Viet Nam's economy was on the right track to recovery following the global economic crisis, said Professor Joseph Massey, Chairman at Global Reach (US), Inc.— Photo baocongthuong

He was speaking at a briefing to discuss Vietnamese businesses and opportunities to participate in global value chains, in Ha Noi early this week, which was held by FPT School of Business (FSB).

Joseph Massey is currently president of US Global Reach, an organisation of borderless development consultants who seek to connect Japanese and American businesses with markets seeking to penetrate into Japan and Asian countries, and seeking strategic partners.

Joseph said Viet Nam had bounced back and is on the right track after the economic crisis. The professor said he was surprised at the economic achievements that Viet Nam had accomplished after 10 years when he came back to Viet Nam and saw many tall buildings and large roads. He noted that the Vietnamese Government had controlled its financial and stock markets to avoid creating a Japanese Bubble Economy of the 1980s.

Prof. Joseph Massey mentioned the bubble story in Japan in 1987 and said that in 1987, Japanese non-reproducible assets (primarily land, excluding buildings) were worth about $13.7 trillion. The US land mass was reckoned to be worth about $3.2 trillion at the end of 1986. Japanese land is clearly the world's most expensive, and the stock bubble occurred in 1989 as the total value of the Tokyo Stock Exchange, was valued at $4.5 trillion, more than $1 trillion larger than the NYSE.

Prof. Joseph Massey.— Photo vinacorp

In 1985, to ease the negative effect on business, the Bank of Japan lowered interest rates, helping fuel the bubble. In 1989, the central bank begun raising interest rates from 2.5 per cent to 4.25 per cent and then to 6 per cent. Then the credit crunch appeared and bubbles begun to burst. Real estate and stock prices began a prolonged tumble in 1990 and Japan entered two decades of stagnation and recession.

The country's huge and increasing debt was also a result of its population declining, thus leading to reduced savings ratio as Japan revealed it will have 400,000 child care-openings by 2017. The Japanese government has established national laboratories in the cities. For Chinese or Japanese, a crisis often contains both danger and opportunity.

Therefore, in a crisis there was an opportunity for Vietnamese enterprises to participate in global value chains, he said.

Due to the reduction of its work force, Japan would seek a young work force from abroad, which presented an opportunity for countries like Viet Nam. Japan's ageing population would also open up exciting career opportunities in the field of nursing and heathcare, and Vietnamese businesses would take advantage of this field.

Joseph Massey stressed that technology was not all that critical, as human resources were decisive, noting that while minimising risks in investment, Vietnamese businesses should carefully study how to make wise decisions.—VNS