Huey Truong · Former Civil Engineer/entrepreneur Upvoted by David Wood, lives in The Philippines (2017-present) Updated 4y
I think both country has its own problems to deal with in order to growth.
If you look at Philippines economy easy to see why Philippines falling behind Vietnam. The starting point between the two were miles away when Vietnam was a poorest country after 70 while Philippines was already a star, but then it took Vietnam about 25 years to surpassed Philippines and during that period, Vietnam focus on one thing create a enviroment that could attract FDI and help the local to start standing on its feet once these FDIs leave.
During that time Vietnam export increase every year and now Vietnam export value over close to $300 billion dollars as of 2020 while Philippines export little over $70 billion dollar. What this mean is that Vietnam produce more valuable products to export, this will help Vietnam to lower its unemployment rate while helping Vietnamese workers sharpen their skill.
Vietnam government wanted to make sure Vietnamese companies can one day stand on its feet, becoming a global player as example of Vingroup conglomerate, Viettel or Thaco.. etc
Beside that Vietnam government have created an enviroment to attract skilled workers or Vietnamese scientis from abroad to come back to help Vietnam. Vietnam wants to stop brain-drain while Philippines export skilled workers to help reduce unemployment rate.
Vietnam invest on infrastructure to help attract FDI and improving logistic while Philippines invest on infrastructure to help improving GDP and reduce unemployment this is two different things. Vietnam invests to attract more FDIs and improve logistic all these investments is to help Vietnam become a manfucturer, and hope some day become a global player and not relying on services.
If you look at Philippines, services is a big part of GDP, this is not good it’s like building a foundation on loose sand. Another big portion of Philippines GDP coming from Filipino living abroad called remittance. This could help Philippines GDP but again this won’t be good for Philippines in long term. In order to grow and move to higher income Philippines need to produce more products to export b4 transitioning to services economy. That is what most of developing countries have done for the last century. US used to be a manufacturer and so did European then Japan, Korea, Taiwan and China. All these countries had gone thru that order. Vietnam want to follow that path too.
CVD 