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Market |
Defence |
Report Type |
Market Research |
Country |
Vietnam |
Published |
3 February 2010 |
Number of Pages |
64 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
File Format |
- |
Vietnam's army is extremely experienced operationally and well-supported by the government. It has the potential to be a dominant regional player in both security and defence. In December 2009, it was reported that the government was urging the 'rapid development' of its state-owned defence industries to supply the army with the most modern military equipment. No details were revealed about how it is planning to develop those capabilities and the announcement is unlikely to affect procurement policy for many years ahead. The industry is held back by a lack of infrastructure to produce technologically advanced equipment.
While Vietnam has relied on reverse engineering, future purchases may include technology transfers which could allow them to jump generations ahead in technology. The country lacks the industrial and scientific base to successfully research and develop a credible defence industry.There was strong economic growth over several years until the global financial crisis (and an earlier home-grown one in 2008), which resulted in an extended period of political stability. However, political risk may rise with deteriorating economic conditions.
Real GDP growth in Q409 was 6.9% y-o-y, bringing full-year growth in 2009 to 5.1%, according to estimates released by the General Statistics Office of Vietnam, in late December. That was driven by strong domestic demand, which suggests a sharp tightening of fiscal and monetary policy will be needed in 2010. We maintain our below-consensus forecast of real GDP growth dropping to 4.4% in 2010 as domestic demand suffers.
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