Rongvgcl1.jpg (376494 bytes)
Return to VVG's Home Page

V V G - Business & Investment Articles

Copyright © 1999-2008  Vietnam Venture Group, Inc. All rights reserved.  March 1, 2004

Viet Nam as the Decade Ends 

From the Vietnam Center of Texas Tech University


Is the question: Good Morning Viet Nam, or Good Night? It is rhetorically being asked, sometimes clamorously so, in the streets, rice paddies, expat offices and Party headquarters, as the system rings in Year 2000. 

The Year 1999 has been a difficult one to track in terms of social and political developments. Somewhat less so in economic terms, but more depressing. Charting the year chiefly meant reading the Politburo reading its tea leaves. 

One fact clearly emerges: the ruling Politburo -- where all power resides -- is in a desperate quandary. It's a damned-if-you-do and damned-if-you-don't dilemma, which pits the past against the future; the old against the young; hope against anxiety.

Here is a true policy-making dilemma: persist in refusing to reform and be left behind; open up and political change becomes unstoppable. It not only threatens the personal careers of the Politburo 18, but raises the stark vision that the past sacrifices of each may be judged by history as going for naught.

 

Whither Viet Nam?   By all evidence the Politburo spent the year agonizing over that question.  In the economic sector it wrestled with involuted decisions on production, supply and demand, stimulation of the economy -- the same questions that some other systems have recently solved brilliantly without knowing quite how they did it. In Viet Nam the younger members challenged the older ones; the reformers debated the ideologues.  Always at the root: agreed, we must makes changes, but how much risk to take? Risk change and have the system blow up in your face. Don't change and have the system blow up in your face. 

At year's end, the air cleared. The Politburo redefined its collective wisdom. It is this: we have no intention of making any social or political change that in any significant way endangers the status quo. If we can be shown risk less change that does not alter the ruling system, well and good. If not, forget it. We will change nothing and we will live with the consequences. Whatever past indecisiveness did exist is now gone. Whatever genuine debate, raged, it has now dissipated. In truth, such policy thinking has prevailed for the past several years. Now it is out in the open.  

 

Body Count.  By the end of the year most of the fine-tuning tabulation of the April census had been completed, providing a comprehensive database.

Census data indicates Viet Nam's labor force (38 million) is young, hard working, educated and cheap. Literacy rate over 10 years 91% (vs. 88% in 1990). Population under 15 down to 33.5% (from 39%). Elderly: those over 65: 5.8% (vs. 4.7% in 1990).   [NOTE: There are  known disparities in the work of the census takers, and thus the results, which as reported here, are only the government’s figures, and by no means a necessarily accurate. By our estimates, the actual urban count is at least 20% higher.] 

Crime and Punishment.  The Pham Duc Phong report at midyear triggered once more a campaign against corruption in Party and State. Phong's Public Property Office audited the books of 55,000 government and Party agencies, found $5.8 billion in assets unaccounted for (29% of the total assets), most of it in the form of furniture, office supplies and vehicles.

The semi-purge that was launched against corruption in the Party brought forth charges (as in past anti-corruption drives) that the campaign was being misused by officials to settle old political scores or to eliminate the security guardians such as Phong (the ancient problem of quiz custodies ipsos custodies? - who will guard the guardians?).

PM Phan Van Khai lectured the country on the evil effects of corruption: it taints Party image; it is detrimental to foreign investment; it makes the Vietnamese people distrustful of authority. The Party drive to purge "corrupt and degraded cadres" ran noisily during the year but by the end of 1999 had gone quiet.

Crime increased, the Ministry of Social Affairs reported, linking it to increased use of illegal drugs. Viet Nam now has 132,000 registered heroin addicts (70% of burglary arrests are addicts). Drug convictions in Ha Nai doubled during 1999 (general crime was up 40%). Viet Nam's "sex worker" population set at 300,000 now being unionized. Heroin drug addiction among college students increased from 68/1000 in 1996 to 325/1000 in 1998, while the total number of student heroin addictions rose from 92/1000 in 1996 to 860/1000 in 1999, a true epidemic. 

