Vietnam’s Race Against Time and Money
Vietnam’s Race Against Time and Money
In the October 12, 2023 edition of The Economist, the magazine published an intriguing analysis of Asian countries that run the risk of becoming old before becoming rich (link below). The story led with an example from Thailand. It noted that the share of Thailand’s population who are 65 years and older increased to 14 percent in 2021 from 7 percent in 2002. Demographers consider nations with 14 percent of their population 65 years and older to be “aged” societies. If 7 percent of their population is 65 years and older, they are “aging” societies. Thailand’s demographic shift from “aging” to “aged” took 19 years. With a GDP per capita of around $7,000 in 2021, it became aged (i.e., old) well before it became rich which most analysts define as having escaped the Middle Income Trap by achieving a GDP per capita of $12,000 or more.
The Economist estimates it will take Vietnam 17 years to become an “aged” society. On a GPD per capita basis, Vietnamese are currently a bit more than half as rich as the Thais, but they are much younger. The median age of a Thai citizen is nearly 40 years old while it is around 32 for a Vietnamese person. Vietnam is also larger in terms of population with 100 million people compared to 72 million for Thailand. This demographic picture is positive for Vietnam. However, the concern is the speed of the transition from aging to aged compared to the speed or time it will take Vietnam to escape the Middle Income Trap, i.e., to become rich.
In our book, Vietnam – Asia’s Rising Star, we invested a lot of our research efforts on the demographic and Middle Income Trap issue. We argue that Vietnam’s population of 100 million with a median age of 32 and a workforce of 60 million is an asset. We also argue that Vietnamese women’s significant role in the economy (88 percent of women of working age have jobs) is another asset and one which can help address any future demographic crisis. These are just some of the comparative advantages and assets that we hope will help Vietnam become richer before it becomes older.
To learn more about this and other issues, order your copy of our book today.
Thank you for reading.
Brook Taylor and Sam Korsmoe
The Economist Link: https://lnkd.in/drkjQ9tU