Vietnam War Leaves Legacy of Anguish : Prosperity Eludes Victorious Hanoi : VIETNAM: A Decade Later

The North Vietnamese forces he helped direct had just rolled through the enemy’s strategic Central Highlands garrison of Ban Me Thuot, and Maj. Gen. Pham Han, a plucky spark plug of the revolution, was enjoying a victory toast of cognac with his friend and colleague, Lt. Gen. Vu Lang.

As routed South Vietnamese soldiers fled, triggering a stampede that would quickly crumble the Saigon government’s defenses, the two generals smiled and vowed to repeat the toast--next time with champagne--when the 30-year struggle against the French, the Americans and their own southern countrymen was finally over.

Barely seven weeks later, it was. On April 30, 1975, Han and Lang met again at Saigon’s just-captured Tan Son Nhut Air Base, once a bustling U.S. military installation, and popped the cork on that long-awaited bottle of victory champagne.

“We have realized our wishes,” Han, now Vietnam’s assistant defense minister, remembers telling his friend as they embraced in joy.

Once the Americans and the U.S.-backed government in the south were vanquished, millions of Vietnamese rejoiced at the reunification of their divided land and the end of a brutal war that left 1.5 million Vietnamese dead and the lush countryside ravaged by bombs and defoliants. Millions of others trembled in fear, panicked by the uncertainty of life under the new Communist regime.

And millions of Americans, safe in their homes an ocean away, watched with disbelief, shame or anger as television and newspapers replayed the shocking climax to one of the most controversial and ignoble chapters in U.S. history, one that cost 58,022 American lives and $150 billion and humbled and embarrassed the most powerful nation on Earth.

America has gradually recovered from the jolt it suffered to its prestige and confidence. But the events of that day 10 years ago next Tuesday are still rippling through the social, political and economic fabric of this tropical nation, once the fertile jewel of the overseas empire France had carved for itself in Indochina.

Vietnam’s hard-bitten, uncompromising northerners drove to victory and then let the spoils rot. In one short decade of Communist control, Vietnam has become embroiled in another war--this time in neighboring Cambodia--and, for its involvement, has been scorned and shunned by much of the international community as a militaristic bully.

One of Poorest Nations

It has become one of the poorest nations on earth, the cream of its technicians, traders and engineers drafted into military service or set to flight as refugees. Meanwhile, the people who fought so doggedly to rid themselves of foreign domination have, of necessity, become economic vassals of the Soviet Bloc, their future development mortgaged to Moscow.

Much of the Soviet aid goes to the military, and the rest does not have the clear, identifiable impact on the civilian sector that came with U.S. aid during the war. That also holds on a personal level. The Vietnamese call Russian visitors “Americans without money.”

The dour, brusque northerners and their free-wheeling southern brethren may have been politically reunited, but they remain deeply divided in spirit and attitude. Enthusiasm and initiative were long ago crushed in the dusty streets of Hanoi, where residents seem to have been programmed to shun or ignore outsiders.

But here in the city once called Saigon, now named Ho Chi Minh City after the founder of Vietnamese communism, people still bustle with a kind of muzzled enthusiasm, the semi-legal black markets still thrive, and the touts, albeit somewhat rusty, still scheme of ways to make a fast dong or, better yet, a buck.

Thumbs Down on Hanoi

Regional rivalries and resentment have not been erased by the new order. Liu, a 30-year-old Ho Chi Minh City trishaw driver who once chauffeured American military officers, has only contempt for his conquering northern cousins. “Hanoi people No. 10,” he whispered to a foreign passenger the other day, giving the thumbs-down sign to underscore the point. “Saigon No. 1.”

Progress has been hobbled by a number of factors: doctrinaire, aging northern leaders adept at directing war but untrained in the ways of peacetime economics or development; a crumbling infrastructure, ravaged over the years by war and neglect; passive but widespread resistance in the historically more productive south to Hanoi’s periodic attempts to choke off free enterprise and enforce collectivization.

But underpinning all the problems has been the occupation of Cambodia, now in its sixth year with no light at the end of the tunnel. To prevent the return to power in Phnom Penh of Chinese-backed Khmer Rouge guerrillas, Vietnam maintains an army of at least 160,000 troops in that neighboring land, with tensions also high on the northern border with China.

Hanoi’s total army numbers 1.2 million men, the world’s fourth largest, and almost half of its meager national budget is devoted to defense. Aid and loan programs from Japan and major Western powers slowed to a trickle in protest over the Cambodian invasion. As a result, the Soviet Union and its East Bloc allies have with a few minor exceptions become Hanoi’s sole benefactors.

The Soviets provide 99% of Vietnam’s oil, all of its military hardware and at least $2 billion in military and economic assistance a year--one-fifth of the total output of goods and services. The grant aid of the war years has ended, and the Soviets now expect their loans to be repaid. In partial payment, Hanoi has furnished tens of thousands of laborers to the Soviet Bloc.

