COLUMN ONE : Asia’s Pearl Is Losing Its Luster : Capitalism has done to Hanoi what decades of warfare, even B-52 bombers, failed to do: threaten the architectural charm of a city treasured as a venerable, if mildewed, museum piece.

Do Duc Hien lives in the ancient city here, a warren of tiny, crumbling houses packed together on narrow streets first settled nearly 1,000 years ago.

Last year, entrepreneur Hien tore down his wooden house and replaced it with a $50,000, four-story “mini-hotel” built of reinforced concrete, with a satellite dish perched on the roof. His building now towers over his neighbors and stands out like a nuclear submarine in the Rose Parade.

“I don’t know anything about architecture,” Hien conceded. “It has a tile roof like all the rest. I don’t think it looks that bad.”

Capitalism has finally accomplished what decades of warfare, even fleets of U.S. B-52 bombers, failed to do: change the face of Hanoi. The city’s Communist leaders are caught in a classic dilemma of whether to permit desperately needed development or take steps to preserve the look of the city before it disappears entirely.

The capital of Vietnam is a venerable museum piece, a place where time stood still. Because of a period of isolation that began shortly after World War II and ended only a few years ago, Hanoi emerged crumbling and mildewed but substantially unchanged from what it looked like in the 1940s, when it was an outpost of French colonial rule.

Many Vietnamese and foreign experts consider Hanoi an Asian pearl, untouched by the modern horrors of boxy office buildings, condominium developments and bumper-to-bumper traffic.

Hanoi has two distinct historic areas--an ancient city settled in the 11th Century and a much larger French quarter established in the period 1880-1930 in an area near the ancient city.

The largest building in the city is the baroque Opera House, modeled on the Paris Opera and completed in 1912. The French quarter is lined with the delightful gingerbread-style houses familiar in the north of France, all laid out on wide, tree-lined boulevards where the loudest sound is the gentle tinkle of bicycle bells.

Equally important to the Vietnamese is the ancient quarter near Hoan Kiem Lake, built on 36 streets still named for the artisans who lived there, such as Shoe Street, Basket Street, Gold Street. The district is filled with classic “tube houses,” a kind of horizontal apartment building, many of which are more than a century old.

“For 40 years, people were not allowed to repair or build houses,” said Cao Xuan Huong, secretary general of Vietnam’s Union of Architects. “Now there is a conflict between preserving tradition and daily life. I’m afraid that daily life will prevail.”

As preservationists see it, Hanoi is under attack on two fronts.

The first assault came mainly from residents themselves; they have been freed by capitalist-style economic reforms enacted in 1987 to earn money and invest it as they please. The change has triggered a building frenzy in Hanoi, where land prices have skyrocketed tenfold in five years. The road from the airport is lined with houses under construction, and many existing homes have an extension on the side or even a new floor on top. The city’s population of 1 million is expected to reach 1.5 million in 15 years.

The other assault comes from foreign developers, who view the Vietnamese capital as one of the last undeveloped cities in the world.

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Although Hanoi is thronged by foreign business people eager to trade here--and an even greater boom is expected when the American trade embargo eventually ends--there is still only one Western-style hotel, little office space and virtually no vacant housing.

As a result, at least eight major building projects have been approved, including several in the French quarter; Singaporeans, for example, plan to put two 20-story office towers on the site of the “Hanoi Hilton,” the infamous prison used to house downed American aviators during the Vietnam War.

Nguyen Lan, chief architect of Hanoi, complained at a seminar in December that he has come under tremendous pressure from within the government to approve huge investment projects because they mean modern development for Vietnam and offer prospects for thousands of jobs to a land plagued by mass unemployment.

While the country wants the development, there is a growing movement of Vietnamese and foreign advisers who want to make it blend in with Hanoi’s cultural heritage rather than obliterate that heritage, as has happened in such other Asian cities as Bangkok and Jakarta.

To preserve the capital’s heritage, the Hanoi People’s Committee approved sweeping regulations in December for the ancient sector of the city, forbidding owners from changing buildings without government approval. But in a land where police earn less than $100 a month, there is still concern that widespread bribery will allow owners to continue tearing down historic houses, which are disappearing at a dizzying rate.

