Recession in Vietnam

Posted on June 14, 2013

There has lately been a lot of talk, and in many places fretting, about whether there is a current recession in Vietnam.  Many foreign experts and commentators have opined that the bloom may be off the rose.  The Asian Tiger may be in trouble they say. They have put their forecasts where their opinions are.  I won’t bore you with the numbers.  A Google search will quickly confirm that indeed there could be a slowdown in some sectors and that some corporates appear to be showing signs of distress.  Just a short-time ago predictions from those same experts and commentators I might add were for continued clear sailing into the upper reaches of Asian Tiger-hood.

Let me go on record as saying that if there is a slow-down in Vietnam, such a period of down-turn is necessary for the country to stay on track in its development and for it to develop the resilience of its institutions that is necessary to maintain economic growth and stability even in the intermediate term.  This, of course, is true for any country regardless of its position on the development spectrum.  Institutions are rarely tested when things are going well.  It is in more difficult times that they can be strengthened.

As far as I know the business cycle has not disappeared.  The success of a country should not be measured by whether its growth is straight-line.  We have seen the results of an attempt to do so in the U.S.  The near forced suppression of the business cycle in the U.S. during the 1990s particularly had severe results for the U.S. economy in the next decade and arguably beyond.

Posted in: Asia