International Business Environment and Risk Analysis in Vietna

Report On International Business Environment and Risk Analysis in Vietnam By: ABC Date: Executive Summary: The FDI is inculcating in country, the firm value of foreign exchange and the business ethics convergence towards the business community are things that are alluring ion Vietnam economic sector. Vietnam and business community are two sides of the same coin that always pursuit for competitive corporate sector in country. It is known fact that foreign investors are looking for those nations that are still need saturation by doing business and other business related transactions effectively. There is no more hidden phenomenon that Vietnam needed such boasted business community as already present in other nations. There are benefits that need to exploit and opportunities need a timely actions in country. This time bounded strategies will pay back the foreign investors who are looking for benefits against doing business in country. The economic sector of the country is consistently endorsing the role of foreign direct investment. The encouragement of trade through balance of payment and balance of trade is very glaring in the economic sector of country. TOC \o "1-3" \h \z \u Executive Summary: PAGEREF _Toc417039972 \h 2Introduction: PAGEREF _Toc417039973 \h 4Country Context PAGEREF _Toc417039974 \h 7Political System PAGEREF _Toc417039975 \h 7Legal System PAGEREF _Toc417039976 \h 8Civil Legal System-socialist legal theory PAGEREF _Toc417039977 \h 8Economic System PAGEREF _Toc417039978 \h 9Macro and Institutional Factors PAGEREF _Toc417039979 \h 9Economy PAGEREF _Toc417039980 \h 9Gross Domestic Product PAGEREF _Toc417039981 \h 9Global Competitiveness Index (GCI) PAGEREF _Toc417039982 \h 10Macro Level Political and Social Context PAGEREF _Toc417039983 \h 11Media Freedom PAGEREF _Toc417039984 \h 11Private Property Rights Protection PAGEREF _Toc417039985 \h 11Product Market PAGEREF _Toc417039986 \h 13Labor Market PAGEREF _Toc417039987 \h 14Capital Market PAGEREF _Toc417039988 \h 15Cultural Context PAGEREF _Toc417039989 \h 16Hofstede Model PAGEREF _Toc417039990 \h 16Ethics and CSR PAGEREF _Toc417039991 \h 18International Trade PAGEREF _Toc417039992 \h 19Foreign Direct Investment PAGEREF _Toc417039993 \h 19Foreign Exchange PAGEREF _Toc417039994 \h 19Recommendation and Conclusion PAGEREF _Toc417039995 \h 19References PAGEREF _Toc417039996 \h 20 Introduction:Vietnam is located in Asia, constitutes importance in history, and still gets the media attention, because of its creativeness in all fields generally, but in business specifically. Its location is about 21°2'N105°51'E and the capital is Hanoi. The largest city of the country is Ho Chi Minh City and constitutes major importance in business commu9nit, trade relations and other infrastructure goods in community for the people of Vietnam. About 3000 km coastline is along with the South China Sea. This creative and extra ordinary location of Vietnam is creating a difference of Vietnam from other countries. Vietnam constitutes single part republic with socialist mindset. The 4-year term is followed over there. The title of top travel destination of Asia is attached with the Vietnam because about more than 6 million people visited it every year. The literacy rate of Vietnam is 94% that is highest even Vietnam is exiting in developing countries list. The distinctive point of Vietnam is the export of Cashews in the world and holds the second exporter title against rice. Source: http://www.mapsofworld.com/vietnam/ The people of Vietnam always prefer to use fresh ingredients therefore the food over there is considered as healthiest one. Geographic Region Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, as well as China, Laos, and Cambodia. Coordinates 16 10 N, 107 50 E Area Total: 331,210 sq km Land: 310,070 sq km Water: 21,140 sq km Climate Tropical in south; monsoonal in north with hot, rainy season (May to September) and warm, dry season (October to March) Source: CITATION cia14 \l 1033 (cia.gov, 2014)Demographic Population 93,421,835 (July 2014 est.) Ethnic Group Kinh (Viet) 85.7%, Tay 1.9%, Thai 1.8%, Muong 1.5%, Khmer 1.5%, Mong 1.2%, Nung 1.1%, others 5.3% (1999 census) Languages Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and Khmer, mountain area languages (Mon-Khmer and Malayo-Polynesian) Religions Buddhist 9.3%, Catholic 6.7%, Hoa Hao 1.5%, Cao Dai 1.1%, Protestant 0.5%, Muslim 0.1%, none 80.8% (1999 census) Age Structure 0-14 years: 24.3% (male 11,946,656/female 10,800,602) 15-24 years: 17.8% (male 8,598,360/female 8,023,377) 25-54 years: 44.8% (male 20,983,638/female 20,861,243) 55-64 years: 5.7% (male 3,149,494/female 3,763,309) 65 years and over: 5.6% (male 2,034,721/female 3,260,435) (2014 est.) Source: CITATION cia14 \l 1033 (cia.gov, 