Insights

The Trump-Kim Summit was a success for at least one party involved: Vietnam

The prevailing international feeling on February’s Trump-Kim summit in Hanoi is disappointment. As the world watched, the build-up and media attention appeared wasted when the summit ended prematurely without a deal, potentially setting negotiations back considerably. There was, however, a success story to be found: the long-term effects of Vietnam’s role hosting the deal could have a major impact on its growth and ambitions for international importance.

AN IDEAL HOST

Ahead of the summit, foreign press talked up Vietnam as a smart choice due to its apparent value as a model for North Korean prosperity, in which the government could open markets without relinquishing its control. Visiting photojournalists, meanwhile, documented the enterprising local businesses, whose efforts to wring profits and promotion from the event ranged from summit-themed T-shirts, to punning cocktails, to free Trump- and Kim-style haircuts. While these made for eye-catching photos, they were merely a sideshow for locals, who in man-on-the-street interview after interview expressed their national pride, optimism, and hopes for peace.

Anticlimax aside, the summit proceeded largely as planned, save for a bit of mandatory reshuffling when Kim and the other North Korean government officials were booked in the same hotel as the US Press Corps. The fact that there were no major issues or impediments despite only two weeks’ preparation (Singapore had over two months) counts as a major PR victory for the Vietnamese government, which scrambled to manage the city’s famously hectic traffic and beautify its weathered colonial-era buildings. The country’s reputation is likely to benefit similarly to how it did following 2017’s successful APEC summit.

TRADE AND INVESTMENT

While the Vietnamese stock markets dipped following the summit, they have since recovered and are continuing an upward trajectory. The summit’s clearest beneficiary may be Vietnam’s airline industry. Trump’s visit to the Presidential Palace, in which he affirmed trade commitments and signed off on pre-approved deals, included the sale of 110 Boeing 737 MAX wide-bodied aircraft. 100 of those went to the private low-cost carrier Vietjet, but perhaps more interestingly, the remaining ten were purchased Bamboo Airways, a domestic airline with little present use for such large jets. As Vietnam’s BBC reported, these planes seem to have been bulk-purchased for the sake of loans and investment, an increasingly common practice which reflects confidence in the sector’s growth. Soon after, the US Federal Aviation Administration announced that it would allow Vietnamese airlines to fly to the United States and code-share with US carriers for the first time.

Airlines are not the only Vietnamese industry which stands to benefit, as, in addition to smaller trade deals, the event paves the way for further international investment. Vietnam has garnered massive foreign direct investments (FDI) recently: $19.8 billion last year, up 9.1 percent from 2017, with most of it in manufacturing. This has also driven a rapidly expanding export economy and rising wages (albeit accompanied by high inequality), with the US, with which Vietnam normalized relations in 1995, as its largest market. Vietnam’s surplus has been further boosted by the US-China trade war which has allowed Vietnam to usurp some of China’s market dominance.

INTERNATIONAL APPEAL

When Singapore hosted the previous summit, it played to its strengths as a modern, clean, high-tech, English-speaking business hub for the rest of Southeast Asia. The $20 million the Singaporean government spent on promotion was reportedly returned eight-fold in investments that followed. In Vietnam’s case, the government and state-controlled media has emphasized the country’s stability, neutrality, and safety as markers of its ability to host international events.

Unlike tiny, highly urbanized Singapore, Vietnam also boasts a wealth of tourist-friendly historical sites and natural beauty which it is eager to promote. Predictably, Google searches for Hanoi quadrupled in the days before the summit, but those were nearly matched by searches for Ha Long Bay, the scenic UNESCO Heritage Site two hours from the city to which many of the 3000 foreign reporters who attended the summit received free trips. Tourism in Vietnam has already been on a huge uptick in the past several years, driven both by international attention (the 2017 film Kong: Skull Island memorably showcased various famous sites, including Ha Long Bay) and relaxed Visa rules for many countries.

South Korea is among these, and reporters from the democratic nation who came to Hanoi to cover the activities of its northern neighbor inevitably publicized the summit’s setting. Tourism among South Koreans to Vietnam has jumped dramatically in the last few years, with arrivals recently becoming neck-and-neck with falling numbers of Chinese. APEC host city Da Nang, with its white sand beaches and extensive Korean investment, takes first place as a replacement for those escaping Korea’s long winters. But historical and political center Hanoi, which can get rather chilly itself, beats out steamy business capital Ho Chi Minh City for second place. Vietnamese, for their part, are traveling in increasing numbers to both South Korea and, post-summit, North Korea.

A NATION IN TRANSITION

Vietnam is an increasingly online country, with over 64 percent of the country having internet access, most of whom also use smart phones and social media. This spread, as well as the near-ubiquity of wi-fi in urban centers, has created a generation of young digital natives who conduct much of their social and economic activity online. The relatively unregulated internet has the effect of building connections to the outside world, inspiring young people to learn other languages and catalyzing a movement towards influencer marketing.

While issues of chaotic, under-managed traffic and environmental pollution still dog Vietnam among global tourists, entrepreneurial Vietnamese have found various ways around these, focusing on sites further afield or organizing eco-conscious tours and clean-ups. It is this individual resourcefulness that will likely benefit the whole of Vietnam most as it builds on the success of the summit to cement itself as a major global player.

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