Developed by the non-profit foundation, with the aim of researching and boosting the development of trade policy in Asia, the index uses 24 indicators to measure 19 economies in Asia and the US across the three recognised pillars of sustainability, including economic growth, social capital, and environmental protection.
The index measures the readiness of each economy to participate in global trade in a way that creates sustainable growth and attracts foreign direct investment, in addition to funding and support from multilateral development agencies. It was first published in 2016 and this year is the second edition.
Accordingly, Vietnam ranks ninth on the list, up two points from 2016 and up six points in index performance relative to the GDP, while currently ranking 15th in terms of GDP.
Vietnam is one of the countries with the best performance in this index. Along with 12 other countries, Vietnam has achieved a high level of market openness, reflecting a good sign regarding the openness of trade and cross-border trade.
In terms of social capital, Vietnam has risen to No. 8 and higher than middle income countries, such as China, Thailand and Malaysia, thanks to curbing inequality and improving labour standards.
Stephen Olson, Research Fellow from Hinrich Foundation, said that Vietnam is a country with a solid track record towards sustainable trade. In the economic sphere, along with impressive GDP growth, Vietnam is also very open to trade. The signing of the CPTPP is a demonstration of Vietnam's commitment to trade liberalisation, he stated.
In addition, Vietnam has made great efforts in attracting foreign investment. With multinational corporations increasingly attaching importance to the sustainability of investment decisions, sustainable trade policies have helped Vietnam to raise the share of FDI in the GDP. Vietnam has become an important link in the supply chain in East Asia along with Japan, the Republic of Korea and Singapore.
Experts also suggested that Vietnam should seek ways to overcome the trend of labour force decline due to aging population; reduce trade costs related to infrastructure, logistics and other costs from the legal and management systems; decrease risks in the commercial payment process; and reduce the rate of deforestation and water pollution caused by trade and production factors.
