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AN ANALYSIS OF PRACTICAL ECONOMIC POLICIES to generate economic growth in Vietnam

The following is an objective view and a factual analysis of issues that influence economic growth in a nation. It is intended to provide a comparison of the strength, the weakness or the mistakes in forming economic and social policies. If policy mistakes can ruin the growth of a large nation or a large corporation, they can cause worse losses in smaller nations and smaller companies.

ECONOMIC POLICIES of the US, CHINA, JAPAN and WHAT WE SHOULD AND SHOULD NOT LEARN FROM THEM

The industrialization of the 50s, and computerization age of the late 80s were instrumental to economic growth of nations; The internet and communication explosion since the mid 90s have revolutionized world economy and also erased certain political  and industrial barriers among nations. In the process, it globalizes, relocates and redistributes economic strength outside of leading nations. This tells us that a nation and its private corporations must be dynamic to revolve and adapt to changes. Japan, Korea, Taiwan continue to adapt to challenges despite strong imitations and competition from China, whereas US government/corporate policies, American culture and their blind disregards for their own country have created built-in cemeteries for their own industries. Without doubts, this is a great loss for their nation and especially for so many smart and hardworking Americans - Not the corporations because they are just greed monsters and could not care less if they sell out their own children and parents for the profit of their corporations, let alone their country... Therefore, knowing where and how economic changes can influence a country and companies, we can formulate economic plans and strategies. But to adapt to changes, we have to leave behind certain lifestyles, mentality or theories. This applies to any nations including the US or China. The exposure of economic weaknesses in US industries have revealed many problems in US policies and practices: Overburden legalisms, outdated ideology, cumbersome, over-departmentalized, fragmented organization and a failing impersonal or dehumanization mentality. Meanwhile individuals become more subjective, egotistic, self-willed, single dimensional, overly dependent on evidentiary matters, more interest in internal solving procedures than solving root causes. This weakens their mental vision and strength to make intelligent economic or even political decisions/policies.

One of the greatest unfortunate problems with economic planners in the US is that they still think that Keynesian-style central policies relating to the pillars of an economy, namely financial, taxation, investment, etc. can improve the economy. No matter how good or bad central policies are, the determinants of one's economy based on the nation's economic production factors such as products, productivity, competitiveness, cost-control, marketability, engineering and management. US economic planning is not only weak, impractical, it's full of internal conflicts and that the strength of its productivity and competitiveness globally is weakened by its own governments in many forms: Regulatory burdens, poor labor quality/mentality, cumbersome legalistic mechanisms, to name a few. The time when military and political cloud that sell products is long gone. Products and services generate customers and income - not politics. They need to focus on the basics: The perpetuation of quality products and services, product competitiveness via innovations, engineering, cost control, marketing planning and cooperation, etc.

To illustrate our view, we first will use some business examples from a few world-wide corporations. Then, we will discuss how economic and social policies may generate growth in one's economy or may weaken their own economic future.  Each case study below reveals specific problems in business or  economic models and strategies that we must learn to improve from.

 Case Study 1: DHL, UPS in CHINA

 Case Study 2: Why EBAY will fail?

DHL, UPS came to China in early 2000. DHL of Germany and UPS of US, both are with the highest technology in logistics, distribution and shipping. Tapping into the China seemed to be an easy target and both companies were excited. They planned to make lots of money from the Chinese while operation costs are 1/3 of the US. They both set up extensive offices in 2002; Within 5 years, they close 2/3 of these offices. Why? Reason #1: They apply the capitalists' idea of EXPLOITATION by MAXIMIZATION of charges too fast and never think of tomorrow; Reason #2: They apply the "IMPERSONAL" and "UNFRIENDLY BUSINESS-LIKE" style and this attitude is not welcome by Asians. Reason 3: UPS uses too much strict rationality and mechanistic legalism in the typical US business style which do not work well with Chinese... Within 5 years, the Chinese copied the same style of DHL, UPS and charge 1/2 the price and are ready to expand... They work harder and replaced  that impersonal business style of the West with more personable Asian style: Kind-hearted, personable, flexible, accommodating and customers are much happier! DHL lost not only their setup investment, they also lost the  entire Business Plan to the China.

We must learn that  #1: One cannot be greedy. We must think with the mind of the nation you work for and not your own. #2 "Eat a little less, last longer; Eat too fast, Die early" and #3: No matter how professional we are, we deal with humans, we must learn to hide our arrogance or complacence and never assume that others are stupid.

EBAY is an great success in internet commerce,  a simple idea taking advantage of Americans who like the convenience and excitement of an "auction." EBAY make millions from just a website and a lot of web developers. As business grew until mid 2000s, immediately, executives  took millions in salary including CEO, Meg Whitman. Once making money, EBAY started to "departmentalize" and sub-contract so they work less. This is wrong. The more business we do, the more people we hire and not to sub-contract  to work less. Another growing problem is their service. Americans are very bad with services because they grow up and taught not to serve anybody including their parents. The more money they make, the less they want to work. The "departmentalization" style insulates and multiplies mistakes while help each dept. to blame one another for problems instead of solving them..."ALI EXPRESS" a "CHINESE EBAY"  is building itself with highly educated Chinese engineers and will seek to overthrow EBAY within a few years as EBAY income continues to decline at a quick pace. What a shame for the staff, workers at EBAY and for Americans.

No matter how big we are, never assume to be big and must continue to improve services, technology, accept responsibilities, mistakes and be better. Our services improve with more income - not less. Learn more wisdom for more business - not more gimmicks to make more. This is why US companies cannot maintain customers. Their management style from the "division of labor" theory is too old for modern economy and must be changed.

 Case Study 3: Why CALIFORNIA gov fails?

 Case Study 4: Why US Post Office fails?