2014)Country ContextPolitical SystemThe political system is not so complex because it is single part socialist country and country constitutes historical roots up to great extent. Country did not bear the external interference regarding human rights centered mindset. Vietnam was very popular in history because of its political decisions that come with the political stability maxim that is very appealing against the political policies off capitalist societies. CITATION cia14 \l 1033 (cia.gov, 2014) The wholly responsible National assembly of Vietnam constitutes makes up of 500 members and these all members are elected through popular vote. The 4-year terms has been following by political parties on actual grounds. The start of 4-year term also initiates immediate call for presidential election. The commander-in-chief of the armed forces seat is also reserved at thee president level as well. There are many calls at international level; so that Vietnam could improve human rights consideration and the whole framework directly and indirectly attach with it. Such moves and activities at international platform not bound to get effect in the country. CITATION htt15 \l 1033 (vietnamembassy-usa.org, 2015)Legal SystemAccording to W.Neil Adger’ research paper, the whole maxim is there at humanitarian basis and legal rights are protected with the rules and conducts of companies. There are Institutions and culture in Vietnam that endorse the uses of such legal framework that is very glaring in conducts and activities across the country. CITATION cia14 \l 1033 (cia.gov, 2014) Individuals’ decision-making through this legal framework is a typical element that has been formulated around rules and regulations. The individuals and individualistic society as Vietnam is constitutes such framework that gives right to individuals more than groups. CITATION Adg00 \l 1033 (Adger, 2000) The vulnerabilities are showing procedural changing in framing laws and regulations against new vulnerabilities. According to Vietnam, specifically there are civil law systems and the best form of rules and regulations against those norms presented over there that showed that the country is also issuing some punishment notices against the law. The law is very glaring in legal framework of the country. Legalities are there and these legal frameworks over there are highly centralized with the vulnerabilities facing by Vietnam generally but specifically on water resources. CITATION Adg00 \l 1033 (Adger, 2000)Civil Legal System-socialist legal theory As the matter of fact, the legal system of Vietnam is based upon the socialites system and socialist thinking of legalities at more advance level. The civil law system that was come out from the French legal system but after some modification it is still applied over there. The law codes is also root under the European-style civil law code for the immediate decision making and most rigid one implication of codes and conducts. CITATION Sha143 \l 1033 (Shaw, 2014) The judicial decisions and jurisprudence is not there to support for the law creation as well. All law making activities are undergo with the national assembly directions and law formulation done with the consideration of extra sanctions with those laws as well. CITATION Sha143 \l 1033 (Shaw, 2014)Economic SystemThere are three economic-influenced factors are there in Vietnam. The first factor is the understanding of transition in economy. The transition at economic paradigm showed that the influence of environment and environmental changes in procedural settings. The environmental management is also a major factor behind the activities of economy and economic-centered issues as well. (Adger, 2000) There are greater insights found in these factors that directly and indirectly affect business and corporate sector in Vietnam. The rapid market liberation in economic sector is also an alluring factor for the business. The other thing is the privatization in Vietnam and nature of institutional adoptions are key points that can construct the overview about business review in Vietnam. The best thing that showed in timeline efforts of Vietnam in economy is the fact of stability. The stable economy even during and after the Asian economies crises in 1997 is the best thing to invest despite many risks. (Adger, 2000)Macro and Institutional Factors EconomyGross Domestic Product The economy of Vietnam is very glaring is East Asian countries and there is lots of dynamic situations has come and go but the fact is the economic sector Vietnam did not show any dynamic situation as such and transition continued. The worst thing in examining the economic paradigm at vast level is the already inculcated perception about the vulnerabilities and sometime wrong direction while perceiving it wrong. Many scholars and economic thinkers perceive