Vietnam, a Would-Be Asian ‘Tiger,’ Is Looking Clawless


After several years of heady growth and enthusiastic support from international investors and donors, Vietnam finds itself facing a sobering reality: Those forecasts that it would soon join the elite fraternity of Asian nations known as economic “tigers” were wildly premature.

Though Vietnam has made remarkable progress, the economy has slowed in recent months, everyone from the World Bank to Secretary of State Madeleine Albright has criticized the timid pace of reform, and the eagerness of foreign investors to get a toehold in Asia’s newest emerging market has dimmed. At the heart of Vietnam’s slowdown is the inherent conflict of adopting a free-market economy while holding on to a Communist political structure.

These problems now belong to a new national leadership, chosen in secret by the Communist Party and confirmed this week by the elected 450-member National Assembly. The leaders who will take Vietnam into the 21st century are younger and better educated than their predecessors and appear committed to continuing--and probably stepping up--economic reform.

“We badly need young leaders,” outgoing Prime Minister Vo Van Kiet said this week. “The hand-over of power is necessary for the development of the country.”


Replacing the retiring Kiet, 74, is Phan Van Khai, 63, a southerner and former deputy premier who is highly regarded by Western diplomats as a pragmatist and reformist. The largely ceremonial role of president will be filled by Tran Duc Luong, 60, who is also a deputy premier. He takes over for the ailing Le Duc Anh, 76, an army general.

The country’s most powerful political leader--the secretary-general of the Communist Party, currently Do Muoi, 80--will be secretly chosen sometime in the months ahead by the Communist Party. Among those mentioned as a successor is Le Kha Phieu, 65, an army political commissar who is considered a conservative Marxist. One of Vietnam’s three top positions traditionally goes to a military man.

Although only 2% of the country’s 75 million people belong to the party and membership is by invitation only, Vietnam remains one of the world’s few nations where communism still dictates the agenda. But the party has shed its Marxist rhetoric, permitted the rubber-stamp National Assembly to be a bit feisty and independent-minded at times and re-expressed its commitment, in words if not in deeds, to developing a free-market economy.

Still, foreign investors are increasingly frustrated. With the decision-making process gridlocked for months as everyone waited for a new leadership to be named, Vietnam has been reluctant--and sometimes unwilling--to privatize state-run enterprises, consider a currency devaluation, accept capitalistic notions such as using unemployment as a tool of economic management or adopt legislation to create an effective judicial system.

“At least with a new leadership in place, an obstacle has been removed to making decisions,” said a Western diplomat. “Whether Vietnam will actually make the decisions that are so essential is another matter. But I imagine they took note of China’s plan to liberalize its economy and sell shares of state-owned companies.”

Party leaders did not mince words at the National Assembly’s opening session Saturday. They talked in blunt terms about the scourge of rampant corruption, criticized a bloated bureaucracy that is often unresponsive and voiced concern over demonstrations in northern Thai Binh, where former soldiers and retired government workers joined rice farmers in protesting local corruption and excessive taxation.

Almost everyone agrees that the heralded doi moi, or economic openness, program that started in 1986 has sputtered to a crawl. The United States, which quickly became Vietnam’s sixth-largest foreign investor when the trade embargo was lifted in 1994, has slipped back to No. 10. Some businesses have left, unable to sustain short-term losses in what is a long-term market. Others have frozen new investments.

Despite investor discontent, the Vietnamese themselves, particularly in the cities, appear upbeat, convinced that their lives have improved greatly under doi moi. The shops are full of consumer goods, the streets clogged with motor scooters. Opportunities abound, young entrepreneurs are everywhere.


“There is no turning back,” said a former soldier in the North Vietnamese Army who is now an English professor. “The young today have opportunities we never dreamed of. It is inconceivable that this whole process, however it gets there, can go anywhere but forward.”

Since Ho Chi Minh’s death in 1969, political leadership in Vietnam has not focused on any one office or individual. Decisions are made by consensus, and political bodies strike a balance to take into consideration the interests of various groups: Communists and businesspeople; reformists and conservatives; northerners, southerners and those from central Vietnam; and the military.

It is a system that served Vietnam well during war but one that has proved cumbersome in a complex peacetime society.