California was the  richest State with agriculture, medicine,  technology from 1995 to 2005. Instead of building and saving, they turned arrogant, wasteful, care free with people's money. In a less than 5 years, from the richest State to a State that owes billions; Some agriculture moved out to MX, AZ...Electronics moved overseas. 30%  moved out, 25% simply closed, another 35% shut down their manufacturing in CA. CA had  the HIGHEST unemployment in the US at 12.5% (2010). Why industries don't want  or can't stay in California?

Problem #1: WRONGFUL policies and mentality. Businesses are treated as children to scold and scare, enemies to punish or slaves to exploit in every  thinkable ways with too many laws and procedures making it stressful and costly for people to work. Problem #2: IMPERSONAL AND IRRESPONSIBLE SERVICE. Management system is so old, bureaucratic with  little care about their own people while executives swindles millions and wasted in slavish lifestyles...

Government policies can affect businesses anywhere no matter how strong that nation is. The dichotomy is: If one treats customers like an animal, customers must go away or die. It's acceptable to be capitalistic but not being stupid. Why CHINA supports millions of business and US cannot? As government, we must learn to respect and support business so they can pay  the tax we need to service people. We cannot treat people as animals. This mentality must change.

Governments have the responsibility and power to maintain laws and order but never an adversary with their own people. They must support, respect businesses as partners to receive more tax to work. But if they just regulate, harass, intimidate, business cannot grow and the economy must deteriorate. Government should not weaken businesses in the name of governance and ideology. This is stupid and dangerous for their nation and their own people

US Postal Service case can provide lights into some unique problems of any customer service organization. First no matter how large and how much money, when (1) a company has no product strategies (2) too slow to change (3) Management without industrial knowledge, too selfish to change (4) no internal cost-effective comprehensive product planning, etc. it will cost a lot of money and still fail.

To improve,  they must always think ahead and plan our strategies for products & services; must be dynamic and adaptive to change; get rid of the heavy management and laws  that make workers and managers lazy; Retrain managers with modern industrial skills, to be straight, strict and clear on cost management, to focus on substances and not procedures, to manage with performance or experience and get rid of this seniority system.

Just like running a store, all items or services must be evaluated on the basis of profitability; all spending must be based on productivity, efficiency; Purchasing must base on realistic sale results and not on procedures or regulations Even if an organization is a government one, to thrive in modern economy, we must operate as a system with accountability, cost-results and performance. Last of all, we must be discipline and detailed in our planning and strategies and also must improve on our customer service: To be smart, personable and not procedural, cold-blooded with customers when we are a customer-based business.

The larger the organization, the more items we service, the more comprehensive and effective our management has to be; We must be dynamic and ready to adapt and change; Each products must be prudently planned, analyzed for results.

 Other cases: FEDEX VN, Vietnam's Basa and Dragon Fruits, Chinese chemical use...

CASE 1 FEDEX and DHL IN VIETNAM are currently operating in VN but they are following exactly the CHINA mistake and still did not change: (1) Rates are calculated at their own profit formula without analyzing the facts (2) Work system is mechanical, impersonal, procedural and inflexible - not suitable for ASIANS especially with Vietnamese who are used to changes, unclear and imprecise working manners (3)  Marketing is based on exploitation model (meaning to create various pricing brackets and charging as much as possible for  those urgent packages, etc). This creates a false market pricing that generate copycats locally sooner or later like the China example.... There are more issues but space is limited to discuss.

CASE 2: Current Dragon Fruits export from VN. We export some "dragon fruits" to the US but not successful. Why? (1) Growing technology and processing are not adequate to have a shelf-life quality upon distribution; (2) The Wholesale system used now is simply bad: Exporter buys as low as possible and sell as high as possible and (3) Exporter works independently and do not support growers to improve; At times would intentionally create situations that growers cannot sell to even drive down buying prices, as a result, growers do not have money to improve. As a result, when growers find out of higher selling prices, etc distrusts, conflicts and even tricks started to be used... This buy-sell for profit mentality does not support export, not smart and will not help Vietnamese growers to improve their products thus lower our competitiveness. The same practice also used for other products, which causes a lot of limitations in growth. We must change such old buy-sell style. This is why we at VINAREX must organize to assist both exporters and growers to improve their working method and process, not only for dragon fruits but also other export products and related issues.

CASE 3: BASA  issue in 2005-2006. While Vietnamese exporters claimed "discrimination" by US catfish growers, it is correct only 10%.  At issue: The fish variety grown in VN should not be called "catfish." For international commerce, HTS descriptions must be precise and correct. VN exporters used the term to sell to Vietnamese in the US. When US customs rejected it, VN exporters misrepresent US customs with other causes such as "discriminations" but in fact we ourselves were dishonest. The Chinese also shipped under other fake names such as "sole fillet", etc. This is deception and illegal. If other nations fake any products to Vietnam, we will have to "discriminate" exactly the same.

CASE 4: Current Aquaculture Problems. Modern agriculture and industry must be carried out correctly, scientifically and methodically. Aquaculture is even more precise and demanding. We cannot continue to use Chinese antibiotics and other hormone stimulants while not carefully planned or grown the fish. Vietnam is facing serious issues with parasites and other abnormalities in their fish, shrimps from our careless practices in aquaculture. Today's scientific world, contamination info can be revealed and once revealed it will cost us a lot of business.

CASE 5: Other issues with China's agricultural products that we must not copy (1) Massive use of sweeteners, antibiotics and deceiving ads in Chinese honey (2) Indiscriminate use of pharmaceuticals, growth hormones and antibiotics in produce items (3) Undisclosed overdose of preservatives, coloring, taste-enhancement agents in food...All of these practices are illegal, detrimental to people's health and cause other honest farmers or other companies their crops or products and also create a bad name for the entire nation. China can afford a bad name but VIETNAM cannot.