the social vulnerabilities in Vietnam more than the physical and most other facilities in history and same in contemporary economic situation. Vietnam is title under the developing country and East Asian and Pacific economy is highly concentrated in the country. The current GDP rate is $171.4 billion and it is continued its struggle under the lower middle-income country as per detailed said. Annual GDP rate is showing consistent growing year by year as per graphs show. The East Asia and Pacific as the region and Vietnam as the country showed the same dynamics at broadly perspective. Sources:http://www.worldbank.org/en/publication/global-economic-prospects/data?region=EAP Global Competitiveness Index (GCI)According to data of world economic forum, Vietnam constitutes 68 positions among 144 countries with the value of 4.2. These figures showed that East and pacific Asia is having such economy that is enough to gain foreign direct investment without any delay. (reports.weforum.org, 2015)Macro Level Political and Social ContextMedia FreedomAccording To Press Freedom Index (2015), Vietnam showed the decline in Media freedom and least attention towards the freedom of expression by different departments of government as well. The detailed showed that the freedom of media index was 174 among 180 countries of the world but the recent figures showed that the country still did not allowed the media to do their activities freely and the index declined further. The current Media freedom index is 175 and the score is only 72.63 that are no good for building international democratic relation upon the freedom of expression base. (index.rsf.org, 2015) The overall scope of the media freedom also lower as compare to previous year 2014 and the .027 score decline observed this year. The current score is 72.63 that were 72.36 in previous year. The abuses score is 74.89 that is not far away from the current showing figures of the same monopoly of government still there. On media continue. Historically speaking, the circumstance of the media freedom is almost unchanged in the same manner since 2002 when Vietnam constitutes 131 positions from 134 countries. (index.rsf.org, 2015)Private Property Rights ProtectionIt is known fact that Vietnam, located in Southeast Asia and neighbor with Laos, Cambodia and china. These mentioned neighbors are economic and showed some relaxation towards the property rights and protection ways in different aspects. The majority Vietnamese are living in rural areas and almost all are working in agriculture. Therefore, population is living in Vietnam generally but specifically in rural areas constitutes major part of labor market in the country. The density of population is very high because the major land is covered with the widening population with the double speed than the resources of the country. (usaidlandtenure.net, 2015) Among the whole land area, as compared to other land figures, as discussed above, the land that has been used for the agricultural purpose for long. One-third land usage for Agriculture showed the green environment in excellent land utilization. Complete administers who are serving the Vietnam did not constitutes any land and just utilize the land of population. One can say that population constitutes the ownership of land. The land is equally owned by males and females as well and Vietnam believed in gender equality at land acquisition process. Practically, women did not allow obtaining such land certificates as men have. (usaidlandtenure.net, 2015) All land is belong to government and this acquisition of land owned by the government is the source of conflict and one can say the social conflict is mainly caused to this acquisition in Vietnam. However, the 2012 is the year that is very glaring in acquisition of land and national assembly implement law. There are enough resources of water, forest and other minerals with respect to population but soon the decline has arrived and water pollution and fast depletion in natural resources at the land observed over there. (usaidlandtenure.net, 2015) According to International Property Rights Index 2014, Viet Nam constitutes 66 as global rank from 97countries and 13 Rank regionally in South East Asian Countries from 16 countries. (Internationalpropertyrightsindex.org, 2014) The recent slightly change in figure observed by the many observes of the country and world forums as well. IPRI improvement showed that the national assembly’s land acquisition law of 2012 is working effectively. There is less social conflict as well according to details as shown by index and perception can formulate easily. (Internationalpropertyrightsindex.org, 2014)Product MarketThe data showed below contained the conclusive statement maxim that Vietnam is facing lowering consumption because of lower income country. There