Nguyen Thi Thanh Loan grew up on a small plot of land in rural Vietnam, with just enough food to eat, few new clothes and no disposable income.
Today, she works in a Ford Motor Co factory assembling cars from Chinese, Thai, US and European parts, her children drink imported milk and Coca Cola, and she holidays with her family — winners of the globalization lottery.
“Before children didn’t have a lot of clothes or food, but life improved after their parents got factory jobs,” Loan, 36, said at the Ford plant near Hanoi.
Photo: AFP
She is among millions whose lives have been transformed by Vietnam’s free-trade embrace, a process that began in the 1980s and has hauled the communist nation out of the penury of the post-war years.
Vietnam now boasts one of Southeast Asia’s fastest growing economies driven by exports of cheaply made goods, from Nike Inc shoes to Samsung Electronics Co phones.
The progress is forecast to continue — albeit at lower-than-expected growth rates — despite a promise by US president-elect Donald Trump to dismantle a massive Pacific Rim trade deal that Vietnam had hoped would bring a jobs bonanza.
Yet Trump’s crusade to save US jobs he says are gobbled up by cheap overseas labor comes while his own daughter, Ivanka, makes some items for her clothing line in Vietnam.
Even if the sprawling Trans-Pacific Partnership trade pact runs aground, Vietnam says it has no plans to close its doors on trade.
“By going global, by going regional, Vietnam has clearly reaped the benefits of globalization,” World Bank Vietnam country director Ousmane Dione said, citing large reductions in poverty.
A glance around Hai Duong, 50km from the capital, reveals why Vietnam has staked its future on free trade.
Since Ford first opened its doors 20 years ago the area has morphed from an agrarian backwater into an industrial zone peppered with foreign-owned factories churning out electronics, clothing and machinery.
Vegetable plots and fishing ponds have been replaced by a four-lane highway for trucks carrying goods for export.
Held back by years of war and crippling Soviet-style policies, Vietnam has boasted annual GDP growth of more than 5 percent for the past five years — though it failed to reach its ambitious target last year.
The nation first opened its economy to foreign firms in the 1980s and investment gathered pace after the US scrapped a war-era trade embargo in 1994.
Exports now account for 90 percent of GDP, while the average annual income has surged from US$290 two decades ago to about US$2,100 today, according to the World Bank.
In Hai Duong, the average Ford factory worker can earn more than twice that — although still a far cry from the average US manufacturing wage of about US$43,000.
“Everything has changed,” said Nguyen Van Tuan, 48, a part-time chauffeur, who grew up in a house made of mud and straw.
Today, Tuan is proud of his three-story concrete home — built using the US$800 Ford paid for his land 20 years ago.
It sits on a paved road dotted with shops selling iPhones and Japanese badminton rackets. His two children have now moved to Taiwan, a nation higher up the manufacturing value chain.
For Ford, Vietnam’s abundance of cheap labor and expanding domestic market is a magnet — it sells cars locally to an upwardly mobile middle class.
Not that the wins of globalization are universal.
Vietnam remains a tightly controlled authoritarian regime, independent unions are banned and dissent is swiftly muzzled.
Large foreign firms also stand accused of flouting labor and environmental laws.
Last year, Taiwanese firm Formosa Plastics Group was blamed for killing millions of fish through toxic dumping.
The company later said Vietnam has to choose between development and protecting the environment.
“Regulations in regards to the environment have loosened, so we’ve seen some negative effects,” Vietnam Institute of Economics Studies head Tran Dinh Thien said.
However, for the factory workers of Hai Duong, the trend toward globalization remains welcome.
“Ninety percent of my generation work for companies like Ford,” 32-year-old technician Pham Van Hai said, standing before a sea of car parts on the factory floor. “There’s a 20-year age gap between me and my daughters, but the difference in terms of economics is more like a couple of centuries.”
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