IDCA News
All IDCA News19 Jul 2024
Death of Vietnam's Leader Nguyen Phu Trong Offers a Look at His Tech Legacy
The death of 80-year-old Nguyen Phu Trong, general secretary of Vietnam’s ruling Communist Party , brings an era of rapid tech development and socioeconomic progress to a close. Nguyen had served in this role, which made him the supreme authority in this land, since 2011, following a long career in the country's Communist Party and the shifting vagaries of Vietnamese politics.
Nguyen launched a vigorous anti-corruption campaign known in English as “blazing furnaces,” which purged large numbers of government officials at all levels. His successor, To Lam, was one of the few to remain. Now it is up to him to continue (or not) Nguyen's development efforts.
IDCA Research Highlights Vietnam's Progress
Vietnam's recent progress is illustrated clearly in the IDCA Digital Readiness Index. The country ranks third within the ASEAN region, with an overall score of 50 on a 100-point scale, trailing only Malaysia and Singapore. Its overall score is above the world's average. Its tech development score of 78 is well above the world average and trails only Malaysia with ASEAN. Its social and governance scores are mediocre, at the world average, but comparable to ASEAN outside of Malaysia and Singapore.
Pure economic growth guided by Nguyen's government has enabled its per-person income to sail past the Philippines in recent years. It is now approaching Indonesia in that area, with Thailand also in sight. Vietnam's tech-development pace has been one of the highest in the world over the past decade. According to IDCA Research, the country may indeed be a little too dynamic, with the potential for social disruption that rapid expansion can bring.
Is Its Setting Too Fast a Pace?
In the IDCA “Goldilocks” Index, Vietnam's pace has been recorded as “too hot” for several years, although there is no correlating data to say unequivocally that disruption is coming. On a related note, Vietnam's bond rating is undervalued compared to the pace of its tech development and the expected continued economic improvement that development augurs. The rating is dampened by the reality that a Communist government is highly secretive and an impediment to many investors' interest.
Vietnam has strong, if not overwhelmingly so, submarine cable connectivity in its distinct northern and southern regions, anchored respectively by Ha Noi and Ho Chi Minh City (former Saigon). Data center development continues apace in those regions, as well as in Central Vietnam's city of Quy Nhon in Minh Dinh Province. The nation's current data center footprint requires less than 1% of its electricity grid, leaving ample room for continued development.
Renewable Grid Relatively Strong
Vietnam receives 46% of its electricity from renewal resources, slightly ahead of Malaysia and well ahead of the world average and other large countries within ASEAN. Its overall electricity production is more than double that of Philippines and Indonesia on a per-person basis, and is approaching that of Malaysia.
The nation's traffic and a focus on building a manufacturing base in recent years has produced the dirtiest, most inefficient level of CO2 and related omissions, within ASEAN. Its emissions output relative to its economy is almost four times that of Malaysia, twice that of the world average, and 50% more than the highly inefficient economies of Indonesia and Thailand.
Vietnam's Prospects
Vietnam's rapid, startling progress under Nguyen's leadership has made it one of the better tech-development prospects in all of Asia. Its overall Digital Readiness score positions it fourth among the leaders of 40 Frontier Markets that IDCA identifies, ahead even of India.
The leaders who follow Nguyen have a significant challenge to improve the nation's economy further, to clean up its air quality, and to maintain monopolistic power while also encouraging investment and development from the world outside its borders.
Follow us on social media: