Vietnam's history has always been a bellicose one. Of course
there were the wars against France and the US - wars against
foreign aggression - and the more recent move by Hanoi against
perceived aggression from Cambodia but the history goes back
further: the Ammanites have been fighting the Kmers, the Thais
and above all the Chinese for centuries.
Part of the explanation for this lies in the geographical reality
that is Vietnam and the clear split between the North and the South
which means that in parts the country is joined by a tract of land that is
only 50 kms. wide. This factor will prove operative in the future as it
has been in the past and is crucial to an understanding of the situation
in that country today.
For Vietnam is still a country suffering from a number of internal
divides which have implications not only for the internal 'stability' of the
country but also for Indochina as a whole and by 'stability' we mean,
as always, the kind of 'stability' required for foreign investment to be
able to move into a country rich in resources.
This has indeed been the lure for the Japanese who clearly also
wish to see an emerging middle class in the South buying more of its
motor bikes whilst assimilating karaoke culture. To the communist
regime, with its power base in the North, and intent on preserving its
privileges, these overtures are not wholly unwelcome, offering, as they
seem to do, a counterweight to the Chinese shadow to the North. The
rivalry here can indeed be seen as not only historical but also in parts
must have its roots in the parallel course these two Marxist regimes
have pursued during the last few years which in a sense makes them
regional competitors. The pattern in both cases is clear: a powerful
and dictatorial party apparatus relying heavily on the military for
protection of its privileges trying to achieve the status of a modern
state i.e. a symbiotic relationship with an emerging middle class.
Again in both countries factors are at work which may threaten
this possible outcome. The contrasts, about which we have spoken in
this column, which are the reality in China find their mirror image in
Vietnam. Hanoi to the North is the Beijing of Vietnam the home base
for the old guard trying to define its relationship with the Vietnamese
Guandong to the South - Saigon.
Saigon is fast becoming like other Asian cities. Small traders
crowd the pavements and luxury hotels go up to welcome back the
foreign business men. The middle classes are getting their savings
out from the mattresses now that private property is back and the
bicycle is giving way to the Honda.
These middle classes who the communist regime wish to woo
and control are the lucky ones in Vietnamese terms. The GNP per
inhabitant here is in the region of $840 which is nearly four times the
national average. But even here such figures hide the differentials.
Labour is cheap. It is literate. It is productive. It is hard working... but it
And it is abundant. 5.5 million live in the intramuros part of the
city - a staggering number; a rate of 23,200 per sq. km. (which
compares with a figure of 5,677 in Hong Kong). Such densities cannot
fail to produce not only a high number of beggars (as John Major
would point out along with Jack Straw - not too good for the tourists)
but also is part of a 19% national rate of unemployment. The city is
effectively being called upon to support a population ten times the size
for which Saigon was designed. The plan to help with the problem is
to build a Free Economic Zone (read: State Subsidised Sweatshops)
outside Ho Chi Min City.
Environmental damage is apparent with pollution reaching
dramatic levels which it has been said is irreversible. The water
sources on which the city depends have been contaminated by two
serious industrial accidents which poured toxic waste into the water.
Perhaps more worrying for business are the frequent electricity
blackouts which also reflect the problems relating to infrastructure.
According to the Financial Times in a special report (13/11/95)
agriculture in Vietnam is, 'not yet on the fast track'. The establishment
is concerned: 'Without agriculture, there can be no stability', opines Du
Moi the Vietnamese Communist Party's General Secretary. Indeed,
despite the picture from Saigon, Vietnam is still a predominantly
agricultural society - this sector accounting for some 70% of the labour
force. But it is geared towards an external market and accounts for
50% of all Vietnamese exports.
Whilst back in 1989 Vietnam was a rice importer today it is the
3rd biggest exporter (after Thailand and the USA). The cash crops are
(it is felt) the key to the future: coffee (currently a money maker on the
international market so the state has decided to double land available
for it over the next five years), sugarcane (Tate and Lyle announced in
October the setting up of a $71m processing plant) and cashew nuts
(again third biggest world exporter) figure among some of the crops
being grown in this country where according to a recent World Bank
57% live below the poverty line with some 90% of it concentrated in
the rural zones where a farmer can perhaps make $100 pa.
Pan Van Khai the Deputy Prime Minister echoes Du Moi's
concern, '... without guaranteeing safe food supply for 80m people by
the turn of the century, there will be no stability for development,' he
says whilst recognising the fact that you, 'cannot get rich through food
production'. You can but try and if the people complain let them eat
Du Moi's concerns are not without foundation. Ho Chi Minh City
has seen more than 50 strikes and walkouts organised by the labour
unions over the last two years. In one example last year 600 workers
at a South-Korean firm went on strike to protest against long working
hours and the regular beatings they receive from their South Korean
supervisors. The state shows little concern, indeed the worker's wrath
is often directed at the state sector. The government seems more
concerned to keep labour in check in order to attract foreign
investment. New laws have kept the minimum wage at $35 per month
despite labour demands for a rise to $50 which it had been before it
was cut. The tactic has worked with some $3 billion worth of
investment in the past five years.
And the foreign investors are squabbling. US corporations have
already been beaten by European and Asian investors in many cases.
Last September, for example, the government announced that it was
awarding Mitsubishi a contract to assemble cars. The contract was
won by a plan to build the industry from scratch over a period of four
years - tied to traditional suppliers of parts and technology like
Bridgestone Tyre and Asahi glass. A sour Alan Tonelson of the US
based Economic Strategy Institute noted, 'Mitsubishi's master plan is
clearly good for Japan. It is not clear how good it is for Vietnam'.
We could concur. Despite investment last year the country
exported $1.7 billion to pay for imports worth $1.8 billion. And they are
being ripped off. A report from Hanoi's Institute of Science
Management estimated that Vietnam had overpaid to the tune of $50
million for equipment in 300 investment projects due to inflated prices.
So far since the US made its latest moves to regularise relations
between Washington and Hanoi US corporate interest has been slow
to move in and Japan has really only been watching from the side-
lines. The Vietnamese government still has more to do in the way of
providing the necessary freebies in the way of infrastructure. It has,
however, firmly delivered on the tax front with a number of companies
enjoying full return on their investment allowing for the full return of
capital to the West. The Vietnamese reap no benefits except those
well positioned to be able to demand the kind of back handers that oil
Vietnam is clearly of interest to the masters of the Old American
Disorder. Firstly as a source of cheap labour. Secondly as a possible
market for consumer goods (or so they think - they got it badly wrong
in China) and last but not least: oil. For we are speaking of a country
which has plenty of resources of much value to her population if only
they were allowed access to it. Already 100,000 barrels a day are
being produced and we can all guess who is benefiting most.