In what would only be described as a dream come true for Vietnamese economists and politicians, a Harvard professor, speaking at a conference in Hanoi last week, said that the country could experience 13.6% (!) GDP growth by 2025 thanks to the proposed Trans-Pacific Partnership (TPP) free trade agreement.
VietNamNet reports that Harvard Kennedy School Prof, Robert Z Lawrence, said that the removal of import tariffs to major markets such as the US and Japan, along with the removal of technical barriers, would result in massive GDP growth for Vietnam over the next 11 years.
The 12-country TPP agreement is moving into its final round of negotiations, and if passed, would cut import tariffs in the US which currently stand at 17-32% to zero.
Vietnam would clearly come out on top if TPP is approved as growth estimates for other member countries are significantly lower, according to VietNamNet:
“Vietnam’s GDP growth rate may reach 13.6% in 2025, much higher than 0.4% of the U.S., 2.2% of Japan, 1.4% of Peru and 6.15% of Malaysia. Meanwhile, Vietnam’s exports will surge by 37.3%, higher than 4.4% of the U.S., 14% of Japan and 12.4% of Malaysia.”
However, Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM), said that the numbers were a bit skewed as, “Vietnam has a low starting point, so the nation can spring up at the highest speed compared to other countries.”
Lawrence also predicted that the passage of the TPP would help restructure Vietnam’s state owned enterprises and banking system, both of which have contributed to the country’s sluggish economic growth over the past few years.
If things play out the way Lawrence expects, it seems like Vietnam is poised to regain its status as Asia’s next Tiger Cub economy.
[VietNamNet // Photo via David Z]
