Friday, February 26, 2010

Why expats are so important for countries like Vietnam

Vietnams economy grows and grows. Investment banks aren't stopping to mention Vietnam as a good place for investment. so far so good. But is money the only issue? Does Vietnam just lack of cash? No. The biggest problem is still experience and education.

When it comes to global business, companies and business people in Vietnam still have less experience and knowledge. This is a bad news. but it's also an opportunity. Because help is there already.

The reason why expats work in developing countries is simple: They want to develop the country and - at the same time - markets and their own businesses. In many sectors foreign guidance is still neccessary.
Kenichi Ohno, research director at the Hanoi-based Japanese think tank, said recently:

Vietnam is still at stage one, which means simple manufacturing under foreign guidance... he country’s development has been “passive,” dependent on the “liberalization effect” after doi moi and large inflows of investment, capital and aid, and unable to create “internal value” to ensure sustainable growth.

The threat right now is that people are okay with the current situation. I know a lot of companies replacing expats with local staff. That might work in some cases. But overall, I think it is way to early to change the management positions. I know a lot of cases where companies failed. Most VN managers still have no mid- or longterm view, no idea of sustainability, of competition, of business rules in international markets.

See experts as support. Hiring an expat might be even cheaper than a consulting company. Expats are not just rich foreigners, they usually choose a lower living standard here and act more like a teacher.

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