Vietnam Pest Analysis

PEST Analysis

Politic:

The political system is stable. The politics of Vietnam are defined by a single-party socialist republic framework, where the President of Vietnam is the head of state and the Prime Minister of Vietnam is the head of government, in a one-party system led by the Communist Party of Vietnam (wikipedia). In terms of politically domestic policy, the government kept a political stability, and showed some positive signs. For example, the freedom of the press seemed to be extended. In addition, the government was also more aware of its limitations and of the policy mistakes. Concretely, at the Fourth Conference of the Party Central Committee (XI), Mr. Nguyen Phu Trong said: “Besides the achievements, the Party building work still has many limitations and shortcomings, weaknesses, even spanning multiple defects; these limitations would reduce people's trust in the Party; if not corrected, they will be the challenge for leadership of the Party and the survival of the regime.”

Despite ongoing reform efforts, the regulatory framework lacks efficiency. Although no minimum capital requirement is imposed, starting a business still takes more than the world average of 30 days and seven procedures. Completing licensing requirements remains costly and time-consuming. The labor market remains rigid, and there is considerable informal labor activity. Inflation has been high, hurting monetary stability.

The judicial system is not independent and lacks efficiency. Private property rights are not strongly respected, and resolution of disputes can take years. Infringement of intellectual property rights is common. Corruption is due in large part to a lack of transparency, accountability, and media freedom as well as inadequate systems for holding officials accountable for their actions. According to the results of survey which is conducted by Transparency International Organization, the corruption perception index 2012 of Vietnam is 31 at the rank of 123/176...