With a per capita income estimated at between $125 and $200 a year, Vietnam ranks among the world’s most destitute nations. It is $6 billion in debt, mostly to the Soviet Bloc, and major world lending institutions have for the time being cut off its credit.

In a report last year, the foreign ministry of one Western nation with diplomatic links to Hanoi bluntly blamed the country’s leaders for its mounting woes. “The serious economic problems resulting from decades of war have been compounded by bad management and totally unrealistic plans, the imposition of Communist controls on the recalcitrant population and the invasion of Cambodia,” the ministry said in a background briefing paper.

Even with its very productive farmland, the nation of 60 million still cannot feed itself, although it approaches self-sufficiency in the production of rice and other grains. Heavy industry is virtually nonexistent, electrical supplies are inadequate and erratic and internal transportation systems are unreliable.

Typical of the problems is the story of a huge paper mill built after the war. The Swedish government poured $500 million into construction of the plant, but two years after its completion, it functions at less than 40% of capacity because it routinely runs out of either coal to run the power plant or raw materials.

Everything from beer to housing is in short supply. In Hanoi, electricity is rationed. Few homes are wired for power, and those that are get it about one night a week. The lack of some goods carries with it an ominous dynamic. U.N. experts say the population is growing at the rate of 2.3% annually, straining already stretched food supplies, because the country is woefully short of condoms.

Hanoi’s economic quagmire stands as a stark counterpoint to the progress of neighboring non-communist nations such as Thailand, Malaysia and Singapore. According to the orthodox doctrine that led the United States into the war, these were the dominoes that were supposed to fall next if Indochina went Communist. Instead, they boast increasingly stable political systems and the developing world’s most robust economies.

In Vietnam, at least one in five workers is jobless, Western experts say. Tens of thousands sleep on the streets. Students, faced with a bleak future at home, clamor to join the jobs program which sends them to work in Eastern Europe. Western critics charge that the workers are nothing more than indentured servants working to pay off Vietnam’s debts, but many desperate young adults reportedly try to bribe their way into the program.

The leadership in Hanoi is becoming more candid about shortcomings, although it still strives to put the best face on problems.

“We are poor, but we are not vulnerable,” said Foreign Minister Nguyen Co Thach, at 63 the youngster of the ruling circle. “We are stable. Why? Because between the rich and the poor we have no gap . . . . The poverty is well distributed so there is no social contradiction.”

Indeed, the southern fat cats and high rollers of the war years have mostly fled the country or decided to maintain a low profile. The average civil servant takes home 200 dong a month, about 63 cents at prevailing black market exchange rates and $2 at the official rate; the dong last week was devalued again by 8%.

And at the inflated rates prevailing in the black market here, driven up by the presence of American correspondents and their dollars, that 200 dong monthly salary would not have bought a can of Coca-Cola, which was going for 250. Coke, obviously, is an out-of-reach luxury.

Top pay for highly skilled physicians and government ministers peaks at 500 dong a month-- $1.52 or $5, depending on which exchange rate is used. Rations of rice and other basic foods are subsidized by the government at almost giveaway prices, and housing is free, but an extravagance like a couple of pounds of meat could eat up a whole month’s official salary.

Black Market Flourishes

Many people, especially in the south, supplement their incomes by trading on the flourishing black market, winked at by authorities who euphemistically call it the free market. In Ho Chi Minh City, black market stalls brim with everything from Jordache jeans to Sony television sets, smuggled in from Thailand, Singapore and Hong Kong or shipped in legally by Vietnamese refugees to relatives back home.

Periodically, the government has tried to crack down on these symbols of Western excess, but to little avail. Foreign diplomats in Hanoi say southern decadence is creeping north, where residents are beginning to shed drab peasant pajamas for colorful shirts, blouses and slacks. Corruption and illegal dollar trading are becoming more commonplace. The audio cassette is now bringing Nashville, Motown and Hollywood to Hanoi.

Sent Out of Cities

“I just called to say I love you,” the voice of Stevie Wonder blared the other night from a dimly lit cafe in the center of the capital.

Only about 40% of the southern countryside, the nation’s granary, has been collectivized since the Communist takeover. Past attempts to hasten the pace backfired as defiant peasants cut production.

Planners in Hanoi also uprooted large numbers of city dwellers in the south and sent them to New Economic Zones in an effort to ease urban crowding and develop agriculture on marginal land. But the workers have resisted the program or proved unadaptable to rural life and, in any case, have not had the tools or the training to do the job.

Capitalism is ingrained in the south, and lately the government appears to have abandoned efforts to eradicate it. Dogmatic socialists have been eclipsed by the pragmatists in the upper echelons of the ruling Communist Party.