 A.  Economic Planning Variables:  EXTERNAL ECONOMIC FACTORS INFLUENCING INDUSTRIAL GROWTH

This section will discuss the external fundamental economic policies that directly influence the well being of private companies in a nation. Every business needs organization, methodology, system, technology, material, resources, labor, cost and management, etc. but if private companies and their strength are not supported by the society and the government, they will never be successful. This is exactly the problem with the US for most US companies. They have to operate with many external factors that are unfavorable to business growth: Wasteful and crazy government regulations, costly and deceptive professional services, too many added services and requirements (from the old "division of labor" philosophy), etc. When businesses must operate with too many variables, problems, requirements for every simple event, the entire economic engine is too heavy to run and too slow to adapt to new changes around the World. This is largely the results of a cumbersome legalistic society designed to generate conflicts and problems to feed an infatuated and fragmented legal and government machineries. Legality is a necessity for an orderly and respectful work process but must be used to support business growth and not to hinder business or production. These external factors have rendered many great US companies and entrepreneurs defenseless against new and cheaper competitions around the World. We must learn these lessons and plan our society better and avoid these problems if we want economic growth.

1) Policies to lower Production Cost for people

Problems with bad policies

What we can do to induce economic growth

Material costs are influenced by the  external economic institutions and government policies. In the US, these external factors adds as much as 40% to the cost. But to cut costs by reducing materials leads to quality decrease. This is a big problem in the US. To support businesses, we must determine, select supportive policies, get rid of cost-creating ones so we don't add unnecessary burdens on business. We also must change the mentality that we must exploit businesses on the basis of "supply-demand." This mentality will backfire sooner or later on that nation's economy.

1) Local governments in the US created excessive laws to harass and punish their own people for money and arrogance without supporting them. This is why it adds to production cost

It is not the min. wage but added regulations for every thinkable matter that add cost, weight down the work process, slow productivity and increase cost; We can increase min. wage but get rid of unnecessary rules

2) When all segments of businesses and professional services are not done as a service but more as an exploitation for money, sooner or later  such nation will be weakened

We must change this working method. It is unproductive. When there are money to make, it is acceptable but as the profit distribution comes to a limit, societies with mutual exploitation economy shrinks or slow down with bankruptcy increases.

3) Real Estate and support professional  services are too high and forced costs to grow. Rent must be at 10-15%; Services +Transport under 15%  for viable business.

Real Estate values provide instant money for development but also raise living cost, hardships for the poor and high rents. All are negative for industrial growth. It must be planned with COMPENSATION, preservation  strategies for agricultural and industrial land + rent control for industries and people.

4) Control all matters that affect materials, supplies, utilities, equipment, transportation and operating cost for business

To support businesses, we must make an effort to study each cost matters and devise the right policies or regulations for them. We cannot grow businesses when we create laws that make business suffers.

Codification of the administrative laws are useful but when rules only impose limits and obstacles on business as a principle of "supply-demand," business will naturally never grow. They added operating costs, add burden to management and make workers less productive, care free and even stupid as the system does not encourage workers to work, does not allow managers to expand but to follow. We must ask ourselves whether economic growth and money for the people are important or the set of administrative laws are more important? Vietnam begins to show similar patterns of mistakes made in the US. China is far better as local government can change its own rules and central government are fast to accept changes to facilitate economic growth. They don't need to be lawyers but just smarter law makers. We cannot control all factors that influence economic strength of businesses but we can design policies or plans not to impose costs and restrictions on business growth by (1) Flexible and realistic rules (2) Control costs via selection and prioritization of rules applications; (3) Built-in mechanisms for changes and exceptions but strict enforcements to deter abuses.

2) Policies to control the cost of living to business growth

Cost of living will ruin any economic growth

What we can do to induce economic growth

This is a fallacy of Western economic theories. We agree to the essence of a market  economy but only to the extent that it is productive and not creates more poverty to people while enrich only a small few. When Western economic theories allow corporate greed to charge "market" prices, this naturally induces higher cost. We must analyze costs of living and create strategies to influence changes - not just let certain groups to influence prices. We must keep Cost of Living at the tolerable level with expendable income to induce economic growth. When is is pushed to over the limit of expendable income, the nation's "strength" is superficial and weak.

1) Inability to control essential fixed costs with semi-monopoly or lacking of diversity in supply and in consumption segment

Essential commodities are harder but not impossible by creating "balancing measures" such as: Create reserves of gas; Introduce diversity of consumption (electric bikes...) Set a Max price level; Encourage more distributions, reduces transport cost by allowing more transport means...

2) Inadequate info system and allowance of wholesale price index to rise on its own

Improve info system, improve transport movements, encourage or even subsidize supply of certain commodity can control wholesale prices.

3) Inflation pressures + unreal salary levels of management + too many speculative business types in the market (real estate, gold, currency...)

Inflation pressures can be controlled; High salary levels can be controlled and speculative businesses are also controllable at least by "adjustment valves" and better planning.

3) Uncontrolled food cost other monthly expenses (utilities, garbage, etc.) from lacking of suppliers.

We must constantly monitor, study, analyze the markets using computer software to maintain people's fix expenses at 25-50% of expendable income. If higher, we must act on it by support supply or limit fixed costs.

If one chooses to imitate capitalistic forms of market economy, we must control living cost to a reasonable level against inflation (under 9%) and expendable income ( over 30%); food + fixed monthly cost to under 25%; When US policy makers and economic planners induced economic stimulations that pushed cost of living at over 75% with the housing balloons (which benefits only those with real estates, who are mostly the richer),  their economy went into recession and the real estate market burst. This is an example of the failure of the Keynesian economic models that we should not follow. If real estate is allowed to increase out of control, we must place other factors in place to support such growth (cost of living and personal income, environment, infrastructure); We must do it in a prudent manner via a smarter urban plan. In our opinion, economic growth must comes BEFORE or CONCURRENT real estate growth; To do it in reverse, the only people benefits are whose with properties and related means (which is under 10%) and this simply means that 10% of the population makes money at the sacrifice of 90% of those who have nothing and that we intend to have the property owners to be the determinants and controller of the economy. This kind of economy will not grow, cannot be strengthened and will not benefit the mass, the poor and the professionals.

