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5943 results in Economics: general interest

Page 57 of 298

  • Chapter 4 - Nissan Mexicana's Renewable Power Partnership

    • By Aideé Figueroa López, PhD in management science from Tecnológico de Monterrey's EGADE Business School., Isidro Marco A. Cristobal-Vazquez, Management science doctoral candidate at Tecnológico de Monterrey's EGADE Business School, and he lectures at the Instituto Politecnico Nacional in Mexico City.
  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 47-60

  • Summary

    Abstract

    As part of its mission statement, Nissan Motor Corporation instituted the Nissan Green Program (NGP), a roadmap for making the Japanese automaker the worldwide leader in zero-emission mobility. In 2011, Nissan launched NGP 2016, the third iteration of its green program, focused on reducing its carbon footprint, shifting to renewable energy, and diversifying the resources the company uses. In keeping with NGP 2016, Nissan Mexicana— the company's Mexican subsidiary— took a risk by adopting renewable power for the largest of its three plants, located in Aguascalientes. Before 2012, the main source of electricity in Mexico was the government-backed Comisión Federal de Electricidad (CFE), which used mostly fossil fuels to produce power. Nissan's facility, known as Aguascalientes 1 (or A1), has been using electricity generated from biogas and wind since that time and, by 2014, obtained nearly half of its electricity from renewables. These renewable energy sources have saved Nissan Mexicana money, lowered greenhouse gas emissions, and bolstered the company's reputation. This chapter shows how Nissan Mexicana and its energy development partner, ENER-G, worked with municipal and state governments to match interests and enhance environmental sustainability.

    Introduction

    Climate change has deeply impacted the global automotive industry. For nearly a century, the industry's main product— four-wheeled transportation powered by fossil fuel combustion— has been a major emitter of greenhouse gases (GHGs). Now, however, the tables have turned. The socalled carbon constraints to limit climate change are present in all automotive markets. These rules require auto manufacturers in the United States, European Union, and Japan to lower the carbon emissions of new vehicles and develop new technologies to help meet constraints. For example, according to Nissan's 2012 sustainability report, Japan's 2009 Emission Standards require a 47 percent reduction in nitrous oxide and 64 percent reduction in particulate matter emissions from 2005 levels for many Japanese vehicles. Europe's 2015 “Euro 6” standard aims to reduce automotive emissions in graduated stages. All mass-produced automobiles and vans must now meet emissions standards for nitrogen oxide, carbon monoxide, hydrocarbons, and particulate matter.

    Carbon constraints generate both risks and opportunities for manufacturers like Nissan. Though new rules may be forcing automakers to change their practices, companies that use carbon constraints to drive innovation are creating competitive advantages.

  • Chapter 10 - Chile's Las Palmas Avocado Orchard: Water Consumption Reduction in Agriculture

    • By Siegfried King, Agricultural sector in Chile. He trained as a mechanical engineer with experience in the renewables and energy efficiency sectors.
  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 141-154

  • Summary

    Abstract

    This case study reviews the best sustainable water use practices of the Las Palmas avocado orchard, located in the Aconcagua valley of central Chile. Although this fertile agricultural region sits in the heart of Chile's wine country, it has suffered from drought in recent years. As food demand continues to grow in a world with more than seven billion people, food producers in Chile and around the world need to improve their stewardship of water resources. Las Palmas exemplifies a host of water-saving strategies, including high-density planting, crop selection, and soil moisture sensors to control precision irrigation. The implementation of these sustainable practices allows a water-dependent orchard to increase competitiveness, reduce operational costs, mitigate risk, and add value to products.

    Introduction

    According to the United Nations, 70 percent of global water withdrawals are linked to food and agriculture. Everything that we eat needs water to survive and grow. The stress on water resources will only get worse as global population increases and demand for food rises. Economic development will also increase the demand for fruits and vegetables, such as avocados, tangerines, and grapes, that will, in turn, require more water to produce. One Chilean company is working to address this challenge by reducing the amount of water it needs to grow avocados.

    This case study will focus on the best sustainable water use practices of the Las Palmas avocado orchard. Located in the fertile Aconcagua valley, 60 miles north of Chile's capital Santiago, Las Palmas comprises 1,972 acres of fruit-producing trees, including tangerines, table grapes, wine grapes, and avocados. Avocados account for half of the orchard's planted surface. In recent years, the surrounding valley has suffered from periods of prolonged drought. This chapter will show how the company has implemented initiatives to save water and provide environmental, social, and economic benefits.