Last summer, the party Central Committee endorsed major economic reforms designed to give peasants and workers a chance to earn extra money, the kinds of incentives that have proved so successful in firing up the Chinese economy. After fulfilling production quotas, farmers will be allowed to keep excess produce and sell it on the open market. Factory managers will be granted more flexibility to run operations and make personnel decisions.

Deputy Premier Tran Phuong said that in the future, small private businesses, shops and street vendors would be encouraged rather than harassed.

Hint of Political Realism

“The state is only able to control major enterprises,” he told a group of visiting newsmen recently. “We have had (bad) experiences with bureaucracy, centralization and rigid management. We have to have a system of management in which we can encourage all production units to be more productive, flexible and responsive.”

There are signs, albeit tentative, that the new economic pragmatism may be followed by a new political realism as well. Lately, Western analysts note, Vietnamese leaders have been soft-pedaling strident public attacks on the United States while publicly stressing their desire for better ties.

“Before the war ended, they could balance off their two main supporters, the Russians and the Chinese,” one Hanoi-based diplomat explained. “Now the Chinese are the enemy, and they feel uncomfortable being so tied to the Russians. They want to play the Americans off against them.”

After its 1975 victory, the Hanoi government had counted on war reparations and other aid from the United States. But diplomatic relations were never established, so there was no aid, and U.S. trade sanctions were imposed.

Searches Linked to Ties

In some respects, the Vietnamese now seem overanxious and a little ham-handed. While stressing his desire for better ties and an end to animosity with Washington, Thach, the foreign minister, made it clear that the United States must normalize relations with Hanoi before the government here will allow the Americans to search for the remains of U.S. servicemen still missing in action.

“We have no diplomatic relations with the United States,” Thach said in English. “How can we accept a hostile country to come here and investigate our country?”

The MIA question is just one of the issues that continue to divide the two nations. Washington has insisted that Vietnam get out of Cambodia before normalization can be considered. The Hanoi government, afraid to risk the return of the Chinese-backed Khmer regime at its western doorstep, has refused.

The United States is also edgy about the presence of Soviet ships in Cam Ranh Bay, the one-time U.S. naval base on the South China Sea. Soviet long-range bombers also routinely call at Vietnamese airfields.

Washington has also called for the release of thousands of political prisoners, among them high-ranking government officials and military officers from the old U.S.-backed Nguyen Van Thieu government, most of whom have been jailed since war’s end in so-called re-education camps.

Amerasian Children

For its part, Vietnam complains that the United States is dragging its feet on accepting hundreds of thousands of people who have applied to emigrate under the United Nations-sponsored orderly departure program. Many are homeless Amerasians, the offspring of liaisons between GIs and Vietnamese women.

Dozens of Amerasians, freckle-faced kids with Western features such as blond hair, blue eyes or black skin, usually hang out near the downtown hotels in Ho Chi Minh City, begging from occasional Western visitors and trying to hawk peanuts.

Last week, however, the Amerasians were swept up by authorities and have not reappeared. Government guides have told inquiring journalists that street kids have been declared off limits for interviews, as have residents who have applied to leave the country as refugees. Officials are obviously anxious about the impression Vietnam provides the outside world.

Ho Chi Minh City seems in the middle of a clean-up campaign. The streets have been swept clean and shop marquees spruced up. Public buildings have been scrubbed and many painted in pleasant pastels. The stately Central Post Office, with its huge outdoor clock, has been freshened up with bright yellow and green and looks like a building that belongs on Disneyland’s Main Street U.S.A.

Old Buses Repainted

All the dents have been pounded out of the rusting, prewar city buses. The American-built vehicles, having undergone their first paint jobs in years, now ironically are shaded red, white and blue. Even the Dodge and DeSoto nameplates have been retouched.

The black market stalls still operate, but they have been reorganized, at least temporarily, into orderly cooperatives where prices and profits are controlled. However, officials have shut down the street where vendors specialized in books, most of them in French and English.

Billboards outside a government book outlet here last week were advertising basic Marxist tracts which did not seem likely to be big sellers.

The image campaign is aimed at the 200 foreign journalists and television technicians--most of them American--invited here this week to cover the 10th anniversary of what the government refers to as the “liberation” of the south.

Massive American press coverage in the 1960s and 1970s helped turn U.S. public opinion against the war. Authorities admit that they hope news accounts now will help put pressure on Washington to change its hard-line policies toward Communist Vietnam.

“Some people in Ho Chi Minh City complain about us letting all the Americans come here at this time,” said Vu Hac Bong, the top Foreign Ministry official in the former South Vietnamese capital. “We need them to write, we need them (in order) to have a direct voice to the American people.”

Times staff writer Nick B. Williams Jr. also contributed to this story.