are three stages in developing the product market at any country and Vietnam constitutes such three elements in developing the linkage between these three aspects. The first aspect in evaluating the product market is the income-centered platform. The second aspect is the expenditure-centered platform and the third is the consumption-centered indicator that showed that the population of Vietnam is observing the changes in their daily life, economically, due to these changes. The product market in Vietnam is showing very restrictive data because of many factors are there in front of the product market. (gso.gov.vn, 2015) For example, this middle-income country needs a fortification programs. These programs will negate the political intervention that is main cause in disrupting the mechanism of household in country. Further such programs were only formulated in history but still these programs need a proper implementation for the mass rather than individuals over there. The technical obstacles are also affecting the product market and the main causes of the lower manufacturing of household products are because of this fact. (gso.gov.vn, 2015)The information go between the household market and other indirectly attached departments in the country showed the non-integrated chain between them and thus affects the public adversely. The completely absence of food consumption data after the detailed survey presents another alarming situation in reality. Overall speaking about the income in product market, the income is mostly coming from the salaray, wage sector, and constitute major importance. The next sector is the agriculture sector that is the main source of income because mostly people are living in the rural areas. Then forestry, Fishery Industry, construction, trade and services come that are glaring in country and contribute a lot toward the income penetration in economic sector of Vietnam. These sectors showed the reality based information about the household, income, consumption and expenditure. (gso.gov.vn, 2015)Labor MarketVietnam is showing some positives in labor market and labor force is successfully endorsing the agenda of Vietnam and its economy department. The labor force is increased from previous year. Source: http://www.gso.gov.vn/Modules/Doc_Download.aspx?DocID=16932 The labor market is glaring in development and the developing countries are showing some transition in labor-market enhancement technique. The labor Market of Vietnam is also among them. The recent data that has buzzed officially from official sources showed that 273 thousands labor force has been increased and according to such big change, about 77.5% participation rate has been observed recently. (gso.gov.vn, 2015)The employment expanded by 436 thousands and the concentration of job in there at Industry sector and construction sector in urban areas. The shift has been observed and 0.83% shift in change is there at biggest level that is also glaring in developing the major labor market in country. The underemployment rate decreased and this gradual slowing rate show that the labor market will be enough to feed for next level generation independently. (gso.gov.vn, 2015) Similarly, the rate cut in unemployment showed some signals in labor market about the expansion and exploration of labor market in different aspects. Capital MarketThe capital market is showing the positive figures about the data that has been collected for the sake of research. The lower inflation endorses the strong economy. The strong external trade with the bilateral relationship with other countries again endorses the strong economy. Lastly, and most importantly, the stable capital market is another myth that has been alluring in developing the economy that did not constitutes by other countries in the same region up until now. (komora.cz , 2015) Above-mentioned Factors showed that macroeconomic stability is no more challenge in Vietnam. According to data collected in 2013 by European Union, it showed that the project acquisition in the Vietnam is increasing day by day and these projects are showing the highest return of profit for those countries that invested in the country recently. (komora.cz , 2015) Source: http://hnx.vn/en/web/guest/home Cultural ContextHofstede ModelPower Distance The dimensionally discourse analysis said a sad story about the Vietnam that it did not endorse the individuals in societies in any aspect. The inequalities are much proved as the Vietnam culture comes in debate. The power distance in society is the more glaring with the rise of society and individuals that are highly negated. (geert-hofstede.com, 2015)Individualism There is a minimum level degree of independence among other but the investment supports he society at vast level n Vietnam. The individualism is not deal with the actual meanings