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Clinton's Visit Brings Optimism to Vietnam

The positive buzz from U.S. President Bill Clinton's visit to Vietnam left foreign and local business leaders grinning. After years of frustration, a new mood of cautious optimism is paving the way for serious reforms rolling out of the U.S.-Vietnam trade agreement, due for legislative approval next year. But turning the feel-good atmosphere into solid business deals will require persistence and patience on both sides. While Clinton issued mild appeals to enhance private industry, it was left to Massachusetts Senator John Kerry, a long-time advocate of normalized relations, to deliver a more blunt message: Slash red tape, enforce commercial contracts and abandon the lingering favouritism towards state firms.

"No government can conceivably receive legitimization and remain in power unless it provides for its people," Kerry warned, noting the urgent need to create 1.4 million jobs annually in Vietnam. Clinton's entourage didn't tell the Vietnamese anything they didn't already know. In recent weeks the party leadership has trumpeted the importance of information technology and warned that robust trade relies on raising the quality of Vietnamese goods. To minimize bureaucracy, Hanoi is already moving towards decentralization. Indeed, a November 17 signing ceremony showcased deals struck in the provincial cities of Hue and Danang.

While big U.S. companies like Oracle and Boeing grabbed most of the headlines, the small fry are also looking for substantial gains from the trade pact. Everything from pickled cucumber exports to IT start-ups are envisioned -- many with a little help from overseas Vietnamese. Aside from dishing out capital, the overseas Vietnamese display human-resource potential. Controls Inc., an Indiana-based maker of electronic circuit boards, is considering setting up a plant in Vietnam, largely due to the smattering of Vietnamese-Americans in its domestic workforce. "They are industrious, dedicated people. They opened our eyes," says internal development consultant P.J. Marshall, a member of the U.S. business delegation that was in Vietnam.

He's not fazed by stories of failed investments by big companies back in the mid-1990s. "Ultimately," he says, "it may be the smaller companies that really reach the grassroots level of the Vietnamese economy and form more lasting partnerships." (See related article: "The Region - United States & Vietnam - Blowing Hot and Cold"

By Margot Cohen - Far Eastern Economic Review - November 23, 2000.


Clinton's Visit To Vietnam Exposes Wounds

It's awkward, sometimes, to watch a former enemy being feted. Vietnam's communist elite endured just that this past week as tens of thousands of their own countrymen, showing indecent enthusiasm, spilled onto the streets of Hanoi and Ho Chi Minh City to greet the first U.S. leader to visit the country since the Vietnam War. It was a jarring contrast to the cool reception U.S. President Bill Clinton was given during official meetings, and evidence of the wide gap that exists between Vietnam's rulers and their mostly much younger charges. Of longer-term significance, though, were the indications that Clinton's visit has become intertwined in the internal political manoeuvring in Hanoi ahead of next year's Communist Party congress -- an occasion at which top-level personnel and other changes are normally unveiled.

Informed party insiders told the REVIEW that in late October the country's senior advisers, Do Muoi, Le Duc Anh and Vo Van Kiet, sent an unprecedented joint letter to members of the party's central committee, in which they criticized the party secretary general, Le Kha Phieu, for "weak" leadership. The apparent response, on October 27, was a politburo circular in which party members were instructed against giving a warm welcome to the U.S. president. That thousands should subsequently have turned out on the streets to greet Clinton has, as one senior official conceded, left party leaders "stunned." Phieu's standing may well have been damaged. On April 30, 1975 this correspondent witnessed North Vietnamese tanks crash through the gates of the presidential palace in Saigon, hours after the last American ambassador had left on a helicopter from the U.S. embassy roof. This past week I watched as Clinton's motorcade drove, late at night, past the same gates of the former presidential palace as tens of thousands of Vietnamese, young and old, applauded and cheered. "It's a happy day," said Tran Van Luong, a middle-aged former civil servant, grinning.

Clearly Phieu was not sharing such feelings. During his meeting with Clinton on November 18 he treated the U.S. president to a lecture on America's history of aggression and reminded him that "for us, the past is the root, the ground and the strength of the present and future." One U.S. official described the meeting as "outrageous." "Phieu just blew it," said a senior U.S. diplomat, referring to the missed opportunity for discussing future cooperation. But Vietnamese party insiders see the matter differently. An official, who declined to be identified, says Phieu's speech was directed not at Clinton, but at the party elders and revolutionary veterans on whose support he will rely at the congress. A near-verbatim report of his remarks, made during a private meeting with Clinton, was quickly broadcast twice on Vietnamese television. Other reports followed in the official press (China's Xinhua News Agency also highlighted Phieu's tough stand). The official says that publication was likely directed at party members caught up in the euphoria.

That Clinton's visit should have run into such sensitivities has been a reminder of just how difficult Hanoi's relationship with Washington remains. The politburo's October 27 circular -- seen by the REVIEW -- illustrates this all too clearly. Signed by politburo member Pham The Duyet, it instructs party members not to be "too warm" toward Clinton. They should behave with dignity and "be vigilant in safeguarding the sovereignty and security of the country." It adds: "We should remember that the basic nature of the U.S. is against communism. They haven't dropped their policy of peaceful transformation to change the nature of socialist countries." Party insiders say the circular, following so closely from Phieu's castigation by the party elders, was intended to demonstrate his firm leadership. There were other signs too: Clinton's visit was only announced in Hanoi two days before his arrival, when a few paltry banners were hung. A news conference on the eve of Clinton's arrival by Foreign Minister Nguyen Dy Nien was cancelled. "If the party secretary is nervous why should he (Nien) risk his neck?" said an official who asked not to be identified.

All in all, say party insiders, the Clinton visit ran smack into the long-standing rift within the party over the pace of reform and Vietnam's relations with China and the United States. Conservative opposition to Hanoi's trade agreement with the U.S. was overcome only after China signed its World Trade Organization agreement with the U.S. and Washington had made some concessions to Hanoi. But party elders are concerned by the pressure towards privatization coming from younger officials. They see closer relations with the U.S. leading to a further weakening of the socialist economy. These elders, especially senior advisers Do Muoi and Le Duc Anh, still have great influence over party policies. They are, by all accounts, disturbed by signs that Phieu -- generally considered an arch conservative -- may be listening more closely to younger technocrats.

Phieu told Clinton that relations between the two countries should develop "without recurrences of the past." But the dead hand of the past and those of old men seem to hang heavy over Vietnam's hopes for the future.

By Nayan Chanda - Far Eastern Economic Review - November 23, 2000.