    The Jorge Schmidt y Compañía Limitada, founded by Jorge Schmidt in 1986, owns Las Palmas, other orchards, and two other agricultural companies in the area— Desarrollo Agrario S.A. and Agricola Alto Aconcagua Ltda. These three companies combined employ more than 1,650 people and manage upward of 4,500 acres of productive agricultural plantations. The companies grow avocados, tangerines, and grapes (see Table 10.1).

  • Chapter 11 - Mabesa: Increasing Global Competitiveness with Eco-friendly Disposable Products

  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 155-170

  • Summary

    Abstract

    This case study illustrates how an innovative eco-friendly idea can help companies in industries with negative environmental reputations. Mabesa, a Mexican company that made and marketed disposable personal hygiene products, entered a challenging niche market with its Bio Baby diapers, establishing a unique, hard-to-copy product that was substantially more eco-friendly than its competitors. As a result, the company gained greater market share in the premium disposable baby diaper market in Mexico and the United States. The case highlights how even in an industry known for high pollution (the widespread use of disposable diapers comes at high environmental cost), companies can reduce the footprint of products, benefitting the environment, consumers, and businesses.

    Introduction

    This case study focuses on Grupo P.I. Mabe (Productos Internacionales Mabe S.A. de C.V.), better known as Mabesa, a Mexican company that has manufactured and marketed diapers and other personal hygiene products for the past 40 years. Over that time, Mabesa established itself as one of the leading diaper makers in Latin America, rivaling multinational corporations like Kimberly-Clark and Procter & Gamble. In 2015, Mabesa was Mexico's leading manufacturer of private-label products for disposable baby diapers, disposable adult diapers, and women's sanitary pads. In the same year, Mabesa ranked second in sales of disposable diapers for babies and adults in Mexico, Central America, Spain, and Portugal.

    And yet, there is another side to this coin. Environmentalists have long criticized the diaper industry for its wastefulness. For example, 93 billion disposable diapers are discarded worldwide each year. Further, approximately 5 percent of global solid waste is comprised of disposable diapers and other similar hygiene products. Diapers clog landfills— or even worse, they are treated as litter and tossed in ditches, rivers, lakes, or the ocean. Even those that make it into landfills require as long as 300 years to fully decompose because of the large amount of petroleum-based plastics used in their manufacture.

    As such alarming environmental news has increasingly become a part of consumers’ decision-making processes, Mabesa officials realized that they had a significant role to play in addressing this problem. With world population surpassing 7.4 billion in 2016, the demand for diapers is only increasing. To address this problem, Mabesa turned to the “premium” niche market.

  • Chapter 9 - Grupo Herdez Takes the Initiative in Mexico's Food Market

    • By Fairuz O. Loutfi Olivares, German Cooperation for Sustainable Development (GIZ) in Mexico and is a lecturer at the Universidad Iberoamericana in Mexico City
  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 125-140

  • Summary

    Abstract

    Grupo Herdez is a leading producer of shelf-stable foods in Mexico and a leader in the Mexican food market of the United States. The company has more than 9,000 employees and its 40 product categories include sauces, canned food, dairy items, and organic products. Grupo Herdez has ambitious goals for its sustainability strategy, built around two major initiatives: (1) reducing greenhouse gas (GHG) emissions at its facilities through wind power, and (2) agricultural development with the brand Aires de Campo, which provides training and certification for organic products and fair trade practices. As the company's sales of organic products grew, it found its energy footprint increasing. In response, Grupo Herdez has dedicated itself to clean energy— renewable energy sources are now being used at nearly half of the company's production facilities— and GHG emissions have been halved. This case study analyzes these initiatives in the context of Mexican energy reform, as well as the nation's nutrition and obesity crisis.

    Introduction

    Compañia Comercial Herdez was established in 1914 in the city of Monterrey, Nuevo León, Mexico. Ignacio Hernandez del Castillo started as sales director in 1929 and went on to purchase the company in 1941. He and his sons have built the company from a distributor of toiletries and personal hygiene products to a large multinational provider of shelf-stable foods (foods that can be safely stored in a sealed container at room temperature). This case study focuses on two of the company's sustainability initiatives: its wind power generation project and its efforts to build an organic food market in Mexico. The chapter also provides an overview of the Mexican food sector as context for Grupo Herdez's sustainability strategy.

