Vietnam's new-look economy
Next year Vietnam will celebrate the 30th anniversary of the end of the war which ended in America's defeat. It will be a chance for the outside world to understand the new Vietnam. For some, the war left a misleading image of Vietnam as a country peopled by peasant farmers and utterly destroyed.
But today, Vietnam's economy is among the fastest-growing in the region, with annual growth of about 7%, and Saigon, now known as Ho Chi Minh City, is one of the most vibrant cities in South East Asia. Exports are rising rapidly - mainly because of items like seafood, silk and timber products - while the country is also attracting new investment in cars and electronics.
The Danish head of the European Chamber of Commerce in Hanoi, Preben Hjortlund, said Vietnam was speeding along the same path as South Korea and other East Asian "tiger economies". Vietnam, he predicts, will achieve its economic miracle even faster than they did.
Emerging from conflict
The wars against the French and the Americans took a terrible toll. Vietnam remained in economic shock for years after the victory over US and South Vietnamese forces in April 1975. The country was stuck in communist ideology, weakened by new wars involving China and Cambodia, and its relations with the US stayed frozen for nearly 20 years. But in 1986 a new set of leaders, following China's example, put aside the old dogmas and embraced the free market. The new policy was called doi moi, meaning renovation. Now doi moi is bearing fruit.
Nguyen Quoc Khanh is one of Vietnam's new breed of entrepreneurs. He employs 1,700 people in his furniture and interior design company, AA Corporation, which he founded over 10 years ago in Ho Chi Minh City. Mr Khanh's business has taken off thanks to the rising wealth of Vietnam's new middle classes. In the past, his best customers were rich expatriates. Now he designs elegant residential suites and offices for wealthy Vietnamese clients. He has also completed contracts for hotels and restaurants in Sri Lanka and London. Next he aims to break into the lucrative French market. "Conditions for business are good," said Mr Khanh. "The usual wages for our factory workers are US$60 to 80 per month here. That's cheaper than China."
Vietnam's communist rulers encourage wealth-creating businesses. There is little, open political dissent because doi moi is delivering rising living standards. But if doi moi falters, that could quickly change.
Corruption rife
Corruption and cronyism are already widespread, and they could threaten the government's plans. The World Bank has issued warnings about fraud in Vietnam's large-scale programme of privatising state-owned enterprises. Senior officials in several government ministries have been arrested or dismissed. Vietnam could learn useful lessons from parts of central and eastern Europe, like the Czech Republic, whose economies stalled during their transition from state planning to market economics in the 1990s. Abuses and mismanagement in the process of privatisation were the main problem then - as now in Vietnam.
Luong Van Ly, a senior planning official in the Ho Chi Minh City government, is one of the open-minded technocrats in charge of the doi moi policy. He said the Communist Party was serious about fighting corruption, and he cited the party's new motto of accountability: "The people should know! The people can debate! The people must have the power to act!"
So it's goodbye Marx, and welcome to the free market. Mr Ly said Vietnam had turned its back on Marxist ideas of class struggle. He said that it was now accepted that "fast economic growth always entails a gap between rich and poor, between the haves and have-nots." The latest phase of doi moi involves more sweeping steps to liberalise the economy and attract more foreign investment.
This month Vietnam moved closer to being recognised as a mature trading nation, completing talks with the European Union on its future entry into the World Trade Organisation. Vietnam is still poor, and will need years to modernise its infrastructure, even with the international finance that is now pouring in. But through doi moi, the nation which won an astonishing victory in war looks well placed to win the peace, too.
By William Horsley - BBC News - October 18, 2004
Vietnam gears up for investment
HANOI - Phan Hi Yen studies at one of Vietnam's most prestigious universities, Hanoi Polytechnic University. Although she is uncertain what she wants to do when she graduates, she is sure that learning English will help her to do it. Previous generations of Vietnamese students studied Russian, in keeping with their Communist nation's ideological allegiances. But now, as Vietnam makes a big push to integrate itself into the global economy, English is popular.
"When I go out into the world, I need to be able to speak English to communicate with other people," says Phan Hi Yen. The growing number of students learning English is attracting Western companies to set up shop here, bringing much-needed foreign investment to a country which is still one of the poorest in the world.
Global recruitment firm Harvey Nash has set up a computer programming centre in Hanoi, employing more than 600 people. They work on projects for Japanese car maker Honda, TV broadcaster the Discovery Channel and the Prince's Trust, a charity linked to Britain's Prince Charles.
Work ethic
Skilled labour is cheap in Vietnam, where most computer programmers earn between $400 and $500 a month. That is high by Vietnamese standards, where the average monthly income is no more than $100. But a European IT worker would get paid at least five times as much.
"The Vietnamese are very resilient people. Previous generations showed that at war. This generation is using that resilience and energy, and channelling it to succeed in the working world," says Graham Davies, Harvey Nash's managing director in Vietnam. "There are a lot of young people in this country, and they don't mind working hard. They'll work until the job is done, even if it means staying beyond their assigned working hours." That may be because a job as IT project manager in Vietnam is seen as a high status profession.
"I'm proud of the work that I do. There aren't many of these jobs around in Vietnam - and I don't mind working long hours here," says Pham Quang Hai, a 28 year old project manager with Harvey Nash.
Spreading wealth
For many Vietnamese, a well-paid job with a foreign firm offers the chance to help their family start a small businesses. Take Bui Xuan Truong, a 33-year old computer programmer at Harvey Nash who studied in Prague and speaks fluent English and Czech. He has lent some of his salary to relatives to set up a small primary school. Among other things, it teaches English.
Western firms outsourcing computer work to Asian countries is not a new business trend, and it has become the subject of growing debate in the US and Europe, drawing opposition from labour unions. During this year's US election campaign, US firms have come under fire for outsourcing work to Indian computer programmers to cut costs.
Vietnam is only just starting its drive to become an Asian outsourcing centre. It aims to encourage foreign firms to set up there in the hope that an injection of Western capital will boost local living standards. But with that capital, complaints may follow.
By Karishma Vaswani - BBC News - October 7, 2004
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