over there. (geert-hofstede.com, 2015)Masculinity The competition driven society is the dimension that is glaring in the society and very essential for the positivity and negativity aspects over there. (geert-hofstede.com, 2015)Uncertainty Avoidance The government is introducing such laws and regulations that are actually bounded with the realities of the uncertainties that can come under these circumstances of the market where the whole market is showing side by side enhancement at all levels. (geert-hofstede.com, 2015)Unknown Situations There is proper channel over there in Vietnam that showed the situations based issues and the way to avoid it. (geert-hofstede.com, 2015)Long Term Orientation The orientation at bigger level is the most inculcated paradigm at major level. (geert-hofstede.com, 2015)Indulgence However, the indulgence is not suited and still need revamped strategy. (geert-hofstede.com, 2015) Source: http://geert-hofstede.com/vietnam.html Ethics and CSRThere are two regulatory bodies over there that who thee CSR and business ethics over there. The first body is the COCs and social standards in Vietnam. The Corporate social responsibility (CSR) is the responsibility of these two firms to monitor in the business culture. According to organization, the CSR is depends upon Philanthropy customer-driven and Certification-led in Vietnam. The CSR is inculcated among companies at Vietnam at the time when the Vietnam’s Ministry of Labor, invalids & social Affairs comes in action. (adbi.org, 2015)International TradeThe trade statistics are positive now a day as per the data said. The export data showed that turnover of Vietnam estimated for 12.4 billion of USD (Sep, 2014) and these figures comes from crude oil, sea food, electronics and other alive industries. (komora.cz , 2015) The import increase is there at the same level. (komora.cz , 2015)Foreign Direct Investment The FDI rate reached US$ 9.53 billion and about te 19.9 %^ down than the previous details of the same period. (komora.cz , 2015)Foreign ExchangeDue to listed things, high import, and export the foreign exchange is firm up until now (komora.cz , 2015). All data mentioned above showed the strongest aspect of foreign exchange with in no time. Recommendation and ConclusionVietnam is the dominated agricultural country and the country is very glaring in getting maximum agricultural-related activities at same time. The two-third of the workforce comes from the agriculture sector and the sector is showing the centralized planning of economy. The modernization of economy and knowledge based culture in Vietnam show the positive sign to get the FDI at maximum level. References BIBLIOGRAPHY \l 1033 adbi.org. (2015). Currebt Status of CSR in Vietnam. Retrieved April 17, 2015, from http://www.adbi.org/files/session1_05_nguyen_q_vinh.pdf Adger, W. N. (2000). Institutional Adaptation top Environmental Risk under the Transition in Vietnam. Annuals of the Association of American Geographers , 90 (4), 738-758. cia.gov. (2014). The World Factbook. Retrieved April 15, 2015, from https://www.cia.gov/library/publications/the-world-factbook/geos/print/country/countrypdf_vm.pdf geert-hofstede.com. (2015). What about Vietnam? Retrieved April 17, 2015, from http://geert-hofstede.com/vietnam.html gso.gov.vn. (2015). Data results of the Viet Nam Household Living Standards Survey. Retrieved April 17, 2015, from http://www.gso.gov.vn/default_en.aspx?tabid=515&idmid=5&ItemID=13971 gso.gov.vn. (2015). Labor Market Survey . Retrieved April 17, 2015, from http://www.gso.gov.vn/Modules/Doc_Download.aspx?DocID=16932 index.rsf.org. (2015). 2015 World Press Freedom Index. Retrieved April 17, 2015, from https://index.rsf.org/#!/index-details/VNM Internationalpropertyrightsindex.org. (2014). The International Property Rights Index 2014 Viet Nam . Retrieved April 17, 2015, from http://internationalpropertyrightsindex.org/country?c=Viet+Nam komora.cz . (2015). VIETNAM ECONOMY. Retrieved April 17, 2015, from http://www.komora.cz/download.aspx?dontparse=true&FileID=13996 reports.weforum.org. (2015). Vietnam. Retrieved April 17, 2015, from http://reports.weforum.org/global-competitiveness-report-2014-2015/economies/#economy=VNM Shaw, E. (2014). How to qualify as a lawyer in Vietnam. Retrieved April 15, 2015, from http://www.ibanet.org/PPID/Constituent/Student_Committee/qualify_lawyer_Vietnam.aspx usaidlandtenure.net. (2015). USAID COUNTRY PROFILE PROPERTY RIGHTS AND RESOURCE GOVERNANCE. Retrieved April 17, 2015, from http://usaidlandtenure.net/sites/default/files/country-profiles/full-reports/USAID_Land_Tenure_Vietnam_Profile.pdf vietnamembassy-usa.org. (2015). CONSTITUTION AND POLITICAL SYSTEM. Retrieved April 15, 2015, from http://www.hrw.org/world-report/2014/country-chapters/vietnam

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