Politics Keeps Door Closed to Vietnam Economic Recovery

The lobby of Hanoi’s Thong Nhat Hotel is a sort of international waiting room, a place where foreigners kill time between appointments with Vietnamese officials. But Americans are rarely seen there, and that says a great deal about Vietnam’s dashed hopes for postwar aid and economic development.

Ten years after the Communist victory over the U.S.-supported government in South Vietnam, Hanoi and Washington are still estranged, without normal relations. Only a few Americans, mostly diplomats and journalists, ever come here. The problems are political, but most of the impact here is economic.

Hanoi’s hopes for American economic aid stemmed from the agreements that allowed the United States to disengage from the Vietnam War. The Jan. 23, 1973, Paris accord between Washington and Hanoi pledged the United States to “contribute to healing the wounds of war and to postwar reconstruction of the Democratic Republic of Vietnam and throughout Indochina.”

No amount was mentioned, but a personal message four days later from President Richard M. Nixon to Premier Pham Van Dong, listing the agreed “principles” under which the pact would be carried out, said the U.S. contribution “will fall in the range of $3.25 billion of grant aid over five years,” and “without political conditions.”

But negotiations over details of the promised aid soon faltered amid recriminations over charges of violations of the peace accord as well as the matter of missing U.S. servicemen. At home, Nixon found little support on Capitol Hill for aid to the former enemy, and no U.S. aid for postwar Vietnam ever materialized.

Nguyen Tam, general secretary of the Vietnamese Chamber of Commerce, an agency of the Foreign Trade Ministry, said in a recent interview: “Our policy is to do business with any country. If any private American companies want to come to explore the possibilities of doing business, they are welcome.” But none have come.

Gains have been made on American demands for an accounting of men missing or killed in the war. An American delegation recently ended three days of talks in Hanoi on the missing Americans issue, the fourth session this year, and the two sides recently agreed in principle that U.S. excavation teams would be allowed into the Hanoi area to search for missing U.S. servicemen.

But Vietnam’s occupation of Cambodia, which has gone on for almost seven years now, continues to be the major obstacle to improved relations between Vietnam and its non-Communist neighbors and between Washington and Hanoi. Despite proposals by both sides in the conflict, a political solution appears to be no closer. The level of rhetoric may be lower, however.

“It seems to me,” Secretary of State George P. Shultz said on a trip to Southeast Asia in July, “that there must come a point where the government of Vietnam and the people of Vietnam reflect on what they are doing to themselves, let alone to others. . . . The fact of the matter is that the Vietnam economy, the Vietnam standard of life, has stagnated these many years. . . . Their self-imposed isolation is imposing deprivation on their own people.”

Hanoi officials have argued that it was the United States that isolated Vietnam, that the Americans pressured the International Monetary Fund, the World Bank and even the Asian Development Bank to dry up project and financial aid.

Vietnam’s invasion of Cambodia in December, 1978, spelled an end to almost all bilateral aid from the Western nations and from China, a bulwark of support for Hanoi during the Vietnam War and the years immediately afterward.

Since 1979, Japan and Australia have stopped all developmental aid. They and the countries of Western Europe now provide only humanitarian aid: clinics, medicine, flood relief. Sweden has been an exception, but it, too, is now pulling back, reducing its proposed aid by almost 25% this year to the equivalent of $32 million.

The result of the economic break with the West has been ever greater dependence on Moscow. Precise figures were not available but Tam, the Chamber of Commerce official, said 70% to 80% of Vietnam’s trade is with other nations of Comecon, the Soviet-led Communist trading bloc that Vietnam joined in 1978.

Much of the Comecon trade involves bartered goods. Cuba, for example, sends sugar to Vietnam and gets rice, electric fans and hand tools in return.

Vietnamese labor exports are also a factor. Vietnamese are working not only in Eastern Europe but in Algeria, Iraq, Congo, Angola and Mozambique, according to the Foreign Trade Ministry. But Tam said the socialist countries “cannot supply us with all the things we need.”

