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UPDATED VERSION. Everybody is saying Vietnam's economy is booming and may surpass Malaysia's in no time if we are not careful in planning ahead. You can't mess around with a country of over 85 million people, with over 60% of them clustered among the young and productive -- median age being 26.9 years.

Even India is now a strategic partner to Vietnam. It was announced recently that two-way trade between the two countries is expected to reach US$2 billion this year, two years ahead of goals set in the joint statement issued nearly one year ago when the strategic partnership was forged. Major categories of goods exported from Vietnam to India, which has been increasing at a steady 20% growth over the past few years with the trade balance in favour of India, include pepper, rubber, computer hardware and electronics products, cinnamon bark and spice, and garment and textile products.

In July 2007, India decided to invest US$527 million to set up a steel factory in Ba Ria Vung Tau Province, and a further US$600 million oil exploration and exploitation project. Besides, India's Tata Group has decided to pump in more than US$4 billion to set up two steel mills in Ha Tinh Province.

What's more, business registration processes had been expedited even in the northern mountainous province of Lao Cai -- investment licenses can now be issued within six days!

There must be some magic in Vietnam that helped pump-prime the country's economy. So I decided to give it a closer look and landed on Ho Chi Minh City on Vietnam's Liberation/Reunification Day (April 30 evening), and witnessed the celebration of Workers' Day (May 1).

Doubtlessly, HCM City plays an important role in the country’s socio-economic development, accounting for 22% of GDP, one-third of the State’s budget and 40% of the country’s export turnover.

Yesterday, teamed with a group of Malaysian investors, I toured the Saigon Hi-Tech Park (SHTP) and Vietnam Singapore Industrial Park (VSIP), and the Phu My Hung area in Saigon South.

The SHTP is where the new Intel mega-site is being developed, with US$1 billion investment for the company's digital ASEAN (d-ASEAN) programme. Key tenants now are Jabil from USA and Allied Group from Singapore. It will need another five years or so to mature but most of the outsource services have virtually set up camps in Saigon to capitalise on Intel's supply chain. Capturing Intel into Ho Chi Minh is a coup for Vietnam, and a severe threat to Penang as a base for the Electrical and Electronics industry.

The VSIP, near Song Be area, is about 14 years old, set up in March 1994 during the time when Vo Van Kiet and Goh Chok Tong were both Prime Ministers of the respective countries. It now houses full occupancy of tenants with manufacturing as a strong base. I could see earthwork for Phase II being carried out. It has the signature of Singapore-conceived facilities, clean, systematic and natural vegetation-friendly.

Phu My Hung is basically a Taiwanese investment when Kuomintang ran the economy before Chen Shui-Bian came around. Having endured the Asian Financial Crisis, the far-sightedness of the Taiwanese investors had finally paid off, and Phu My Hung, a former swampy area that needed massive earth-fills, is the jewel of the crown for Saigon South. Land prices now fetch US$4,500 per square-metre! Hip names in retail sector are now located here, including the sleek HQ for Unilever.

What amazed me is that the thoroughfare leading from District 4 to Phu My Hung is linked with a 12-lane highway, and the structural plan is mammoth by any benchmark. Is it any surprise that, after barely six months the new international arrival terminal was commissioned for Saigon's Tan Son Nhat International Airport, a brand new airport that rivals KLIA is now being crafted on the drawing-board?

Vietnam's home brand, Highlands Coffee, is located at Broadway D in the neighbourhood of Unilever HQ and opposite the soon-to-be-completed Saigon Paragon... LensaMalaysia pix by Jeff Ooi

Thanks to friends in HCM City, I was brought around to view the on-going mixed development project at Asia Phu My (APM) in Saigon South. It is targetting realty investors who are comfortable with the US$1,500 ~ US$2,500 per square-metre bracket.

I am also delighted to see that my university, RMIT of Melbourne, has set up a reasonable-sized branch campus in Saigon South. It has been running for a number of years.

VIETNAM'S ECONOMY IN CRISIS? Despite the glittering outlook, some of the old hands among Malaysian expatriates I met up with expressed their concern that Vietnam's economy may be headed for a bubble burst by August. That's the date when the financial sector's monetary credit squeeze policy comes into full effect and speculators in the real estate industry may be the first to burn their fingers, and domino effect see in.

According to media reports, State-owned corporations, which had invested 37% (US$8 billion) of their capital into real estate, banking and the stock market, are now trying hard to maintain solvency.

At last month’s meeting with officials from the national government, Viet Nam News said representatives from the International Monetary Fund (IMF) told State-owned corporations and groups need to focus on their major businesses, and warned that the local financial market is being hurt by small banks.

It is said that State-owned corporations active in the coal, electricity and petroleum industries have made huge profits in telecommunications, finance and banking, but are facing sharp reductions in their own productivity. This could have major repercussions for the national economy and security.

According to estimates, the average corporation makes a profit of 15 to 18% annually. but the modest profits would not be enough to compensate for losses from over-investments in non-core businesses.

To head off a potential disaster that could affect the national economy, Prime Minister Nguyen Tan Dung has asked all State-owned corporations and groups to cap their outside investments at under 30%. Concurrently, banking groups are also forbidden to allocate more than 15% of their capital elsewhere.

Meanwhile, the Ministry of Finance has switched on the 'damage control' mode to fight a s,liding stock market. Last week, the Ministry allowed the State Capital Investment Corporation (SCIC) invest in the Vietnamese stock market has immediately brought a halt to the relentless decline in the VN-Index. In addition, the ministry will review investments for all State-owned corporations and groups later this month.

On the other hand, inflation is getting more heightened while trade deficit is worsening, a double whammy of sorts.

Recently, Dr Nguyen Tri Thanh from the Central Insitute for Economic Management said consumption growth rates had increased significantly compared with the country’s GDP growth rate in the past few years. Significantly, the country’s trade deficit now amounts to 17% of the GDP.

He said the increase in consumption, especially spending on imported goods, is one of the causes affecting the trade imbalance. He added that Vietnam’s trade deficit would increase from US$7.4 billion in the first quarter to US$19 billion for the entire year.

According to the World Bank, Vietnam’s population can be divided into five groups, and the 20% in the richest group accounts for 43.3% of the country’s consumption, compared with 7.2% of the poorest group. Purchase of luxury imports by the upper echelon has been blamed as the main culprit to trade deficits.

LEARN AND RE-LEARN. Whatever that's said and done in Vietnam's econiomy in recent months, it is a live chapter for me to climb the learning curve.

Admittedly, I am mentally and physically exhausted after surviving the gruelling GE2008 campaign. Saigon seems to be the ideal place to recuperate the tardy anatomy as well as to rejuvenate the mind.

What I can gather is that Vietnam has put wars and politics behind them. The whole nation is hungry for economic progress. We should be seeing their back as they zoom past us soon, real soon.