Future

Silicon Valley In Vietnam? Ho Chi Minh City's High-Tech Play

Saigon Hub, an start-up incubator in Ho Chi Minh City
Saigon Hub, an start-up incubator in Ho Chi Minh City
Lien Hoang

HO CHI MINH CITY — Vietnam’s latest economic experiment has both significant government funding — $110 million — and an ambitious moniker: Silicon Valley Vietnam. Though it could take years before the country sees the same kind of success as the California tech companies it hopes to emulate, Vietnam’s GDP growth is at its slowest since 1999 and it is in dire need of an economic boost.

So it’s now betting on start-up companies to tap into a domestic market of over 90 million people and a burgeoning young population in particular. One popular meeting place for start-ups in Ho Chi Minh City is Saigon Hub, an incubator of sorts where an image of Apple co-founder Steve Jobs is prominently displayed.

Here, Nguyen Hai is helping to connect the government with the world of technology. “Look at this project as a first signal to prove that the government is now aware of technology start-ups. So they do want to support and grow them in Vietnam.”

Officials haven’t released many details, but the earmarked government money is likely to go toward two so-called “accelerators” — one in Hanoi and one in Ho Chi Minh City. Accelerators are like mentor programs that support, train and connect start-ups with investors.

“The model is that they will support the start-up from the very beginning, from just the business idea to building the idea into the prototype,” Nguyen says. “And then test the market, launch the product, and then scale to the next level.”

Skeptics question whether governments should be involved in start-ups at all, but in communist Vietnam, nothing much succeeds without some government support. Many say that for start-ups to succeed, they need more efficient regulation.

“I would encourage anything the government can do to make it easier to get a license, to make it easier to pay my taxes to the government, to make paperwork easier,” says Chris Harvey, CEO of ITviec, a website advertising IT jobs.

“And if there’s a special program for Internet companies or start-ups, maybe some kind of fast-track program that makes it easier for us to get licenses and do business, that would be great.”

Unique advantages

The country is looking at examples in South Korea, Malaysia and especially Singapore, where the government has invested hundreds of millions of dollars in entrepreneurial businesses.

But Vietnam has its own unique advantages. More than half of the country’s inhabitants are under 30 years old, and about one-third have Internet access. There are 120 million mobile phone subscriptions in a market of 90 million people.

“We’re experiencing a new generation, so there’s a lot of momentum right now,” says Anh-Minh Do, an editor at Tech in Asia, a popular online technology and start-up website. “A lot of young people are creating start-ups, a lot of experienced people are creating start-ups. So it’s in a new space it’s never been in before.”

These new grassroots businesses are vital right now, because Vietnam’s economic growth has reached a record low — and because IT is one of the few sectors that has remained strong despite the lagging economy.

“Information technology is a great industry for Vietnam,” say Chris Harvey. “It doesn’t require a lot of money, you don’t need a big factory. It’s clean, these are clean jobs, they don’t pollute, they’re highly paid generally. And also the world is moving towards more information technology all the time.”

Nguyen Thi Thu Tram, operations assistant at Square — the Burmese answer to Facebook — says these new entrepreneurial technology companies have many passionate employees. “There are a lot of challenging opportunities for me to work here,” says Nguyen. “I can learn a lot from this environment. So I think Square is a good company for me to learn and make my contribution.”

Square is among the many start-ups that use Saigon Hub as an office. Its founder, Hoang Tran Quang Khai, says he opened the incubator to encourage innovation.

“You can work from home or from a coffee shop,” he says. “But there's no sense of community… When you come here, you can have the motivation from all the entrepreneurs working with you. You can share all the resources and knowledge, the experience of each other to be successful together.”

With any luck, Saigon Hub will soon get a lot more crowded.

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Geopolitics

Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3

-Analysis-

LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.


Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

commons.wikimedia.org

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

If nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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