SEDA defines well-being through ten dimensions: income, economic stability, employment, health, education, infrastructure, income equality, civil society, governance, and environment. SEDA examines each dimension along two time frames:
- The current-level score uses the most recent available data to offer a snapshot of well-being on a scale of 0 (the lowest level) to 100 (the highest).
- The recent-progress score uses data from the most recent seven-year period for which data is available to examine changes in well-being. This metric also uses a scale of 0 to 100.
Vietnam's overall current-level SEDA score of 42.4 places the country in the middle—number 79—of the 149 countries we assessed. Not surprisingly, wealthy nations such as the US, Japan, Norway, Germany, and Singapore come out ahead of Vietnam, with current-level scores of 80 or above. When it comes to progress over the seven-year period from 2006 to 2013, however, Vietnam is in the top quintile, putting it in the company of countries such as Poland, Indonesia, China, Brazil, Ecuador, and Morocco, all of which have had notable achievements in the past decade.
SEDA also examines the connection between wealth and well-being through two coefficients:
- The wealth-to-well-being coefficient compares a country’s current level of well-being with the level that would be expected given its GDP per capita (based on PPP). The expected level is represented by a coefficient of 1.0, which is based on global averages.
- The growth-to-well-being coefficient compares a country's recent progress in well-being with the level that would be expected given its GDP growth rate. Again, the expected level is represented by a coefficient of 1.0, based on global averages.
Vietnam is among only 49 nations in our data set with scores higher than 1.0 for both coefficients. The country's performance in converting wealth into well-being is particularly impressive— its wealth-to-well-being coefficient of 1.48 is among the top 10% globally. (See Exhibit 1.) And although Vietnam doesn't stand out quite as much when it comes to the growth-to-well-being coefficient—which comes in at 1.04—it is still above the global average on this measure.
So, how does Vietnam stack up to its peers? We compared the country to a group of four others—Indonesia, Malaysia, the Philippines, and Thailand—that, like Vietnam, have midlevel incomes. (Myanmar is also in the midlevel-income group but is not included in our SEDA analysis, owing to the difficulty of accessing reliable data.) This group, which we dub the ASEAN 4, will not only be crucial partners for Vietnam in the 21st century but will also continue to be key competitors in attracting foreign direct investment. (See Exhibit 2.)
Vietnam matches or exceeds the ASEAN 4 in several dimensions, including economic stability and civil society. In several areas, however, including infrastructure and governance, Vietnam lags behind the group. In addition, although Vietnam's performance in employment is in line with that of its ASEAN 4 peers, the country faces a number of labor market issues, including a lack of skilled workers and low worker productivity, that could impede the next phase of its development.