In the quest to preserve the French quarter, also near Hoan Kiem Lake, city authorities have already turned down one project by a South Korean company, which wanted to build a 14-story office building clad in gold mirrors at the water’s edge. It was too much even by the standards of the people’s committee, whose Soviet-era office not far away is widely regarded as the ugliest building in Vietnam.

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The irony is that, until recently, the Vietnamese preached against Hanoi’s alien French architecture, regarding it as a relic of a hated colonial period. “In the 1960s, extremists believed that the old buildings were not beautiful,” noted architect Huong. “They wanted new houses.”

Vietnam’s urban experts have drawn up a master plan whose goal is to force high-rise development away from the city center, into the West Lake area about three miles away. The idea is to make Hanoi low-rise in the center and high-rise along the edges. An Asian consortium has already announced a $300-million development in the West Lake area, including a 500-room hotel.

But there is an angry debate about whether such plans are economically viable.

“We don’t want our city to end up looking like Bangkok,” said Ha Van Que of the National Institute for Urban and Rural Planning, referring to Thailand’s overcrowded capital. “If we allow high-rise construction around Hoan Kiem Lake, it won’t look like a lake anymore. It will become a swimming pool.”

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Planners have adopted a “30-degree rule,” under which an invisible line extends out from the lake at a 30-degree angle. No new construction can be higher than the line, although there is already a dispute about whether the line begins at the lake’s edge or center.

“We’re not for putting the place in aspic; there is an understanding that there has to be economic change,” said John Goodyear, an Australian lawyer who heads the Friends of Hanoi Architectural Heritage International Foundation. “But if you put high-rise buildings in the French quarter, the area will simply disappear.”

Groups like Friends of Hanoi, financed by international donations, have run headlong into plans of foreign developers, who maintain Vietnam is too expensive and too risky for them to construct small buildings. “No one with any money, brains or experience is going to go in and redevelop unless they get economies of scale, and that means high-rises,” said Peter Purcell, who heads Dragon Properties Asia Ltd., a group developing the site of a department store next to Hoan Kiem Lake.

Purcell said he has been forced six times to revise his plan for redeveloping the department store site; it now includes a nine-story office building and a 19-story apartment complex set back from the lake, designed to reflect the French style of the neighborhood.

Asked about the possibility of moving away from the central area, Purcell said developers want to be near Hanoi’s “clearly identifiable center” of government buildings, offices and embassies. “Developers are just not going out into the sticks because some government official said that’s where they should be,” Purcell said.

Prime Minister Vo Van Kiet, the primary backer of Western-style economic reforms, has intervened in the debate at least once, overruling planners and giving a high-rise office a green light. But planning officials said they are hoping to derail some development plans by tying them up in government bureaucracy.

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While preservationists fret about keeping the city center intact, other planners worry about the impact of modern life on Hanoi, especially as the country’s transportation leaps into the 21st Century. A Swedish study recently found that public transportation accounted for less than 10% of the transport in Hanoi, one of the lowest levels in the world. This followed the government’s decision to cut off subsidies to bus companies, forcing them into bankruptcy.

Cars are still extremely rare in Hanoi, and there are just a handful of stoplights. But where there was once an almost silent stream of bicycles and the ubiquitous cyclos pousses --three-wheeled bicycle taxis--they are increasingly replaced by a torrent of deafening motorcycles belching exhaust. There are more than 200,000 motorcycles in the city, one for every five people.

“In Hanoi we have a city that is unique in the world,” said Swedish Ambassador Mats Aberg. “As soon as you get traffic, with the possibility of air pollution, you’re going to approach Athens or Los Angeles. Pollution is already taking its toll.”

The Swedish study called on the Vietnamese to begin to cope with the traffic problem by developing public transportation and imposing limits on private vehicles in congested areas in peak traffic hours, measures such as those in place in Singapore.

There is no keener student of Hanoi’s appearance than Nguyen Vinh Phuc, a retired history professor at the University of Hanoi who has lived for 30 years in the former garage of a French colonial home. The aged Phuc still remembers when American planes bombed Hanoi, not in the 1960s but in 1942, when it was occupied by Vichy French forces.

While he understands the need for economic development, he laments many of the alterations that have changed the character of his native city over the past five years.

“The cities of Europe are like old ladies,” he said in orotund French. “But Hanoi has the beauty of a very young and thin girl. It will be a pity when it is lost forever.”