Vietnam: A risky investment

Local residents ride bicycles past a poster featuring the VSIP (Vietnam-Singapore Industrial Park) Hai Phong, an integrated township and industrial park.

I may go to Vietnam this summer with my family and a couple of friends. I haven't been back since I left as an infant, and my brother and I are both excited about visiting this strange but familiar landscape. In thinking about whether or not I would ever live there, the answer is a definite "no," at least not as the country is right now. There is still a lot of corruption, and the infrastructure is fundamentally flawed. A prime example would be this excerpt from a recent investment article in U.S. News (and honestly, it doesn't surprise me):

Like many developing countries, Vietnam's economy has grown despite the financial crisis. But Vietnam's growth slowed in 2009, with GDP rising 5.32 percent, compared with 6.18 percent in 2008. Weakness in the country's economic infrastructure remains despite reform; many investors remember that in 2007 and 2008, annual inflation rates in Vietnam were more than 25 percent. A.M. Best places Vietnam in the riskiest of its five tiers. This tier indicates a "legal and business environment with limited or nonexistent capital markets." Vietnam's financial system is particularly troublesome for investors because "cumbersome bureaucracy" and state control in the form of the Ministry of Finance create a "very high" financial risk, according to A.M. Best. It now costs about $240,000 to insure $10 million of Vietnam's sovereign debt over five years.