    Today, Grupo Herdez is a multinational company with more than 1,500 products in more than 40 different categories sold in 17 countries. The company grew substantially starting in the 1940s by diversifying its initial products and creating strategic alliances. In the process, Grupo Herdez became one of Mexico's leading distributors of local and international food brands as well as of its own products, which include vegetables, sauces, mole (a spicy Mexican sauce made from chili and chocolate), mayonnaise, mustard, and jams.

  • Introduction

    • By Daniel C. Esty, Hillhouse Professor at Yale University with primary appointments in Yale's Environment and Law Schools and a secondary appointment at the Yale School of Management.
  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 1-18

  • Summary

    Business leaders in the twentieth century focused on delivering shareholder value. They paid attention to top-line growth and bottomline success. Environmental degradation emerged as a concern in the 1990s across the corporate world, including in Latin America. But while pollution impacts, ecosystem vitality, and natural resource management became top-tier policy concerns in recent decades, those topics remained secondary priorities for almost all companies until very recently. Executives in major enterprises viewed environmental matters as a regulatory compliance issue to be dealt with by lawyers and engineers.

    Business attitudes toward the environment— encompassing energy use and the broad range of topics associated with sustainability— have now shifted dramatically. Today's leading executives understand that their companies have social responsibilities. Of course, they are still accountable to their shareholders. But understanding that business success cannot be achieved at the expense of society means companies must also answer to an array of other stakeholders— from customers to employees to the communities in which they operate and, indeed, to society more broadly.

    This obligation takes on new importance in the context of emerging planetary boundaries. As Johan Rockström and his colleagues at the Stockholm Resilience Center have highlighted, human-induced stress on various Earth systems threatens to push the planet beyond its “safe operating space” along a number of dimensions— from climate change to biodiversity to water availability and ocean acidification. In addition to these ecological threats that may impinge on the quality of life on Earth, other researchers have identified a set of social strains— including poverty, income inequality, and evolving employment structures— that threaten the fabric of our communities. Where at one time this entire agenda would have been seen as the purview of governments, business today shares responsibility for society's response. As Peter Bakker, president of the World Business Council for Sustainable Development (WBCSD) and former CEO of the Dutch logistics company TNT, likes to say, “Businesses cannot succeed in societies that fail.”

    Simply put, a sustainability imperative now looms over the business world. This book offers guidance on how to manage the various dimensions of this sustainability agenda— providing lessons from a dozen case studies across Spanish-speaking Latin America and the sustainability management literature more generally. Of course, the optimal response to sustainability will vary by industry and geography.

  • Chapter 5 - Tecnosol Follows the Sun

  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 61-80

  • Summary

    Abstract

    Tecnosol is a solar power company founded in Nicaragua in 1998, which now has twenty-one branches throughout Central America. The company has profitably responded to the high demand for electricity in a rural region suffering from energy poverty, and has brought electricity to over 500,000 Central Americans. It has pioneered the use of microcredit to offer quality solar products to customers in rural areas who would otherwise not be able to afford them. Tecnosol then follows up on each purchase by teaching customers how to maintain their solar products so that their investment pays for itself quickly. This chapter chronicles Tecnosol's founding in the aftermath of the Nicaraguan civil war and analyzes its expansion throughout Central America. It then breaks down how Tecnosol attains results measurable at the triple bottom line— economic, environmental, social— demonstrating how sustainability can be a profitable business strategy, even in communities with low purchasing power.

    Introduction

    Tecnosol, a solar power company in Nicaragua, was founded in 1998 by Vladimir Delagneau, a Nicaraguan soldier who learned about solar power during the country's civil war in the 1980s. In founding Tecnosol, Delagneau was able to transcend the limitations of state regulations, contribute to Nicaragua's socioeconomic development, and enhance environmental protection. Driven by its founder's commitment to sustainability, Tecnosol has responded to an untapped market for clean energy in northern Nicaragua. By continually updating its position in the solar power field, the company has expanded; it now has 21 branches, covering rural and urban markets in Nicaragua and throughout Central America.