3) What development policies are positive for growth?

Positive influences on development

What we can do to induce economic growth

For poor nations with limited resources, to induce growth, central policy planning is still necessary but must be crafted to promote economic growth for the working population and not just to make a selective group in similar fashion with US.  We believe in "engaging economic planning" and strategies and not "let the market dictate our growth" as this is merely the way of capitalistic groups to exclude government policies so they can be free to manipulate the markets for their own profit. Their only aim is exploitation of any economic assets of others.

1) Organized, efficient, functional and stable public institutions: Administrative, industrial-professional-economic supports - Education, Transport, Trade, Criminal Justice, Monetary-Banking + Taxing, government services...

Stabilization of public institutions, services and especially institutions like education, banking, taxing, currency, etc are essential to industrial growth. To do so, government policy, staff, rules must be supportive of growth and not becoming the obstacles to growth like in the US. We must reverse this trend.

2) Well organized government with a strong, clear and realistic economic plans. Stronger Research & Development agencies and plans to encourage more advancements

Economic planning is still much more useful rather than let is be dictated by the markets after the fact. This model enriches only the wealthy. R&D efforts must be modernized management without outdated styles in Asia or the lazy style in the West.

3) Removal of all negative policies that inhibit growth or new businesses; those that increase costs, limit access to industrial means such as equipments, machines, vehicles, etc.

We must also review each policy from all aspects remove all obstacles. Must be take some chances to let people thrive but be ready to prosecute ONLY abuses that are contrary to industrial growth such as those related to problems 1 and 2 above.

4) Wisdom in the development and writing of industrial-economic codes; minimize wastes and costs on businesses but actively create policies for better 1 and 2 above.

Regulations are useful but again, procedures are the means and not the end of the economy. Over-regulation costs money, time and hard to change. We must introduce new measures to encourage open enterprising plans and inhibit only when it is a criminal, environmental and political problem.

Industrial development policies seem hard but actually not. It's easy when we plan just for a certain segment or sectors or the economy with money and other economic means; but it is certainly harder when we plan for the majority of the population that have neither money or other strength. But this is what economy is all about. It is NOT about the people who already have money as they don't need to be richer but for the mass population who have nothing. We can develop the right policies that encourage important paths such as: Enterprises, innovation, labor productivity, research and education,  and other policies that support the mass populations and not just some groups...

4) Urbanization & Economic Strength

Urbanization methodically

What we can do to induce economic growth

Urban development is necessary but must be done with scientific and  sensible planning with concurrent improvements in  infrastructural and environment.. We also must not sacrifice future production economy: INDUSTRY, AGRICULTURE, EDUCATION. These are what a strong nation needs - not just nice homes for the rich. Real estate values and tall buildings are great but made for a consumption economy of  those with money. It effects only 3 to 5 % of the people of Vietnam. It's the slavish and enjoyable social life for the rich enjoys but the poor will only continue to live in darkness,  to live with garbage and disease in rural countryside.

1) Urbanization is not just to build houses but to preserves natural resources, set up infrastructure, improve environment and protect industrial and agricultural production.

2) Urbanization plan can be manipulated lead to uncontrolled problems in the infrastructure and environment.

3) Urbanization plan must be made a part of economic development plan for the mass and not just to urbanize for real estate values for some. Economic developments must include sufficient plans for industry, business, agriculture

4) Urbanization to preserve  businesses, schools, and family living. It must also limit the imports of bad values from Western nations as being done in China, Thailand, to protect and enhance national cultures, values of the people.

Master plan to preserve natural resources, other assets and to maintain future industrial, business, agricultural growth is not hard to do when we are serious in doing it. Urbanization cannot be made by itself but with planned infrastructure and the habitat. This is beneficial for both the rich and the poor.

This is common in Vietnam and that our urbanized plans continue to serve developments for various groups  and cannot support any economic growth for the mass. It also generates more increase in rent costs to businesses, homes. We can improve by proper and careful urbanization that support businesses, protect environment and industries.

When urbanization are planned by professionals, it supports economic growth. Space is too limited here to discuss about urbanization but there are strategies to soften economic and housing impacts but these must be planned objectively for the interests of all groups especially businesses, industry and agriculture.

In both the US and Vietnam, developments are to serve mostly land owners with political ties and as a result, developments become politicized, costly for both businesses and people. We do not need to copy the US in this regards to lessen the hardships on the poor. US property system is designed to be manipulated for speculative growth. This model can be detrimental to business and industries

Urban development by definition is to facilitate both societal and economic growth. However, man's relentless pursuits of profits for his own have turned urbanization into an economic plan to enrich himself at the sacrifice of the poor, of nature and of the long term interests of the economy. One's economy cannot be defined as the growth for the wealthy but the growth for the MAJORITY of the people. Such urbanization will create casualties for future generations and will continue to weaken the mass population to grow and the poor to survive. And when the majority of the population is weak, that nation is not strong. This is the case now for many nations including the US, France.

5) The importance of Industrial Research & Mass Education

Very important in many ways What we can do to induce economic growth

This is self-explanatory. Japan, China, Korea governments always emphasize on R&D work and Education. These areas are weak in the US and Vietnam. But R&D in US are done by private firms whereas private firms in Vietnam are lacking of money to do so on their own. As a nation behind in progress, we must advance our industrial R&D faster and develop a stronger, more modernized higher education with more substance rather than words.

