution and mass exodus of individuals and conservative leadership policies. Vietnam thus had to recover from an unstable economy, the loss of financial support from the old Soviet Bloc, and the devastations of war.
With the introduction of Vietnam's "doi moi" (renovation) policy in 1986, the country shifted its focus on increasing economic liberalization and developing structural reforms to increase the number of export industries and modernize the economy.
In 2009, Vietnam’s economy was hit by the global recession and in 2011 the country’s exports increased by more than 33% and foreign investments amounted to nearly $8 billion in 2011. The country’s GDP as of 2011 was $303.8 billion.
Overview of Resources
The key natural resources of Vietnam include coal, bauxite, manganese, and offshore gas and oil deposits.
In 2009, the production of aluminum increased by 13% and in 2010 the market value of this commodity in the London Metal Exchange was US$2,278/t.
In 2010, Vietnam was the eighth largest producer of crude petroleum in the Asia and Pacific region. In the same year, the country’s global production of tin was 2% and that of cement and barite was 1.5% and 1.1%, respectively.
Vietnam’s mineral trade in 2010 increased by about 23.6% to $157 billion from $127 billion in 2009.
Vietnam owns the world's third-largest bauxite ore reserves of 5.4 billion t in the Central Highlands. According to a research study, Vietnam is said to have an increasing amount of bauxite and hence the country proves itself suitable for building an alumina-refining industry.
The map of Vietnam. Image Credit: CIA Factbook
Recent reports state that Vietnam has decided to proceed with its new bauxite project as part of measures to uplift the country’s economic status. Vinacomin, a mining company in Vietnam, decided to develop two bauxite mines, one in Tan Rai in neighboring Lam Dong province and the other in the central Dak Nong province. The operation of the central Dak Nong province mine is expected to commence by late 2012.
Though these bauxite projects aim at bringing in good revenue, a few experts feel that these projects pose danger to the environment. In an attempt to solve this issue, the government decided to reconsider the continuation of these bauxite projects by analyzing the environmental issues relating to these projects.
Recent mining news highlights that Vietnam is currently issuing an increasing number of licenses for the development of many mining projects in the country. Experts feel that the increase in mining projects will only damage the environment and lead to wastage of resources. The government has thus been urged to tighten licensing of mining activities in the country by issuing licenses only to those investors willing to process resources instead of selling them raw.
Vietnam also introduced a “three pillar” economic reform program in 2012. This program is aimed at restructuring state-owned enterprises, the banking sector and public investments. This program was introduced because of the country’s ailing economy that still faces challenges from high borrowing costs, low foreign exchange reserves, and an undercapitalized banking sector.
The country’s economic status will thus likely see an improvement in the future based on proper implementation of the “three pillar” economic reform program and solving of issue related to various mining activities.
Disclaimer: The author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.
Sources and Further Reading