As an international tax expert, traveling to countries around the world gives me a perspective and sense of how other people live and do business. I’ve been to many countries in Europe (to some several times), as well as to Africa and China (including Hong Kong). Most recently, I went to Vietnam and Cambodia, and both countries were very different from the places I visited before.
Vietnam has an impressive economy and business climate
I wasn’t sure what to expect in the Socialist Republic of Vietnam. After the war, Vietnam was unified under a communist government but remained poor and politically isolated. In 1986, the government began a series of economic and political reforms that pushed economic growth. Since 2000, Vietnam’s economic growth rate has been among the highest in the world. Its successful economic reforms resulted in Vietnam joining the World Trade Organization in 2007.
Manufacturing, information technology and high-tech industries now form a large and fast-growing part of the national economy. Moreover, though Vietnam is a relative newcomer to the oil industry, it is currently the third-largest oil producer in Southeast Asia. Vietnam is also the world’s largest producer of cashew nuts, with one-third of the global share; the largest producer of black pepper, accounting for one-third of the world’s market; the second-largest rice exporter in the world (after Thailand); and the world’s second-largest exporter of coffee. We enjoyed their coffee so much that we brought quite a bit home with us. Other primary exports include tea, rubber and fish. In 2014, Vietnam negotiated a free trade agreement with the European Union, providing preferential access to European markets for developing countries through reduced tariffs.
Despite the country’s success, our local guides noticeably didn’t want to talk about politics so we were left to observe for ourselves. Although Vietnam is a communist country, they clearly see the advantages of business and trade. Many people are well-educated, and a number of large companies have developed over the last few decades. Foreign investment is strong, and we saw thriving factories for international brands such as Samsung. Many multinational companies are building very large manufacturing campuses in Vietnam. Tourism is a huge industry, and we were told on various occasions by many people to tell our friends to visit.
A large part of the Vietnamese population is young, with a median age of 30.8 years due to a post-war population boom. Amidst the signs of modern society are reminders of what had come before — we visited the Hanoi Hilton, the prison where Senator John McCain was held for over six years. It is located right in the middle of the city. I was particularly affected by seeing it in person because I met him once and had the opportunity to hear him tell the story of his captivity first-hand. The description of this prison by our guides was quite different than the story I heard from Senator McCain.
We also traveled to the Mekong Delta, which is mostly wetlands and flood plains. We noticed that water levels were low, and our guides explained that China had built large dams over parts of the Mekong River as part of power-generation efforts upstream. A big part of the delta’s economy is fishing, which we could see was seriously affected by the low water levels. It was definitely a struggling economy there. Those that live away from the cities hope to find a way to get there and get educated — just like in the U.S., education is a real key to prosperity.
Cambodia is still building their economy
Cambodia was really very different from Vietnam. They have a monarchy and the king and a small group of politicians run the country. They have a long history of being invaded and being at war, and during the reign of Pol Pot and the Khmer Rouge, millions of Cambodians were either killed by the regime or died of starvation. We visited one of the “killing fields.” I never cease to be amazed by the great evil that happens throughout history. Seeing it with our own eyes – rather than reading about it or watching a movie – was an extremely moving and powerful experience. Unfortunately, they haven’t had enough time to recover between the difficult times.
There isn’t much of a city life, so most people live in the country, selling and exporting agricultural harvests. The society is mostly agrarian, and the people are generally quite poor. One of the people on our tour spent many years working in the Appalachian Mountains, which are known for the poverty of its residents. She told us that there was no comparison to the poverty that we witnessed in Cambodia. Like Vietnam, tourism is a major part of the economy, and the government has invested in making Angkor Wat, a temple and the largest religious monument in the world, an exciting destination.
The good news is that Cambodia’s economy has been improving over the past few years with high annual GDP growth. Its top industries are tourism, textiles and manufacturing. Oil and natural gas deposits found beneath Cambodia’s territorial waters have great potential but remain mostly untapped, due in part to territorial disputes with Thailand. China is Cambodia’s biggest source of foreign direct investment. Cambodians recognize the benefits of learning English, and there are various charities running schools for the kids to help them to learn English with a hope that they will be able to advance their own lives and the economy. We visited one such school and spoke with the kids. They were very excited to practice their language skills.
How travel helps me serve my clients
I was very curious to learn about how both countries had recovered and evolved after the Vietnam War — it turns out that they are very different despite being so close geographically.
I feel that traveling helps me to better understand the countries where my clients are doing business, and I am able to ask more thoughtful questions about the nuances of local conditions. Travel also helps shape me into a better person – to appreciate our life here in the U.S. and to help me be more tolerant, understanding and well-rounded. I have a few more places on my bucket list, and I’m excited to see more of the world!
About Polina S. Chapiro (Partner, GHJ)
Polina has over 30 years of tax and accounting experience in the areas of corporate reorganizations, mergers and acquisitions, taxation of multinational companies, partnership and S-corporation taxation, income tax provisions, tax audits at the federal and state level, and negotiations with the IRS, state and foreign tax authorities. As head of GHJ’ Tax Department, she is responsible for managing all administrative, technical and personnel functions of the department.
Chapiro is a member of the International Tax Forum, Society of Trust & Estate Professionals, International Tax Club, California CPA Society and the American Institute of Certified Public Accountants and a frequent speaker on international tax topics. Chapiro earned her Bachelor of Science Degree in Accounting and Finance from the University of California, Berkeley HAAS Business School and a master’s in Taxation from Golden Gate University.