1) Industrial research is necessary for economic growth. Lacking of it will bring a nation down faster. US private companies do their own research and this way costs more and slower.

Our scientific research must be directed towards realistic future production industries in Vietnam for the larger population and not just for industries or developments that 5% of the rich wants to do. This is evident in the downfall of US industries: It is not that there is not enough jobs, there are many industrial and professional jobs but US work force is not able to do.

2) Mass education is necessary  for high quality work force. Vietnam is with a high % of HS students could not go to college due to high cost and this is not a good sign for an industrialized nation.

Education for the vast majority of the young Vietnamese must be improved, cost less and with more equipments and support so young people can learn. We cannot grow an industrialized nation when the 90% of the population with only some High School education. VINAREX will actively work with others to improve this ratio.

3) Industrial research in Vietnam must be done on selective subject areas relevant to future industries  such as civil engineering, infrastructure, environment, agriculture.

Limited with resources, we must devote our research and development on relevant industries - meaning industries that we can and will develop for VN in the near future - not industries geared to widen the socio-economic strata among Vietnamese.

4) We also must devise plans to make HS and University cost lower  to poorer students have a chance and not just for those with money.

As discussed, VINAREX plans to develop a wide range of practical vocational training for the large High School Vietnamese and prepare them for practical industries in the near future so they don't have to work for so cheap at foreign factories and contribute effectively to the future of Vietnam.

The above topic requires no further elaborations.

6) Redistribution - Restructure Economic Opportunities

Relative distribution is healthy What we can do to induce economic growth

To enlarge the economic engine, we  must distribute responsibilities or opportunities. Management formula should be the same. Unlike capitalistic models, responsibility and opportunity are retained by private corporations. This will weaken their industries and their economy sooner or later

1) Once we strengthen and enlarge the group, we must slowly provide others with opportunities, responsibility and pride to take part in the economic production. Distribute responsibilities and opportunities is different than division of labor or departmentalization. Opportunity to contribute and not to become individual entity to fight each others.

Distribution of opportunities are being done in both capitalist and non-capitalist nations for expansion of middle-class income/group as it is unrealistic for government to carry the industrialization process. Recent economic downfalls in the US partially because instead of "redistribute," corporations shift production overseas for even more profit and less work; This adds short term profits but will distribute opportunities overseas; As industries get more global, the less US will distribute growth to their own people and eventually weaken their own economy .  The Chinese do not copy this stupid move from the US. O the contrary, they go overseas to take opportunities away from that nation and bring back to their nation by creating joint-ventures, developments, etc. This is a much smarter move.

The US in the 70s to 90s was with a large middle class, unemployment was 7%. To gradually minimize social gap and a widen the middle class is a good economic goal for all nations including Vietnam. We must provide the lower class people more opportunities  to succeed. Only then Vietnam as a nation can be stronger.

2) Managers alone, no matter how strong, cannot make a company strong; nor the top 5% of the nation can make a nation strong. We must enlarge the opportunities and distribute them to a larger population in order to build up a production-based economy. This is the best and only way for Vietnam to become a respectable nation in Asia.

Distribution of opportunities may appear is transferring certain economic chances to the public in various forms. By creating a larger economic force with more productive population, the economy can expand. But we have to know where, when and how to distribute so that certain geography or occupation groups are benefited from the process. Distribution of opportunities is also a socially meaningful and better governing strategies than "selective distribution" of wealth or power among a single group. This will not grow the economy the same way capitalists move their assets overseas for their own profit thus weaken their own nation in the process.

7) Selective wage stimulation policies

The detriments of endless wage to labor quality and economy

What we can do to induce economic growth

With a wide socio-economic gap, high inflation, unstable food supply,  dramatic increase of business rents, etc, any increase in wage will trigger a rise in living cost. But wage is so low in VN for most workers so to solve this dilemma, we can increase wage selectively &  indirectly by (1) Expand industries while increase labor training but also (2) Expand education opportunity at the mid-management level so less wage increase at this level  (3) Increase minimum for ONLY the low end level.

This SELECTIVE and INDIRECT policy will not pressure inflation while serving other important economic objectives: (1) Increase wage for the poor but not for mid-level (2) Maintain low cost of living (3) Discourage  increase in the high-income labor that do nothing for the economy but to cause problems to our labor market, inflation, and further widen social gaps and social class that will incubate social unrest, resentment and crimes.

Vietnam is facing problematic labor and wage policy. On the one hand, rich families with better educated members continue to occupy extremely high wage, while government-induced urbanization has drastically cause a saddening socio-economic gap with the poor, but we must find ways to increase wages for the poor because the low level wage is too low while the rich is too rich (by the ability to control the means of production, real estate and financial sources); If we do not do anything and let inflation eats away what little wage the poor can make, we are dis-service people and will cause social discontent. Our suggestion herein to selectively influence controlling wage on the top labor and increase wages for the poor, we will solve certain problems for the poor yet do not increase the cost of living, inflation, etc.

The strength of a nation cannot be realized when the majority of assets, opportunities are controlled by less than 5% of the population. Such a small percentage is not enough to strengthen a nation. We have to create and widen a stronger middle class by distribution of opportunities or induce economic productivity of at least 40% of the population by providing opportunities and training for them to be stronger and to contribute to the nation. This means that 90% of Vietnam's GDP must be produced by at least 35 to 40% of the population. To restructure and distribute opportunities to a larger group is not just a good social policy, it is good economic strategy. Let's use the example of the US: For so many years now, resources are accumulated in the hands of a few. Now they cannot maintain their industries because they never wanted lower class people to gain control. As a result, their industries are weaken and transferred to other nations including China and India. To redistribute opportunities is an old but effective economic strategy to strengthen society. But to sell industrial and economic strength to other nations to achieve political ends is to build more cemeteries for the US or for your own people.