    Tecnosol's success shows it is possible to do profitable business in a region characterized by energy and fuel scarcity. By selling and installing solar panels, Tecnosol offers customers in Central America an off-the-grid, environmentally friendly energy solution, transforming the quality of life and economic productivity of rural residents. Today, the renewable energy company continues to operate successfully in areas where access to electricity is limited and power is expensive, as well as areas that lack institutional frameworks to encourage clean energy. Not limited to rural markets, however, Tecnosol has also brought clean energy to the urban market, where electricity is even more expensive and environmentally destructive.

  • Chapter 3 - Grupo Vanguardia Revitalizes Plastics Recycling in Honduras

  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 37-46

  • Summary

    Abstract

    Grupo Vanguardia, a Honduran plastics company, launched an innovative recycling initiative that has emerged as a core business strategy and foundation for marketplace success. This inclusive business model was built to reflect the economic realities of Honduras, a developing country with a struggling economy. By harnessing existing waste streams and a large base of previously informal workers, Grupo Vanguardia has delivered economic, environmental, and social gains in northeastern Honduras. The company has also gained higher margins by using recycled plastic, reducing waste, and creating jobs for lowincome Hondurans. The Grupo Vanguardia case study demonstrates how sustainability can create opportunities for businesses in countries where the government is unable to provide essential services like waste management.

    Introduction

    Grupo Vanguardia, a Honduran plastics maker, has become a corporate sustainability pioneer. The company has developed a set of social and environmental practices that have given it a sustainabilitydriven competitive advantage. Vanguardia's success is especially notable because the plastics industry has long faced criticism for environmental damage and low recycling rates. The company's unique business model emerged from its engagement with local communities and commitment to helping Honduran society. Founder Eduardo Moya developed this guiding vision in partnership with the low-income informal workers who collect and recycle waste in northeastern Honduras. That collaboration, Moya learned, worked well. Indeed, after Grupo Vanguardia provided training and financial support, many of the individuals in the informal trash collecting sector were able to start formal businesses. The collectors’ incomes increased, the company's bottom line improved, and discarded plastic was salvaged for successful reuse.

    Grupo Vanguardia's Best Practice

    Grupo Vanguardia has succeeded because it has developed a sustainable business model that reflects the realities of the Honduran economy. Honduras ranks among the poorest countries in Latin America, and informal work makes up a large share of the economy. Since its founding in 1992, Vanguardia has engaged with Hondurans to develop a new approach to plastic production. First, the company has taken advantage of the opportunity to use lower-cost recycled plastic as the feedstock for its manufacturing process, rather than relying on more expensive imported virgin plastic.

  • Chapter 2 - Walmart Mexico: Clean Energy to Reduce Costs and Improve Corporate Image

    • By Mariel Ferro Rivas, Management science PhD candidate at Tecnológico de Monterrey's EGADE Business School., Mariana Cesín Sastré, PhD student in business administration at the EGADE Business School within the Tecnológico de Monterrey (Mexico City).
  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 29-36

  • Summary

    Abstract

    Sustainability strategy has become a top business priority for Walmart Mexico, the retail giant's largest company outside of the United States. Walmart Mexico has not always prioritized sustainability. In fact, the company had long relied on a business model that instead emphasized low-cost production, low wages, and limited benefits for its store employees. Walmart Mexico has, however, now embraced sustainability as the centerpiece of a new, community engagement driven approach to business. This sustainability initiative— started as an investment in low-cost renewable energy resources— aligns well with Walmart's underlying commitment to “everyday low prices.” These investments also work to improve Walmart's public image, blunting political concerns that had arisen in Mexico about reports of corruption at the company. The case of Walmart Mexico brings to light two important lessons for Latin American companies on sustainability strategy. First, context matters: Walmart's commitment to financial savings actually strengthened the case for cost-saving investments in sustainable energy. Second, a crisis can sometimes provide the spur needed to embrace new business practices and develop successful environmental strategies.

    Introduction

    In October 2005, Walmart's world headquarters in Bentonville, Arkansas, announced that the company would pursue a set of sweeping, long-term sustainability goals. These aspirations included sourcing 100 percent renewable energy, creating zero waste, and selling products that sustain the environment. Walmart intended for these changes to apply at all of its companies worldwide, including at Walmart Mexico.

    After a slow start, Walmart Mexico has taken up the charge from Bentonville and made sustainability a major strategic priority. This effort has transformed the company into one of the world's most sustainable retailers, strengthened its brand, blunted government hostility, and protected Walmart's market position. Rather than adding financial burden, the company has found that sustainability actually bolsters its famous value proposition of “everyday low prices,” while also achieving a heightened level of corporate social responsibility.

