Level Of Risk In Vietnam Case Study

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To assess the level of risk in Vietnam, our team will be analysing the country based on the different factors such as its political, legal, financial, as well as economic and social environment.
Vietnam stands at 47 points in terms of the political risk index, with 100 points being perfect. The points garnered by Vietnam presents the country at a high risk level, with political progress in the country, being seriously detrimental to businesses, existing or happening during the predicted period. Extensive political disorders, including prolonged rioting, have a high possibility of taking place regularly.
Although it was mentioned above that the political environment in Vietnam is stable, it only covers the aspect between the Vietnamese government and its relationships with the people and other countries. The good relationship will not present a risk to businesses as the government is not prone to go to war or use violence against its people. This will help avoid hindrances to business operations when wars occur, and when the Vietnamese protest or use other chaotic measures against the government due to the good relationships established.
However, this is not the same for the relationship between the government and other political parties. According to, Vietnam scored 0 points out of 7 points in its terms of the use of restrictive measures to retain power. The low point here means that the ruling power in Vietnam uses coerce to retain its power, which can create rioting when other political parties are unhappy and wish to retaliate. This in turn brings risk to the political environment.
With such a risk present, Vietnam’s political situation stands at an unfavourable position with regards to foreign investments. Prolonged rioti...

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... market opportunities, financial system, and advanced infrastructure. The point is forecasted to go up in the next 1-5 years, up to 48 points, signifying that the situation will stay the same or show very slight improvements in the near future. Several factors, such as the monetary inflation, currency convertibility and fluctuations in exchange rate contributed to the high risk.
In terms of monetary inflation, Vietnam scored 2.0 points out of 1.5 points. This means that the inflation rate in the country is very high, to the point that it exceeds the scale. With such a high inflation rate, businesses will lose out with regards to exports as items will have to priced higher given the fewer goods and services that one unit of a currency can purchase. Consumers will also spend less with their decreased purchasing power, causing businesses to suffer in terms of sales.

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