Police in Thai Binh province jailed a 90-year old drug pusher for the second time. She told the court she had been smoking heroin for 30 years. She was released because of her age.

 

Leadership. The year was marked by personnel changes, which, together with other policy problems, increased tensions severely in the traditionally cohesive Politburo. Such was the conclusion by most observers, even when they differed as to how severe were those tensions. Viet Nam's "leopard spot" governance--little fiefdoms run by local Party people often corrupt and worse, immune to rectification--plagued the system. As described by PM Khai, there were "areas managed by corrupt officials that have become terrible places for Vietnamese people to live." 

Politburo rectification efforts, called "the urban strategy", seek to beef up leadership in key cities. Top party person in HCMC is now Nguyen Minh Triet, 57, from Saigon, specialist in mass mobilization; in the past he worked chiefly with young Party people and organizations. In Hai Phong it is To Huy Rua, and in Da Nang, Phan Dien.

The Party leadership worried publicly over the state of young Vietnamese intellectuals, a worry echoed by the press. Nhan Dan (April 24) asserted that young intellectuals in Viet Nam feel they are unmotivated. Most are in academia and their malaise is traceable to worry over quality of education and career opportunities.

"Many young (Party) cadres are really worried about their future. After graduation, most have to struggle for a daily living, thus having little time for improving their skills or gaining further qualifications. Statistics available show that 32% of the staff in universities and colleges is under 35, and among them only 3.7% have received training overseas. The average age of higher education degree holders in 57.2 years." 

 

Why the Fall?  It all started out so well--there on the economic front. Doi Moi (renovation) set forth what was needed: infrastructure, power grids, a working telephone network, banks, dams, roads, you name it.

At first money poured in: France’s Sofitel renovated the famous Metro pole in Ha Noi; Telstra of Australia brought in the first international telephone system; Unilever, the Anglo-Dutch consumer goods firm started to make and sell cosmetics, deodorants, hair conditioners, etc. From Taiwan, South Korea, Hong Kong, Singapore came entrepreneurs to investment zones to produce shoes, toys, and clothing. From the U.S. came Proctor and Gamble, 3-M, Ford Motor, GM -- 400 firms in all. By 1996 direct foreign investment totaled a third of Viet Namþs GNP ($8.3 billion annually).

Then came a "deepening social crisis," as the NGO economists put it so carefully. The [gross domestic product] growth rate (earlier in the decade at 10% p/a) began to fall, ending the decade at 4%. This was coupled with "regional displacement" (again, as the economists put it), that is, the emergent recovery of other Asian economies, which left Viet Nam at further disadvantage. Doi moi turned out to be chiefly rhetoric. Viet Nam became closer to Cuba than China. FDI went back to the 1992 level. 

The Politburo hunkered down in its bunker as it has done in the past during times of trouble. By all evidence it now simply lacks political will. It lashes out at socio-political divisiveness lumped under the rubric of "social evils". These continue to multiply, defying remedial measures that in any case are too cautious and too few. The Politburo cut the official work week to 40 hours - - this in a country where the great economic draw is cheap labor, where workers are desperate for long hours - - because it means more money. ("Without cash nothing to do on my day off anyway," said one worker.)

 

Why this sudden failure? Why this economic turn about? Academics, economists, officials, journalists, continue to search for answers. Some explanations: 

a)   spill over from Asian financial woes;
b)   lack of convertible currency;
c)   no adequate banking system;
d)   rise of excessive ultra nationalist spirit among Vietnamese;
e)   leadership's threat to return to hard line communism;
f)   economic ignorance on part of populace (the supermarket shoplifter who explained to police: "I'm stealing from the foreigners, not from the State"); or
g)   all the above, or something else.

From the welter of rumors and reports that flooded out of Viet Nam came good news/bad news, official promises, and expressions of hope. Some samplings below: 

 

Good News/Bad News  

 

Hopes and Expectations

Vietnam Center
Box 41045
Texas Tech University
Lubbock, TX  79409
email 


Please read more about Vietnam Venture Group, Inc.
Articles | People | Southeast Asian HandicraftsV V G's Home Page   | write to us