 B.  CORPORATE ECONOMIC DECISIONS THAT WILL INFLUENCE THE NATIONAL ECONOMIC INTEREST AND THE LIFE OF OTHERS

Previous section discussed how external influences such as government policies, societal norms, culture and mentality may affect the collective business growth or failure of a country, this section will examine the opposite: What are the strategies and decision that private companies do that may influence or effect the growth of a nation? First, except for a very small number of nations in Africa and South America, most nations are operating in a relatively free economic enterprises with products and services are more or less owned by private parties. To a large or small extent, what private corporations do greatly influence the lives of the people, the strength of the collective economy and/or the strength of that nation. China, Japan, Sweden, US, or Vietnam, etc. They are not strong because of the government but because of the combined strength of thousands or millions or individuals and businesses. Some corporations such as Microsoft, Google, Boeing, Mitsubishi, Toyota, etc. not only strengthen their own nation, they influence and bring modernization to the world with their excellent technology and advancements. In an interdependent societies, what we do can change many human lives in either positive or negative ways. Conversely, a few controlling companies in a nation can lead that nation to glory or to hell. What are the decisions or strategies we as private business must choose to do to enhance the strength of our nation?

1) Profit Marking Decision

Maximum profit? What is the right pricing strategy?

How can such private decision influence the nation?

A) DOMESTIC MARKET PRICE for NECESSITY PRODUCTS OR SERVICES: In our opinion, maximized profit in disregards of the affordability of the customers both irresponsible and not a good strategy for the business as well as for the nation in long term growth. It generates pressures on others to increase cost, prices and damaging to the nations' economy. This model is useful for richer nations but make the poor nations poorer.

Capitalistic philosophy wants a maximized profit consumers can bear. This doctrine is not longer valid in strong economic terms and also create hardships for the poor. Examples of failures shown above. Interdependent economic chains lead to increased cost, destructive competitions, weaken the productive population that leads to weaken nation in the long run.

B) MARKET PRICE at AN AFFORDABLE LEVEL of the population as objectively calculated will lead to long term growth. "Affordable level" means the industry-wide acceptable level within 25% of expendable income or comparable % for industrial products or services. For example: Rent to be 10-15% max of revenue; professional service lower than 10% of product cost, loans must max at 25% expendable income..

Near-sighted businessmen argue that profit must be maximized. This is actually NOT smart in modern economic strategy. There are known "affordability" payment level when one seeks loan and this principle applies to all industries. When we price at the "right prices" we creates the market faster, preclude predatory competitions, better pubic relations and better long term results. It is possible to calculate scientifically the % or affordable level based on local income data.

C) AFFORDABLE MARKET %  is different than the real estate "VALUE" pricing. This is where many real estate-based economic strategies are not valid for economic formulation. It is directional, bias, applies to an often inflated perceived values. This system used by real estate professionals are dangerous and should be abolished. It drives up prices, weaken the nation's ability to devote to a product-oriented economy; It also caused hardships to the poorer majority and drive up cost of living across all sectors to weaken business and industry.

As real estate becomes a part of our business life with overnight millionaires, we tend to plan our economic policies based on "VALUE" rather than ACTUAL amount. The mentality of real estate economy can lead to a nation to severe adversity  to other economic sectors and directly weaken our bases for industry, agriculture, manufacturing and even tourism (cost to high to develop). Real Estate is a single most profitable sector but also a dangerous one to the national economy as it can bankrupt the financial sector from the wrongful "value" market.

D) To strengthen the nation's economy for the mass population (not for a small wealthy group), we must encourage a financial and business policy and strategy based on reasonable values of the expendable income of the SPECIFIC population group to whom we serve or sell to. This will lessen pressure on important economic indexes such as inflation, cost-of-living, false market price to be manipulated by bad people and thus de-stabilize our monetary and financial foundations that the mass must depend on to survive.

The risks of allowing too many speculative types of businesses such as real estate, gold, money exchange, commodity, and related  in a nation with smaller GDP can place a lot of pressure on its monetary policy, inflation, cost of living and business operating expenses. All of which are not healthy to industrialize or to support important economic sectors such as small business, wholesale, retail, agriculture and food supply. This is a major problem with Vietnam today.

The topic is one of the most difficult to issue to convince people especially Americans. However, if we look at the failure of international corporations overseas and the weakness of many US industries to compete (unless they shift their productions overseas), we will realize the significance of this strategy. By pricing products or services correctly and specifically for a given industry or business, it is more effective for the products, the company and the nation in many ways. To price as the American style of "market bearability" - maximum exploitation - is unwise, unethical, self-destructive in long term for both the company and the nation . There are scientific and intelligent approach to pricing and it is not "hit and run" type of mentality. It also create credibility problem, distrust and even hatred to the nation whose companies are from.

2) Update our Business Mentality

Everything we do will affects others weaker than us

The old Western economic theories are now obsolete

A)  ECONOMIC THEORIES belong to the past. In today's world economy where profitable interchanging between the 2 nations is most important, it is no longer practical to operate based on old economic theories, political ideologies but WHAT'S FAVORABLE or ACCEPTABLE FOR 2 NATIONS. US are still impractical with political and ideological issues. This will continue to work negatively. We should focus on PRODUCTS, PROFIT AND MUTUAL RESPECT instead. As private company, we also must remove the old mentality of exploitation, manipulation but to respect the trading nations, their customers, their political systems for long term business and friendship.

Today, it is not "Capitalism" vs. "Communism" in international business and we should not attach any ideological needs in doing business. Chinese government does not let ideology mix in with business like the US and correctly so. We all should focus on business, legalities, product and mutual support instead. Nationality and ideology are must be distinctly set aside. We also must not focus on HOW TO BEST CHEAT OR BEAT ANY OTHER NATION IN PRICE but HOW TO BEST COMPETE IN SPECIFICATIONS, QUALITY AND SERVICE first. Nations must have their right to be what they are and so do we. This is a bad habit of US Government in trade negotiation and only add more unnecessary delays to better business.

