Economic Analysis of Rwanda and Vietnam
The economic status of a nation is dependent on the various activities and the enabling environment that the subject government has put in place. According to Heshmati (2017), the enabling environment, on the other hand, is pegged on various policies that the political leadership as well and other players within an economy have formulated. In the recent past countries in the sub- Saharan Africa and those in the Southern part of Asia have surprised the world on the way they have managed to implement economic policies leading to a drastic economic development (Stephan, 2016). However, there are various challenges that still face the countries, which make scholars the sustainability possibility of these growth. In light of this, this paper, therefore, analyses the nature of activities, economic planning, the market and the civil societies of Vietnam and Rwanda.
Focus on Vietnam
Vietnam’s history can be traced back in the 3rd century. This country is in the Southern part of Asia, though it is very much known for its interaction with China which happens to be in the Eastern part of Asia. The interaction between China and Vietnam has led to evolution on various sectors of the economy as well as positive influence on various cultures amongst the citizens of these countries. The county has a total population of about 92 Million according to the World Bank rating in the year 2016 (Heshmati, 2017). This population grows at the rate of 1.1% which translates to a population density of approximately 300 people per square kilometer. Though the country has been faced with a number of civil strife which has made it face a number of challenges on its economic development, it has managed to tame the challenges in order to ensure the current economic stability. The following are some of the economic activities that the county has engaged:
Economic Activities
One of the features that has helped Vietnam in realizing its economic dream is the advantage of its strategic location. The geographical location of this nation enables it to trade both with African countries, European countries, the neighboring countries in Southern Asia such as India and China, which happens to be its main trade partner. According to Sakata (2013), though the country has adverse climatic conditions, it has been able to venture into agriculture through application of technology-based irrigation. An example of an agricultural product from Vietnam which is sold in the word market is rice. This country’s rice is sold both to the countries within the regional economic integration and other African countries.
The reason as to why Vietnam has been able to apply technology and diversify its exports is because of Technology based production which it has copied from the neighboring country China. Based on the fact that Chinese are technology giants, the country is able to copy means through they do value addition to their products before they are exported. Vietnam has been able to export ivory, skins, and other tropical products (Heshmati, 2017). China in return export technology and literature to Vietnam. The county has also been able to ape the Chinese culture of communism, based on Karl Max’s theory of economic development.
Economic Planning
Vietnam does it economic planning in line with the sustainable development goals of vision 2030. This is also reviewed periodically to accommodate the various changes that have taken place in the world’s economic structure. This style of economic planning has led to economic growth of 7%, with a Gross Domestic Product (GDP) per capita of $ 3200 (Heshmati, 2017). The country’s service is dominated at about 85%, while the capital investment covers about 32% of the aggregate GDP. Figure 1 below shows the industrial composition as at 2016;
Figure 1. Industrial Composition in Vietnam
Adopted from the Word Bank’s Report on Vietnam 2016.
Civil Societies
According to Heshmati (2017), the country’s political leadership has of late given enough space to the civil society, which campaigns for the rights of citizens. This evident from the recent alignment with various Non-Governmental Organizations in the country. This is a clear evident that the level of democracy is rising in Vietnam.
Focus on Rwanda
Rwanda is one of the smallest East African countries, whose economic growth has been admired by many countries especially in Africa. The country’s population as at 2016 stood at 11.6% with a steady growth rate of approximately 2.4 % (International Monetary & Rwanda, 2013).The population density for this country is about 480 people per square kilometer. The following are some of the key pillars for Rwandese economy.
Economic Activities
The country happens to be landlocked making it to use its neighbors such as Kenya and Tanzania transport its products. The country has been very cooperative in the regional trade blocks. For example, it was one of the country’s that first joined the bordering East Africa Cooperation. Such quick economic decisions were made or have been made over time in an effort to make the country recover from the economic turmoil which was caused by the genocide in 1994. According to the World Bank ratings in2016, the economy of Rwanda grows at 8% (International Monetary & Rwanda, 2013). The country has been able to reduce the time taken in registering business to only 7 days. This move has led to emergence of many Small and Medium Business.
Other than this, the county has been able to invest heavily in technology. This has led to modern infrastructure which as open the country to both local and international investors. Within the region, Rwandan economy is rated as the most prime for investment due to the flexible trade laws. The above has led to a great growth in the country’s GDP. Figure 2 below shows the growth ratings of the a few African countries;
Figure 2. GDP Growth in African Countries
Adopted from the World Bank report on Rwanda of 2015
As at 2016, the GDP of Rwanda stood at $ 8.76 Billion. While the GDP per capita was $ 702. Below is the country’s GPD growth between 2015 and 2017;
Figure 3: GDP in Rwanda between 2015 and 2017
The International Monetary Fund website (2018).
Economic Planning
The Rwandese government does its economic planning in line their general elections, which is after 7 years (Heshmati, 2017). Comparison is done not only internally but also through benchmarking with other neighboring countries.
Civil Societies
According to Heshmati (2017), based on its past experience, Rwanda has given very little space for civil societies. The Political world is dominated by one party and the government is held accountable with a very small opposition. It is however, worth to note that the country’s political leadership has been able offer services as required. This is evident from the faith that the citizens have on the political leadership.
Comparison of Rwanda and Vietnam
Similarities
Just like Rwanda, Vietnam has faced civil strife in the past which made it to suffer economic set back. Despite this, the two countries have been able to recover and make the economy to grow steadily. Just like Vietnam, Rwandese economy is dependent on technological advancement, which to an extent has been achieved through partnering with other neighboring countries (Connelly et al., 2017) .From the evidence given in the analysis above, Rwandese economy is one of the best within the East African region. This is the same to Vietnam which has managed to go against the various odds to be one of the best economies in the Southern Asia.
Difference
Unlike Rwanda whose trade partners are majorly regional or neighboring countries, Vietnam trades with countries within the region and in the global market. Unlike Rwanda which has made a lot of restriction to the civil society, hence giving a very slim space for democracy, Vietnam has given enough room for the civil societies who help the citizens in making the government accountable. Rwanda’s climatic state is better than that of Vietnam, though it has not managed to diversify its exports as witnessed in the case of Vietnam.
Conclusively, from the analysis above, it is possible to conclude that both countries are within the requirements of sustainable development goals, though Vietnam does better than Rwanda. The reason behind this is the high level of partnership that the government has managed to create with other stakeholders in the economic development. However, for Vietnam to sustain this, then it will have to open trade avenues further, lest it be suffocated with the upper middle income and high-income countries which neighbors it.
References
Connelly, J. T., Limpaphayom, P., Nguyen, H. T., & Tran, T. D. (2017). A tale of two cities: Economic development, corporate governance and firm value in Vietnam. Research in International Business and Finance, 42102-123.
Development Reports, adopted from, Human Development Reports of UNDP: http://hdr.undp.org/en/.
Heshmati, A. (2017). Studies on Economic Development and Growth in Selected African Countries. Singapore: Springer.
International Monetary, F., & Rwanda. (2013). Rwanda: Poverty Reduction Strategy Paper. Washington, D.C.: International Monetary Fund.
Sakata, S. (2013). Vietnam’s Economic Entities in Transition. [Basingstoke]: Palgrave Macmillan.
Stephan, K., Victoria, G., Franziska, J., & Miriam, N. (2016). Public Sector Performance and Development Cooperation in Rwanda: Results-Based Approaches. [N.P.]: Palgrave Macmillan.
United Nations Statistics Division adopted from: http://unstats.un.org/unsd/databases.htm.
World Data, adopted from the Word Bank data base: http://databank.worldbank.org/ddp/home.do?Step=1&id=4
