Indonesia vs Vietnam | Logistics Performance

In this post, I would like to share comparison between Indonesia and Vietnam in term of Logistic performance. All of these information are mostly come from another related website, and discussion.

Quick overview about Vietnam
Vietnam, officially the Socialist Republic of Vietnam (SRV), is the easternmost country on the Indochina Peninsula in Southeast Asia. With an estimated 90.5 million inhabitants as of 2014, it is the world's 13th-most-populous country, and the eighth-most-populous Asian country.
Vietnam was part of Imperial China for over a millennium, from 111 BC to AD 939. The Vietnamese became independent in 939, following the Vietnamese victory in the Battle of Bạch Đằng River. Successive Vietnamese royal dynasties flourished as the nation expanded geographically and politically into Southeast Asia, until the Indochina Peninsula was colonized by the French in the mid-19th century. Following a Japanese occupation in the 1940s, the Vietnamese fought French rule in the First Indochina War, eventually expelling the French in 1954. Thereafter, Vietnam was divided politically into two rival states, North and South Vietnam. Conflict between the two sides intensified, with heavy intervention from the United States, in what is known as the Vietnam War. The war ended with a North Vietnamese victory in 1975.  wiki

After this war, Vietnam's economy had experienced destruction, Vietnam faced an economic crisis, inflation soared to over 700 per cent, economic growth slowed down and export revenues covered only less than the total value of imports.

In 1986, Vietnam began to implement a new economic system called Doi Moi (English: Renovation) is the name given to the economic reforms initiated in Vietnam in 1986 with the goal of creating a "socialist-oriented market economy". wiki2

This system, has successfully led Vietnam to Next Eleven (N-11) countries (identified by Goldman Sachs investment bank and economist Jim O'Neill), which are the countries with high potential and promising outlooks for investment and future growth.

Indonesia vs Vietnam

According to  The World Bank, Vietnam GDP per capita (US$) has, constantly growing up since 2006, which is growing about 6.04% (annual) since 2006 to 2014.
Even though Indonesia has higher GDP than Vietnam, unfortunately Indonesia has experienced slowing economic growth in several years that result 5.71% of GDP growth, which is less than Vietnam.

There many sector which has correlation to the GDP. One of them is logistic sector, which has close connection with infrastructure, logistic competence and bureaucracy. As mentioned in below radar graph which is reported by LPI , logistic infrastructure in Vietnam are better than Indonesia as well as indicator "international shipment".

Export of goods and services is the one factor to determine the number of international shipment. With the area six times larger than Vietnam, export from Indonesia is lower than Vietnam, according to The World Bank shown in below graph. Where, in 2014 export of goods and services from Indonesia is about 23.7% of GDP, while Vietnam is about 84.6% of GDP. 

The reason why it's happening in Indonesia, is due to high labor wages comparing to the GDP of Indonesia which is still low. The other reason is the corruption practice, which is still become a major problem in Indonesia. Comparing with Vietnam, Indonesia is on position 107 of the most corruption country on the world, with score 34, while Vietnam is on position 119, with score 31. 

All of these key indicator effected to the Logistic scorecard where Indonesia ranked 53th out of 160 countries, while Vietnam is on position number 48th.

Conclusion ;
as a new country that just reach their independence in 1975, Vietnam is able to evolve and have good logistic performance, while Indonesia still need to fix their economic and bureaucracy system, to avoid any corruption practice, which indeed slowing down the economic growth..
Indonesia vs Vietnam | Logistics Performance Indonesia vs Vietnam | Logistics Performance Reviewed by Denny Trisna on 6:15 PM Rating: 5


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