AS IT IS 2016-02-06 Old Age, Debt Threaten Vietnam Economy

AS IT IS 2016-02-06 Old Age, Debt Threaten Vietnam Economy

Vietnam’s population is growing old at the fastest rate of any nation in recorded history.

In about 15 years, Vietnam’s share of people aged¹ 65 years or older will rise from 7 to 14 percent of the population. This information comes from the World Bank. By comparison, the aging process will take longer, about 25 years, in two nearby countries: China and Myanmar.

World Bank Vietnam director Victoria Kwakwa says the aging of Vietnam’s population will strain the workforce². She said, “What you’re going to see is a slowing down, beginning to slow down and ultimately shrinking of the labor³ force, which will make significant demands on labor productivity.”

She spoke⁴ at a Canadian Chamber⁵ of Commerce event last week in Ho Chi Minh City.

Low-cost labor has powered businesses in Vietnam. It is the only country in East Asia where economic growth was higher in 2015 than 2014, said Kwakwa.

Graying workforce

But the aging workforce threatens that growth and adds to a list of issues that Vietnam faces.

High debt, low government reserves, and dependence⁶ on foreign investment are some of the risks to the economy. Other risks include the increase in U.S. interest rates, the drop in prices for commodities, and questions about how the Trans Pacific Partnership⁷ (TPP) trade deal will affect Vietnam. The TPP cuts 18,000 tariffs⁹ among the 12 participating countries.

For many years, Vietnam has been a country of savers. But now it is experiencing growing levels of household debt.

Ralf Matthaes is managing director of Infocus Mekong Research, a market research firm. He said he was very surprised when his business found that 30 percent of Vietnamese consumers took out a loan in 2015.

“Vietnam is becoming a debt culture, which is a little bit like China and some other places,” he said. “So this is, I think, the one thing that I would worry about in the future.”

Public debt is on the rise, too. The Vietnamese government set a debt limit of 65 percent of Gross Domestic Product. The World Bank estimates borrowing reached 62.5 percent of GDP last year, up from 59.6 percent in 2014.

Outlook for Vietnam-China relations   

Many countries are worried about how China’s economic problems could hurt them. Vietnam could be spared much of the impact. Its exports to China are only about half of what Vietnam exports to Europe or the United States, according to the General Statistics Office.

Fred Burke is managing partner at the law office Baker¹⁰ & McKenzie. He suggested Vietnam consider how it can profit from China.

“Chinese companies with good experience as residential¹¹ real estate developers coming in and building projects here, you know, that’s the kind of investment Vietnam actually needs, because they’ve got appropriate technology,” he said. “The price point is right. There’s a lot actually China and Vietnam can do together.”

This advice may not be followed. Vietnamese relations with China have worsened recently over territorial¹² disputes in the South China Sea. But that has not stopped Vietnam from buying more products from China than from any other trading partner.

Words in This Story

strain – n. to cause problems or trouble for (something)

reserve– n.  a supply of something that is stored so that it can be used at a later time

tariff⁸ – n. a tax on goods coming into or leaving a country

consumer – n. a person who buys goods and services

Gross Domestic Product (GDP) – noun phrase the total value of the goods and services produced by the people of a nation during a year not including the value of income earned in foreign countries 

impact – n. a powerful or major influence or effect

residential – adj. containing mostly homes instead of stores or businesses

real estate – n.  property consisting of buildings and land

1 aged   

adj.年老的，陈年的

参考例句：

• He had put on weight and aged a little.他胖了，也老点了。
• He is aged,but his memory is still good.他已年老，然而记忆力还好。

2 workforce   

n.劳动大军，劳动力

参考例句：

• A large part of the workforce is employed in agriculture.劳动人口中一大部分受雇于农业。
• A quarter of the local workforce is unemployed.本地劳动力中有四分之一失业。

3 labor   

n.劳动，努力，工作，劳工；分娩；vi.劳动，努力，苦干；vt.详细分析；麻烦

参考例句：

• We are never late in satisfying him for his labor.我们从不延误付给他劳动报酬。
• He was completely spent after two weeks of hard labor.艰苦劳动两周后，他已经疲惫不堪了。

4 spoke   

n.（车轮的）辐条；轮辐；破坏某人的计划；阻挠某人的行动 v.讲，谈（speak的过去式）；说；演说；从某种观点来说

参考例句：

• They sourced the spoke nuts from our company.他们的轮辐螺帽是从我们公司获得的。
• The spokes of a wheel are the bars that connect the outer ring to the centre.辐条是轮子上连接外圈与中心的条棒。

5 chamber   

n.房间，寝室；会议厅；议院；会所

参考例句：

• For many,the dentist's surgery remains a torture chamber.对许多人来说，牙医的治疗室一直是间受刑室。
• The chamber was ablaze with light.会议厅里灯火辉煌。

6 dependence   

n.依靠，依赖；信任，信赖；隶属

参考例句：

• Doctors keep trying to break her dependence of the drug.医生们尽力使她戒除毒瘾。
• He was freed from financial dependence on his parents.他在经济上摆脱了对父母的依赖。

7 partnership   

n.合作关系，伙伴关系

参考例句：

• The company has gone into partnership with Swiss Bank Corporation.这家公司已经和瑞士银行公司建立合作关系。
• Martin has taken him into general partnership in his company.马丁已让他成为公司的普通合伙人。

8 tariff   

n.关税，税率；(旅馆、饭店等)价目表，收费表

参考例句：

• There is a very high tariff on jewelry.宝石类的关税率很高。
• The government is going to lower the tariff on importing cars.政府打算降低进口汽车的关税。

9 tariffs   

关税制度； 关税( tariff的名词复数 )； 关税表； （旅馆或饭店等的）收费表； 量刑标准

参考例句：

• British industry was sheltered from foreign competition by protective tariffs. 保护性关税使英国工业免受国际竞争影响。
• The new tariffs have put a stranglehold on trade. 新的关税制对开展贸易极为不利。

10 baker   

n.面包师

参考例句：

• The baker bakes his bread in the bakery.面包师在面包房内烤面包。
• The baker frosted the cake with a mixture of sugar and whites of eggs.面包师在蛋糕上撒了一层白糖和蛋清的混合料。

11 residential   

adj.提供住宿的；居住的；住宅的

参考例句：

• The mayor inspected the residential section of the city.市长视察了该市的住宅区。
• The residential blocks were integrated with the rest of the college.住宿区与学院其他部分结合在了一起。

12 territorial   

adj.领土的，领地的

参考例句：

• The country is fighting to preserve its territorial integrity.该国在为保持领土的完整而进行斗争。
• They were not allowed to fish in our territorial waters.不允许他们在我国领海捕鱼。