International Business : To Vietnamese Vendors, 'Open Market' Means Just That : Asia: Peddlers prefer to eke out a living on the streets. Police sweeps and new, covered facilities fail to unclog the cities.

From Reuters

Le Huu Dung is a freewheeling capitalist. With a basket of vegetables balanced on the front of his bicycle, he serves customers easily but can still pedal clear of trouble at the first sign of police.

"They try to chase us away, but then we come back," the eager 18-year-old said, adding proudly, "They never catch me."

Dung is one of an army of illegal sidewalk vendors who have taken communist Vietnam's open-market economic reforms quite literally.

They have transformed the walkways of the capital--barren of diversion before the economic opening took off in the late 1980s--into a movable feast that often stalls traffic and drives authorities to distraction.

Now that the U.S. economic embargo has been lifted, a plethora of new and enticing goods could find their way into this emerging market.

Turn almost any corner in Hanoi and you'll find women with baskets of fruit and vegetables lining the streets, makeshift restaurants with pots of boiling chicken arrayed across the pavement, and small stands offering everything from cigarettes to drinks to magazines.

Many of the vendors in the impromptu markets--known as "frog markets" because they hop around--have migrated from the countryside in recent years as Vietnam's new economic policies have spurred business growth and sparked dreams of quick money.

They have had to dodge fresh state crackdowns on unlicensed peddlers and resist efforts to herd them into one of the state-sponsored covered markets recently built in Hanoi.

A government official said police regularly sweep through many of the markets to disperse the vendors and levy fines, but they lack the personnel to do it every day.

"As soon as we leave, they come back out again," he said. "The penalties for a violation are not big enough to stop them."

An unlicensed vendor can be fined the equivalent of $2, a considerable sum for an individual whose daily earnings may amount to about 50 cents.

But it's worth the risk, many vendors say.

"We are country folk. This is what we do," said Dung, who sells produce grown on his family's farm outside the city. "Before I sold vegetables, I sold rice."

Le Thi Thoa, 63, has sold watermelons and papayas from the same street corner for 10 years. She said there are more peddlers now and that the police are more strict with them.

"They really don't want vendors on the sidewalks anymore," Thoa said as she sliced a watermelon for a customer. "But the police sympathize with me, because I am old. They agreed I could just sit here.

"If they come through, I have to leave for a while, but then I can come back."

Authorities say they have cracked down on unlicensed vendors in part because the crowds they attract are contributing to Hanoi's traffic congestion.

The phenomenon is not limited to Hanoi. State television recently aired a report from the port city of Haiphong, showing trucks inching their way through crowds thronging a makeshift market.

And official newspapers reported recently that Ho Chi Minh City officials were planning to enforce fines on pavement vendors and on those who rent sidewalk spots to them, in a campaign to "restore order."

They also announced plans to build covered markets designed to lure peddlers off the streets, a policy that has been tried in Hanoi with little success.

The city has spent nearly $3 million in the last two years to build four covered markets and to upgrade 20 permanent makeshift markets, only to have them remain half empty. The vendors prefer the streets.

About 300 clothing merchants at Hanoi's new Hom market went on strike last summer to protest having paid up to $5,000 for 10-year leases in the covered market while other vendors could still hawk their goods on the pavement.

"When they offered us the space here, they said they would ban all the vendors down on the street," said one of the merchants. "But they're still there. We could make more money if we were out on the street."

The merchants marched on the National Assembly to demand action, but they dropped their strike after two months. Now they sit without customers as crowds fill the streets just outside.

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