B) BE A RESPECTABLE AND HONEST PROFESSIONAL: Some of the mistakes made by businessmen that must change. For example: Americans tend to bluff, try to out-talk or even threaten legalities; Vietnamese may quietly resort to tricks or lies; Chinese would be quiet and pretend; Japanese may say yes but may do things differently, etc. All of these old habits must be removed from our mind in doing business. We must adapt the discipline of doing our work professionally and correctly at all times without the use of any of these tricks, lies or pretense.

Most people are easily be dishonest, manipulative, etc for business. This is not effective and an easy way to business suicide. Americans used to be honest but not anymore for many reasons. We should not copy their tricks. We must learn to use knowledge and discipline and maintain the inner strength to be professional, courageous, and determined. International business is one without interfacing so people can be much more tactful with words, tricks and mental manipulations. Knowing the battlefield, there is no reasons to be shaken and no reasons to be dishonest either. Be a honest professional will lead to success farther and wider.

C) PRICE FOR MORE BUSINESS, NOT TO KILL PEOPLE. This is one of the big problems with American business mentality and a shallow economic of thinking and abuse of the  people. Pricing is not to exploit as much as possible first without thinking or long term strategies. It leads to  the eventual loss of competitiveness. This behavior should not be used in both international and domestic business. Pricing is a critical decision that must base from important data, analysis of the payees' side especially when it is your own people and your own economy. An economic matter is not static but process and a circulation of forces. Weakened consumers will weaken both the selling company and the nation itself.

Most  business minds will follow this habit, which caused American to lose much of their businesses in the world; Many Vietnamese like copy this habit and will not be successful; Pricing must be treated as a strategy with careful knowledge of the market and future; It is based on the nation or people to whom we sell and not based on what we think it is worth; "Hit-and-run" tactics will be an end to the business itself sooner or later. For domestic markets, this policy weakens the economic strength of the people and the nation and should not be encouraged. Pricing must be based on (1) Mutual growth support (2) Long term planning (3) Absence of adverse consequences (4) Increase or solidify business first (5) Multiple product plan vs. single plan to make up for low profit - if it is such.

D) WE MUST ADOPT NEW ATTITUDE ABOUT BUSINESS AND OTHERS NATIONS: This may sound like a social relationship slogan but it is one of the best economic strategies business professionals must fully develop. It seems easy but will take some practice to develop. Americans find it most difficult to learn how to be objective, respectful, supportive, scientific and simply honest with trading partners or consumers. Don't need to try to cheat. Be factual, respectful and always well-mannered. With a new attitude, one will find that everything we do with others and for others will begin to change from within. Such attitude is an effective long term economic strategy whereas all contrary attitudes will create nothing but disrespect even hatred from our customers, who will eventually find ways to bring us down for good.

Westerners, especially Americans are hardly taught in school or at home to be thoughtful in their mind and their attitude about others especially when doing businesses. Everywhere they go, they are care less about others. Inner good thought and outer display of mannerism, styles and language are critical in business internationally and domestically. They prepare us to be better person and better businessmen in all situations: When we are right or when we are wrong, people will always respect us and cooperate with us. They never want to harm "good people" as they know it. This is a simple but a cost-less economic and social strategy one can buy. Without it, no matter how nice or how smart we are, one will cultivate latent or open enemies. Once we are able to get rid of such mentality, we will begin to see a new formed respect and support by others without costing us much.

Modern world-connected economy continues to show us that we must change our mentality, change our ways of doing business and our views of other people and other nations. No longer should one country seeks to use its glamour and arrogance to impose and manipulate the people and the system of other nations but to be open, honest, respectful and supportive of the customers or of the nation in a professional manner. No single economic theory or ideology proves to be valid and the US doctrine that "to make a small wealthier group wealthier so that the nation can benefit" or the capitalist is no more than a business tactic to weaken the nation for their personal interest.

3) More comprehensive planning strategies

Higher technology means more details - not less

How can I plan to better prepared for the future?

A) WORKING WITH PRODUCT SPECS, PRECISE LANGUAGE AND CLEAR DETAILS - NOT SLOGANS, NOT PRETENSE AND MANIPULATION. The sign of decline or weakness of an industry or business is the use of manipulative but dishonest languages or behaviors. These are known in VN and even US and with similarities in human behavior. Dealing with product specs, using precise language with clear details are the best. With our without the sales, we already obtained the respect, reputation. And this does not cost any extra marketing.

Within the business groups,  these problems persist once their economy weakens. But to rebuild our industrial foundation, we must rebuild our behavior at the same time. It's not hard to be clear, honest, professional by learning to deal or market over specifications and quality details. In our information world, this takes less time and less marketing cost. Ironically, this problem is well-known in either very modern nations such as the US and very undeveloped nations such as Africa. The only difference is the level of sophistication. This means that it is much harder to detect in modern nations than poor ones as these crooks are a lot smarter.

B) NO MORE HIDDEN FORMULA, NOT HIDDEN CHEMICALS, AND NO COUNTERFEITS. Dishonest operations will not last long. The use of dishonest schemes above are cheap tactics that will ruin the nation and the industry.

This problem is more prevailing in developing countries. Counterfeits, hidden chemicals, cover-ups and other fake approach to business must not be attempted and that government must actively prosecute these illegal acts fully for the protection of the people and the national interests. These illegal acts bring very little benefit but cause long term problems to the nation.

C) EVERY PRODUCT OR SERVICE MUST BE CUSTOM PLANNED WITH ITS OWN STRATEGIES AND OBJECTIVES. Once policy and objectives are set, we have to learn to treat every small items with a build-in strategy, cost-efficient mechanism then inter-relate all of product lines into a comprehensive system with clear and effective working processes. Planning starts from the bottom and foundations - No longer from the top only.

