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If you
want to see what kind of businesses would work well in
Vietnam, visit the state-owned Tu Du Hospital in
Ho Chi Minh City.
Medical
resources are so tight in this 800-bed maternity home
that authorities line up six women in one room to
deliver their babies. So acute is the space crunch in
the wards that even the corridors are used to tend to
newborns.
Tu Du is
overcrowded because it has a good reputation; people
come here from far-flung provinces. The hospital handled
45,000 births last year, more than the total in the
city-state of
Singapore.
“More
than 1.3 million babies are born in Vietnam every year,
even 20 percent of that is a good enough market for us,”
says Allan Yeo, chief executive officer at Thomson
Medical Center Ltd., a Singapore hospital operator that
specializes in obstetric and pediatric care.
Thomson
Medical is helping Vietnamese investor Protrade Corp.
build a 260-bed, resort-style hospital for women and
children—complete with a medical spa and a helipad—on
the outskirts of Ho Chi Minh City.
Of late,
a frenzied property market has dominated the investment
scene in Vietnam.
Yet,
real estate in this Asian country is overheated and must
be cooled by the authorities to preserve the
competitiveness of the $61-billion economy, especially
of nascent businesses such as organized retail.
Demand
for services is on a much stronger wicket.
A
banking boom
One
industry set for a massive overhaul is banking. Credit
is still dominated by state-owned banks that will
eventually transform from the state’s tools for
distributing capital to fully fledged commercial
institutions.
The
process will begin with the planned 9.75 trillion dong
($608 million) initial share sale by the Bank for
Foreign Trade of Vietnam, the country’s third-biggest
commercial bank.
The IPO
by Vietcombank, as the Hanoi-based lender is known, will
set the stage for a strategic investor to buy a stake in
the bank and help it modernize.
If
successful, this strategy will become a template for
other banks.
Telecommunications is set for a similar boom. A landmark
transaction expected next year is the privatization of
state-owned Vietnam Mobile Telecom Services Co., an
asset that several large, international operators may be
interested to own.
Following Vietnam’s accession to the World Trade
Organization this year, another service that’s tipped to
expand and be progressively more open to foreigners is
education.
Health
care
In
health care, the government is already encouraging
foreign investments so that the meager resources of
public hospitals can be better used to serve the poor.
The
socialist utopia of free health care broke down in
Vietnam in the late 1980s under shortages and cost
pressures; user charges were introduced in 1989; fuller
deregulation, which came two years later, saw the state
withdrawing from provision of subsidized outpatient
services.
Of late,
even in-patient care has ceased to be free: some
hospitals charge patients for letting them use the
elevators.
Still,
the public-health system in Vietnam is in better shape
than in many other developing countries of
Asia.
Thanks
to hospitals like Tu Du, it’s much safer for a woman to
be pregnant in Vietnam than in, say, Bangladesh,
Pakistan or India. According to the World Health
Organization’s estimates, 85 percent of births in
Vietnam are attended by skilled health professionals.
The figure for Bangladesh is less than 14 percent.
Growing
middle class
However,
the burgeoning middle class in this nation of 85 million
people now wants more than just access to a doctor. It’s
willing to pay for better—and more personalized—service
than the overworked public-health system can offer.
That’s a
big opportunity for investors because some existing
private hospitals are little more than refurbished shop
houses.
Yeo of
Thomson Medical is confident that even at prices higher
than the current rate of about $300 for a normal
delivery at private Vietnamese hospitals, demand won’t
be an issue. In fact, he’s building the Hanh Phuc
hospital in a way that it can be quickly expanded.
The
real-estate market in Vietnam has become a bazaar for
speculators to flip units in condominiums for a quick
profit.
Needless
to say, property developers are delighted with the long
queues of people waiting to pay a deposit on overpriced
apartments.
Yet,
private property is a legal and bureaucratic minefield
in Vietnam, where most land is still in the hands of the
state. Investors willing to bet on Vietnam’s domestic
economy are much safer with services businesses. |