    The Call to Action

    Walmart's chain of stores and supercenters in Mexico emerged from a local entrepreneur's successful business empire. In 1958, Jerónimo Arango opened the Aurrera Bolívar market in Mexico City. Over the next three decades, Arango went on to build his umbrella company, Grupo Cifra, and established a network of retail and service stores under the Aurrera, Superama, Vips, and Suburbia brands. In 1997, Walmart bought Grupo Cifra, renaming the chain Walmart Mexico.

  • Chapter 1 - Water Conservation in Scarcity Conditions: Corporate Sustainability at Mexico's FEMSA Group

  • Edited by Daniel Esty
  • Book:
    The Labyrinth of Sustainability
    Published by:
    Anthem Press
    Published online:
    29 May 2019
    Print publication:
    31 January 2019, pp 19-28

  • Summary

    Abstract

    FEMSA Group, a beverage and retail company headquartered in Monterrey, Mexico, has incorporated sustainability into its core business strategy with a special focus on water resource management. This case explores how a multinational corporation relying heavily on water resources can operate in a water-scarce region, advancing conservation and securing a “social license to operate.” It also examines the range of water conservation measures the company has instituted and maps out how FEMSA has created economic, social, and environmental value for the communities where the business operates. This success has emerged, in part, through partnerships with like-minded nongovernmental organizations and other for-profit companies. The FEMSA experience thus demonstrates that corporations working in concert with other stakeholders will often improve sustainability performance and business results.

    Introduction

    FEMSA Group (Fomento Económico Mexicano, S.A.B. de C.V) began operations in 1890 and has since emerged as a major beverage and retail company with its base in Monterrey, Mexico. FEMSA now operates in 12 countries, registers annual revenues of over US$18 billion, and employs more than 260,000 people. Its conservation and sustainability efforts serve as a beacon of corporate social responsibility in Mexico.

    FEMSA's emphasis on sustainability has emerged partly out of necessity. As the operator of the world's largest independent Coca-Cola bottling enterprise, as well as a stakeholder in Heineken, FEMSA Group must steward the most vital ingredient in its beverages— water. To that end, the company created the nonprofit FEMSA Foundation in 2008 to balance environmental protection, social responsibility, and economic growth. The FEMSA Foundation not only works to conserve water resources, but also delivers a broad array of social benefits to the local communities around FEMSA facilities, including nutrition training, clean water, and sanitation infrastructure. Our discussions with FEMSA and FEMSA Foundation employees have shown that the corporate value of sustainable water commitments extends beyond just securing a company's supply of a key resource.

    This case study highlights the water conservation activities of the FEMSA Foundation and the closely related Monterrey Water Fund, known in Spanish as Fondo de Agua Metropolitano de Monterrey.

Vietnam's Industrialization Ambitions
  • The Case of Vingroup and the Automotive Industry
  • Hong Hiep Le
  • Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    04 February 2020
    Print publication:
    29 January 2019
  • Vietnam has officially admitted its failure to achieve industrialized economy status by 2020. This failure is partly due to its inability to grow a strong local manufacturing base and develop key strategic industries. The participation of Vingroup, the country's largest private conglomerate, in the automotive industry has sparked new hopes for Vietnam's industrialization drive. The company, through its subsidiary Vinfast, aims to become a leading automaker in Southeast Asia with an annual capacity of 500,000 units and a localization ratio of 60 per cent by 2025.Challenges that Vinfast faces include its unproven track record in the industry; the limited size of the national car market; the lack of infrastructure to support car usage in Vietnam; the intense competition from foreign brands; and its initial reliance on imported technologies and know-hows. However, Vinfast enjoys certain advantages in the domestic market, including the large potential of the Vietnamese automotive market; its freedom as a new automaker to define its business strategies without having to deal with legacy issues; Vingroup's sound business and financial performance and its ecosystem; strong support from the Vietnamese government; and nationalist sentiments that will encourage certain Vietnamese customers to choose its products. If Vinfast is successful, it will boost Vietnam's GDP growth and reinvent the country's automotive industry. Its success will also contribute significantly to the realization of Vietnam's industrialization ambitions and bring private actors into the centre stage of the economy. If the company fails, however, it will cause considerable problems for both Vingroup and the Vietnamese economy.