The capitalist countries sell mainly industrial goods and spare parts. Again the figures are scant, but Tam said 1984 trade with Japan, the No. 1 non-Communist trade partner, involved $150 million in imports and $50 million in exports, mainly of coal, fish and rice.

Singapore, with $72 million in total trade, and Hong Kong, with $50 million, were second and third.

Those American products that find their way to Vietnam despite Washington’s trade embargo come through Singapore or Hong Kong, diplomats here say.

Tran Duc Thinh, deputy director of Hanoi’s Thang Long garment factory, showed a visitor machines from Japan and both Germanys.

“And there,” he said, pointing to a machine stitching seams for Russian jeans, “that’s American.” The machine was labeled “Union Special,” and Thinh said it was acquired through Hong Kong six years ago. It looked old and may have been second-hand.

In the southern part of the country--what was once South Vietnam--much of the industrial plants and many of the vehicles are American-made. Spare parts are a constant need, diplomats here say, and are either copied or brought in through third countries.

The most obvious American trademarks here are Coca-Cola and 7-Up, smuggled in through the ports of Haiphong in the north and Ho Chi Minh City (Saigon) in the south. And while television features Soviet cartoons, cassette tapes are usually of the American Top 40. Stevie Wonder is big.

What Vietnam would like from the United States and other Western countries is investment and export markets. Hanoi’s foreign reserves have been estimated as low as $10 million, barely enough for a few weeks’ needed imports.

According to Westerners in Hanoi, foreign partners will have to arrange the financing and provide the necessary equipment.

“We need cooperation in investment,” Vo Van Sung, assistant foreign minister, said.

Tam explained why government trading companies would be reluctant to take on loans themselves. “Frankly speaking,” he said, “we are in financial difficulties.” A Belgian company, which provided a generous 360-day note for financing, is still awaiting the first payment more than a year later.

Still, Tam said, more than 400 trade delegations from capitalist countries have visited Vietnam in the past year, most of them Japanese. Japan “has a growing economic intelligence network here,” a Western diplomat observed.

Tam said recent visitors included the presidents of the American chambers of commerce in Manila and Hong Kong.

A. Lewis Burridge, the Manila chamber president, said the invitation was extended by the Vietnamese embassy in the Philippines, and he went to Hanoi as a private American businessman, representing neither the chamber nor his company, Sterling Asia, the regional branch of the big pharmaceutical firm.

In a telephone interview, Burridge said he thought that American businessmen in Asia were at least curious about the prospects in Vietnam. He also brought up the Japanese factor, saying that “they have the inside track.”

Rebuild From Bottom Up

He said the Vietnamese need to rebuild their economy almost from the bottom up and added that whoever gets here first will “have the market locked up for a decade or so.” He cited the area of high technology, specifically the need for a new or overhauled telephone system.

A Western diplomat said that “the whole of Hanoi would have to be rewired before the city could get going economically.”

Burridge said he did not think Americans would be reluctant to go into business with the Vietnamese on ideological grounds, “no more so than in Russia or China.” But American businessmen, he said, “don’t feel they have a real go-ahead from their own government yet,” and the problems of frozen American assets and nationalized U.S. properties would have to be worked out.

With Vietnam having little to offer except cheap labor, Burridge and other foreigners said they did not foresee any large Western investments.

Gage McAfee, an attorney and president of the American Chamber of Commerce in Hong Kong, said he had not been in Vietnam in years and knew nothing about any visit by representatives of the chamber. However, he said he would favor open American trading with Vietnam if the issues of Cambodia and the missing Americans are settled.

“I don’t think you can make a nickel in Vietnam right now,” he said, “but you can’t do everything for money. I like the Vietnamese people. They could do a lot more for themselves with the Americans than with the Soviets.”

But, in the meantime, the lobby of the Thong Nhat Hotel will remain a forum for the conversations of Soviet technicians, East German tourists, representatives of the Palestine Liberation Organization, a few Western European businessmen and U.N. diplomats.