Conventional planning is "top-down" and leaving individual dept. to plan each item. This must be changed. The better method is that 1st,  Top Management prepares objectives and design product/service layout; 2nd, individual dept must plan each item/service to meet objectives; 3rd, both management levels to set up execution plans and strategies. Comprehensive approach is necessary today.

D) CREATING A 3-DIMENSIONAL MAP OF YOUR PRODUCTS, SERVICES AND COMPANY: Most companies are over-confident at the beginning and choose not to create, visualize and plan a 3-D model for themselves. A 3-D map visualizes the processes, relationships and moves or changes we can or must make to develop our products or services. Managers and supervisors must be accessed to it so they know how the internal mechanisms operate therefore making better decisions in times of problems. This save time and money for the company.

Creating a 3-D image of your INTERNAL PROCESSES of how each product or service means to your company (if yours is a product company) or how each office and department inter-relate to each others (if your company is a customer service or government service one). Next, create a hypothetical event or occurrence to one of the product or department and see how the chain reactions took place. This management or operation model will help us to organize and adapt to changes or services and thereby improve ourselves. This will be useful for today's economy.

Traditionally planning starts from the top and execution will be made at the line level to meet objectives set by the top. This should be changed in modern time. Planning from the top may involve only a framework, principles and objectives. The mechanism and process may also be installed but in today's economy, to be successful, each individual department, product/service must also be comprehensively examined and planned. The lacking of planning at this level caused a big organizations such as US Postal Service, EBAY and even DHL , TNT and UPS failed in some of their operations.

4) Creation of a "Safety Net"

Worst-case Scenario Planning

How safety nets can be created without costing money

A) Creating a Worst Case Situation and pre-set planning parameters based on such case to test your own financial capability and management structure

In today's economy for US, VIETNAM or others, with faster movements and with much easier interference or competitions by others, worst case planning should be in place. It is an assumption and test of our financial and management skills and strategies to withstand such event. Remedial parameters may vary and space is limited to discuss details here. Your company must be able to withstand such event and to carry out successful alternatives.

B) Creating Contingency Plan based on such Worst Case Scenario: Finance and Management changes: Creation of a SAFETY NET plan

Secondly, during such event, what will be the changes in financing and management we must face? Whenever possible, a SAFETY NET plan must be in place and with some anticipatory tests for feasibility of such plan.

C) What is Worst Case Scenarios for Agricultural Crops considering certain degrees of high risk in natural disaster?

Agricultural crops are a harder to plan but it is NOT impossible. Details were already discussed in our previous chapters. In summary, it is c combination of (1) Support by products (2) Other crops within our VINAREX agricultural cooperative (3) Crop insurance (4) Better technical planning and preparation, etc.

SAFETY NET planning of possible worst case scenario is necessary in today's economy and must be done above and beyond other precautionary measures by creating other alternate income sources, other support plans.

5) New Approach to Cost Control Planning

Create and be creative - Not cutting products or services

Why this approach to cost control is better than to trim works, to trim services and to trim workers?

A) POSITIVE ENFORCEMENT CONTROL METHOD: Cost control not by cutting staff or services but by creating additional support or contingency income-producing operations (no matter how small) to make up for increased cost.

Typical US companies will cut cost via PRODUCT QUALITY REDUCTION or CUTTING SERVICES, etc. These are a wrong approach to the problem. We would advocate the cost cutting method by CREATING ADDED INCOME via OTHER businesses or services that do not require added investments. This is a smarter move  because (a) If no cost cutting needed, we receive added income (b) If cost cutting needed, we use these added income to cover without cutting product quality or services

B) Cost control via CONTINUOUS MARKET EXPANSION PLAN and not by cutting workers.

Typical US companies will cut workers and Vietnamese companies will tell workers to work for less. Both approach will cause problems. We  suggest that companies to start to expand marketing either VERTICALLY (with other support products) or HORIZONTALLY (export to other nations, etc)

C) Cost Control via ORGANIZATIONAL NETWORKING, SOFTWARE and TRAINING and not by cutting materials, workers or products

Modern economic management also requires us to change how we organize, network and smart development of software to cut cost. Effective networking by combining resources, group services and better planning to achieve efficiency. In the absence of an existing group, we must develop cooperation with outside organizations or effective use of remote/internet means.

Cost control methods need to be changed totally in today's economic changes where events can occur faster with rippling effects across one's nations. Conventional cost control methods of cutting expenses, cutting product lines, cutting workers, etc. are not as preferable as the new approaches outlined above. These strategies are intelligent and non-impacting upon the company.

Concluding Notes

Economic and social policies of modern times need to take on a different avenue altogether as conventional remedies are proven to be detrimental for growth or at least wasteful ineffective for recovery. As economic forces are interdependent, every external measures such as government regulations will effect the well being of private companies or individuals and that every undertaking by a collective of individuals or companies could also effect government policies and the direction or mistakes that the nation may suffer. We fully believe that to bring about economic improvements for the people and for a nation, the notion that "governments must stay out of businesses" as in the US, or that "governments must tell businesses what to do like children" as in Vietnam are not practical or productive in terms of economic growth and . Neither could economic production be carried out by corporations or limited within a few groups. What we do as government will effect businesses and vice versa. But we must realize that the strength of a nation is not because of some individuals, corporations but the people, the farmers, the workers, the professionals, businessmen. We must realize that in one form or another, our inter-woven social fabrics require us to support and respect each others and when we learn to selectively use economic or business strategies towards such mutual support or the people and for the nation, only then, we as a nation can grow. But that will require us to know limit our greed as social and economic progress require all 3 elements: Improvements, change and sacrifice. All begins with each of  us and not others.

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