  • Exploring the Trade Potential of the DFTZ for Malaysian SMEs

  • Siew Yean Tham, Andrew Kam Jia Yi
  • Book:
    Exploring the Trade Potential of the DFTZ for Malaysian SMEs
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019, pp vii-viii

  • Summary

    EXECUTIVE SUMMARY

  • • Malaysia established the Digital Free Trade Zone (DFTZ) to facilitate the development of e-commerce and the country's small and medium enterprises’ (SMEs’) exports. The data revealed thus far indicates an increasing number of SMEs coming on board the DFTZ e-commerce platforms.

  • • The publicly disclosed data focus on the value of exports achieved but do not show whether these are from new or existing exporters or whether they are re-exports. They also do not highlight Malaysia's imports through the zone.

  • • The overall trend signals that Malaysia is losing its bilateral revealed comparative advantage in exports to China, as well as an increasing use of imports for exporting to China.

  • • While the DFTZ facilitates both exports and imports, differing standards and customs processes in different export destinations, including China, will require Malaysian SMEs to know and understand the standards and customs processes governing imports in each export destination involved.

  • • Imports are also encouraged by the de minimis rule, which allows duty- and tax-free imports of up to RM800 into Malaysia. Overall, imports can help enhance the competitiveness of Malaysian SMEs, expand choices for Malaysian consumers, as well as facilitate re-exports.

  • • A clearer understanding of the role of DFTZ in facilitating trade will require more detailed data collection, and a closer investigation of the imports going through the zone, and their uses.

  • Vietnam's Industrialization Ambitions: The Case of Vingroup and the Automotive Industry

  • Hong Hiep Le
  • Book:
    Vietnam's Industrialization Ambitions
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    04 February 2020
    Print publication:
    29 January 2019, pp 1-19

  • Summary

    INTRODUCTION

    At its eighth national congress in 1996, the Communist Party of Vietnam (CPV) set the target of turning Vietnam into an industrialized economy by 2020. However, in April 2016, National Assembly Chairwoman Nguyen Thi Kim Ngan acknowledged that Vietnam would not be able to achieve that goal. Documents of the CPV's twelfth national congress in January 2016 also acknowledged this failure. Specifically, the political report of the congress replaced the target of “creating foundations to turn the country into a basically modern and industrialized country by 2020” in the eleventh congress's political report by “creating foundations to turn the country into an effectively modern and industrialized country soon”. The replacement of the deadline “by 2020” with the vague term “soon” reflects the Party's more realistic view of the economy as well as its cautious assessment of the country's industrialization prospects.

    Among the reasons for Vietnam's failure to achieve the goal was its inability to grow a strong local manufacturing base and develop key strategic industries to provide a strong momentum for the country's industrialization. The automotive industry is one of the primary examples. Despite repeated efforts, Vietnam's automotive industry has been based mainly on a handful of assembling facilities, and supporting industries have remained largely undeveloped.

    Recently, Vietnam's hopes for an indigenous automotive industry were rekindled when Vingroup, the country's largest private conglomerate, started in September 2017 the construction of a manufacturing complex in the northern city of Hai Phong and announced plans to develop a national car under the brand of Vinfast. Within a year, Vinfast managed to develop two prototypes, a sedan and a sport utility vehicle (SUV), which debutted with great fanfare at the 2018 Paris Motor Show. The company plans to put its first cars on the market in 2019.

    While it is still too early to tell whether Vinfast will be successful, the way the company is rolling out its strategy, the great potential of the Vietnamese car market, the strong support that the Vietnamese government is lending the company, and the generally positive reception the Vietnamese public has shown for its first models, have all given rise to the hope that Vietnam will eventually be able to develop its own automotive industry. The impetus shown by Vinfast, if sustained, may also become a significant landmark along Vietnam's economic development and industrialization path.

  • Foreword

  • Siew Yean Tham, Andrew Kam Jia Yi
  • Book:
    Exploring the Trade Potential of the DFTZ for Malaysian SMEs
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019, pp v-vi

  • Summary

    The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

    The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

    The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

    THE EDITORS

    Series Chairman:

    Choi Shing Kwok

    Series Editor:

    Ooi Kee Beng

    Editorial Committee:

    Su-Ann Oh

    Daljit Singh

    Francis E. Hutchinson

    Benjamin Loh

Page 57 of 298