Article by Mr. Đinh Hồng Kỳ, published on Doanh Nhan Sai Gon on April 3, 2026.
Globalization was once celebrated as a force that erased distances—where goods, capital, and ideas could move faster than ever before. Yet alongside these benefits lies a less discussed consequence: risks travel just as quickly.
Today, disruptions occurring in distant regions no longer stop at their borders. They ripple through supply chains, energy prices, operating costs, and ultimately appear on the balance sheets of businesses thousands of kilometers away.
In such a world, geographic distance is no longer economic distance. What was once considered “global risk” is increasingly becoming part of domestic cost.
How Shocks Are Transmitted Has Changed
This shift did not happen overnight. But it has reached a point that businesses can no longer ignore.
A conflict in the Middle East can push oil prices up within days. A tariff decision in Washington can alter order flows in industrial zones in southern Vietnam. A disruption along Red Sea shipping routes can send logistics costs soaring, eroding already thin margins. These disruptions are no longer just “context.” They have become structural components of business operations.
What matters is not only the shocks themselves, but how they are transmitted.
In the past, geopolitical risks were often absorbed at the national level through reserves, monetary policy, or diplomacy. Businesses were rarely directly exposed.
But in a deeply globalized economy—where supply chains are optimized down to each link—buffers have largely disappeared. Shocks now pass directly into costs.
Rising energy prices drive up production costs. Higher freight rates inflate product prices. Exchange rate volatility erodes export margins. New standards—from ESG to carbon taxes—can quickly exclude firms from global markets. In this sense, risk has been “localized.”
A Growth Model Under Strain
Against this backdrop, a reality is becoming clear: the familiar growth model of many Vietnamese enterprises is under pressure.
This model—based on low costs, dependence on imported inputs, and concentration on a few key export markets—works well in stable conditions. But it becomes fragile amid volatility.
Recent years offer many examples. When logistics costs surged, profits for many firms were nearly wiped out. When orders declined, businesses hesitated to expand, even as interest rates eased. When new standards emerged, some firms were no longer eligible to participate in global supply chains.
The issue is not production capability. It is resilience.
Efficiency Is No Longer the Only Metric
This calls for a strategic rethink.
In a stable world, cost optimization and scale expansion may be sufficient. But in a volatile world, efficiency alone is no longer enough. Resilience has become a competitive factor.
The cheapest supply chain is not necessarily the best. A single sourcing strategy may be efficient in the short term but risky in the long term. Dependence on one market may drive rapid growth, but also increases vulnerability.
Accepting higher short-term costs in exchange for long-term stability is no longer optional—it is becoming necessary.
From Reaction to Anticipation
This shift also requires moving from reaction to anticipation.
In an environment where shocks are nonlinear and unpredictable, simply reacting is no longer effective.
Businesses must closely monitor geopolitical developments, build scenarios, and integrate risk into investment decisions.
Ultimately, resilience cannot be built in isolation. It requires an ecosystem where businesses, finance, logistics, and technology are interconnected to absorb and distribute shocks collectively.
A New Role for Policy
This transition also places new demands on policymaking.
If the past focus was on maintaining macroeconomic stability, today it is equally important to strengthen the economy’s resilience.
This begins with clear signals. Businesses cannot adapt without transparent information on energy pricing, tax policies, and regulatory direction.
Next is strengthening domestic capacity—from energy and logistics to supporting industries and infrastructure. Reducing dependence does not mean decoupling from the world, but enhancing autonomy within a connected system.
Finally, it involves developing risk-sharing mechanisms: from insurance and derivatives markets to stabilization funds and long-term financial instruments.
A New Competitive Advantage
The boundary between “global” and “domestic” is fading.
Events happening thousands of kilometers away can now almost instantly affect production costs, pricing, and profitability for businesses in Vietnam.
In such a world, competitive advantage is no longer just about low cost or large scale. It is about the ability to remain steady amid uncertainty.
Those businesses that build this capability will not only survive shocks—they may find opportunity within them.
And in that sense, distant conflicts—while disruptive—are not only risks, but also tests of resilience for an economy in transition.
(*) Chairman of the Ho Chi Minh City Green Business Association (HGBA)
Chairman of the Board, Secoin
Chairman, Ho Chi Minh City Construction and Building Materials Association
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