Vietnam’s large female workforce attracts investors: Bloomberg
Updated at Thursday, 27 Dec 2018, 11:26
The Hanoitimes - This is one reason why Vietnam is the only emerging Asian nation outside of China that received net foreign portfolio inflows in this bear-market year.
Vietnam’s high female workforce-participation rate helps the country exploits its demographic dividend, which is a good news for foreign money, according to Bloomberg.
Throughout the country, many well-known businesses are run by women, including Mai Kieu Lien, who captured the rising middle class’s thirst for protein-rich milk drinks and built Vietnam Dairy Products JSC into a US$10 billion empire.
Then there’s Nguyen Thi Phuong Thao, founder of budget airline VietJet Aviation JSC, who became Vietnam’s first female billionaire. Vietnam’s hourglass Hanoi-to-Ho Chi Minh City geography makes flying an efficient option in a nation that’s yet to build a high-speed rail line between the two megacities, Bloomberg stated.
Riding the consumer-spending wave lifted Cao Thi Ngoc Dung’s Phu Nhuan Jewelry JSC and Nguyen Thi Mai Thanh of Refrigeration Electrical Engineering Corp.
At 73%, Vietnam’s female labor-participation rate is among the highest in the world. The country’s women are also avid business pioneers: For every male early-stage entrepreneur, there are 1.4 female ones, estimates Global Entrepreneurship Monitor. Women contribute 40 percent of the nation’s wealth, nearly on par with China.
With fresh memories of the billions of dollars in wealth created in China, many are looking for China 2.0. They’re seeking countries with the right demographics – young, eager workers building manufacturing hubs, and in turn, using fatter pay checks to buy their first cars or designer handbags.
Looking at the overall population, Vietnam is only the world’s 15th largest country, smaller than Indonesia, Pakistan, Bangladesh and the Philippines. But most of its rivals come with demographic dividend discounts. The women labor-force participation rate in Pakistan and Bangladesh, for instance, is a paltry 25% and 33%, respectively. Taking that into account, the real working age population (between 15 and 64) would be only 37% and 45%, instead of the official 61% and 67%.
When a country starts replicating China’s manufacturing model, it often has to export low value-added products first, such as apparel and shoes. While Vietnam is quickly moving up the ladder into smartphones and semiconductors, the biggest chunk of its exports to the US last year remained textiles. Who stitches clothes and sews shoes? Women.
This is one reason why Vietnam is the only emerging Asian nation outside of China that received net foreign portfolio inflows in this bear-market year, stated Bloomberg. Many investors are betting Vietnam will be the big winner as the trade war between the US and China drags on. And even before the sparring started, Chinese companies, such as textile manufacturing giant Shenzhou International Group Holdings Ltd., had already opened factories there.
Nevertheless, according to McKinsey Global Institute, the perceived wage gap for similar work is much higher in Vietnam than in neighboring Malaysia or the Philippines. Unfortunately, just like China and India, boys are seen as the better sex – the sex ratio at birth is a stubbornly high 1.10 as women abort female babies. As the middle class becomes wealthier, women may be discouraged by gender income inequality and prefer to stay at home.
For the time being, though, Vietnam is still the hot destination for foreign investments with strong and capable women.