Today we visited two large related companies: VSIP & II-VI (more colloquially known as “2-6”). VSIP is dedicated to working with Singapore to develop towns tailored to industry growth by harboring residential communities and industrial sites. They build massive towns to foster growth. However, they partner with Singapore to invest in themselves.
To me, this seemed a little fake almost. Why would Vietnam partner with a random rich country just to build fancier towns. Additionally, the VSIP spokesperson explicitly stated how they tend to only build towns in Vietnam and not Singapore. Thus, what incentive would the foreigners have to invest here? That’s the key to this situation.
After hearing from the VinaCapital’s spokesperson state that the Vietnamese government has little money, because of the low taxes, I deduced that Singapore is essentially the investor of all these VSIP projects, and they will be repaid upon completion and successful use. Singapore recognizes the economic opportunity Vietnam has and is taking advantage by directly working with each other’s governments to make money.
This exemplifies yet again how Vietnam is a booming country and making change around the world. A wealthy country such as Singapore partnered up with a firm in Vietnam just to improve its own infrastructure. Think about that. A foreign country is putting its own money into the well-being of another land because of an amazing outlook for the future. If that isn’t the quintessential example of globalization, then I don’t know what is.
Following the VSIP site visit, we took a trip to 2-6, a manufacturing company making materials such as plastics, metals, etc. for any item on the market you can think of requiring it, however they mostly specialized in coolers. Our first tour guide stressed the main ideas of how Vietnam provides huge tax incentives for new businesses and how the cost of labor is very cheap, thus the reason for a booming economy.
This sounded interesting to me because I found this sounded similarly to America during the Industrial Revolution. Low wages, people doing cheap labor, not many rights. With all these economic incentives, someone usually receives the butt end of the stick, and in this case isn’t it the workers? Who wants to make $0.50 an hour? No one. I really wonder if with this economic boom, like during the Industrial Revolution, there will be a major human rights violation and protest. I wonder if people are getting treated fairly in the factories. I wanted to ask these questions, but it didn’t seem appropriate at the time. Then, we went inside the factories to see, firsthand.
I was very surprised. There were tons and tons of workers, all looking very happy, with all necessary protective gear on (such as safety goggles, gloves, etc.) and this strict adherence to safety and happy group of workers conveyed to me that these people are alright. This means so much more than it is.
If you have happy workers, that are not protesting, and you have a growing economy to the extent that an incredibly wealthy country wants to partner with you, your forecasts for the future are looking amazing. Vietnam is the new America, the land of greater opportunity.