America lost, capitalism won Thirty years after Saigon fell, the south has prospered while the north has lagged
The Economist | 28 April 2005 http://www.economist.com/world/asia/displayStory.cfm?story_id=3914886 On the steps of the Reunification Palace in Ho Chi Minh City, a guide recounts the final, dramatic moments of the Vietnam war. On the morning of April 30th 1975, two tanks of the "liberation forces" crashed through the gates of what was then the presidential palace of South Vietnam, in what was then Saigon. One of the tank commanders raced to the roof to tear down the flag of the American-backed regime and raise a communist banner in its stead, symbolically reuniting the two halves of the country and putting an end to 30 years of conflict. The guide himself, however, does not seem very stirred by this story. He tells it only halfway through his tour, as one of a number of historical anecdotes. Like most Vietnamese, he was born after the war, so feels little personal connection to the events he recounts. He is from the north, he says, but has come to the south to improve his English and find a good job. From the rooftop, he gazes not at the famous tanks enshrined in the grounds below, but at the high-rises sprouting from the city's skyline, emblazoned with American brand names such as Citibank and Sheraton. The 30th anniversary of the fall of Saigon may provide Vietnam's elderly leaders and the international media with an occasion to dwell on the legacy of the war. But for most Vietnamese, the country's critical fault-line no longer lies between north and south, or labour and capital, but between those who have embraced the government's recent economic reforms and those who are still dragging their feet. Little trace remains of any hostility towards America�just one, after all, of the many countries Vietnam fought during the past century. It went to war more recently (in 1979) with China, a perennial enemy over the last millennium, and the authorities still seem more suspicious of their northern neighbours and fellow communists than of anyone else. America and Vietnam restored diplomatic ties in 1995, and signed a trade pact in 2000. America is now Vietnam's largest export market. Disputes between the two countries hinge more on tariffs and market access than on war crimes or missing soldiers. Last year, United Airlines resumed flights to Ho Chi Minh City�which still bears the code SGN. A pilot who was lionised during the war for bombing the presidential palace in Saigon is now looking forward to captaining Vietnam Airlines' first commercial flight to America�on one of the firm's ten Boeing jets. Last month, Ho Chi Minh City received an American naval vessel for the second time in as many years. Locals scarcely batted an eyelid at the sight of uniformed American sailors wandering the streets. Tensions between north and south have proved harder to erase. The two regions have always been very different. The warm southern climate, for example, permits three rice crops every year in the Mekong delta, while farmers in the chillier Red River basin in the north can manage only two. In pre-colonial times, southern rulers were more hospitable to immigrants, leaving the south with a higher proportion of ethnic Chinese. Southerners and northerners speak different dialects, eat different food and even�according to popular belief�have different temperaments. Northerners are considered reserved and bookish, while southerners are thought to be friendly and flamboyant�much like the stereotypes of Scandinavians and Mediterraneans in Europe. The war exacerbated these differences. For one thing, the south suffered less from American bombing, leaving it with better infrastructure. What is more, northerners have lived under a communist regime since 1954, whereas southerners have much more recent experience of capitalism. The flight of well-to-do southerners in the face of the communist advance in 1975, and the subsequent exodus of boat people, has left the south with a bigger diaspora. These links to viet kieu, or overseas Vietnamese, give the south a more cosmopolitan outlook, and provide southern businessmen with capital and ideas. All this helps to explain why the south has taken to the government's economic reforms so much more readily than the north. After 1975, the victorious communists abolished free enterprise throughout the country, and forced farmers into collectives. Following a brush with famine in the early 1980s, however, the authorities eased restrictions on private enterprise, first in agriculture, then for foreign investors, and, most recently, for local businessmen. On the whole, the reforms have proved a great success: Vietnam's economy has grown by an average of 7% for the past decade. But the progress has been very uneven (see chart). Ho Chi Minh City alone accounts for 17% of national output, 30% of foreign investment and 40% of exports�far in excess of its 9% share of the population. Local income per head is roughly four times the national average. Throw in the four adjacent provinces, and the share of output rises to 40%, and of exports to 70%. But to dwell on the enduring differences between north and south is to ignore several key points. First, regional variation in Vietnam is much more complicated than that. There are plenty of poor southern provinces and rich northern ones. The Central Highlands, a mountainous region of the south, has much more in common with Vietnam's rugged border provinces with China than with the prosperous Mekong delta. The central part of the country, encompassing provinces from either side of the former political divide, is as distinct as the north and south, with its own dialect, cuisine and climate. The government, at any rate, always takes pains to make sure senior offices are divided equally between north, south and centre. That is why the current prime minister comes from the south, while the head of the communist party is from the north, and the president from the centre. Moreover, northerners have no lack of entrepreneurial drive. The streets of Hanoi are so crowded with merchants that hawkers often take turns to occupy the same bit of pavement at different times of the day. Many northerners, such as the guide at the Reunification Palace, migrate south to improve their economic prospects. Many of the most successful businesses there are run by northerners. AFP AFP The wheel of fortune Last year, a group of Vietnamese and foreign academics analysing the differences in investment and growth rates between north and south came to the conclusion that the attitude of local bureaucrats explained the disparities better than any other factor. In theory, the same investment law applies throughout Vietnam, but some provincial governments are more accommodating than others. Ho Chi Minh City, for example, has refurbished a beautiful colonial building as an investment-promotion office. English-speaking officials enumerate the city's many advantages with the help of PowerPoint displays and glossy brochures. The city government, explains one, can process applications for various business permits online. It is also starting up an "e-discussion" scheme to answer investors' queries, in both English and Vietnamese. By contrast, Pham Huy Dap, an investment-promotion officer in the northern province of Bac Giang, shows visitors to a dim, damp and cramped office, without a computer in sight. His sole promotional material is a poorly printed leaflet describing plans for a new industrial estate, in Vietnamese only. The local economy relies more on state-owned firms than on private enterprise, he explains. The biggest employer is a government fertiliser factory. No wonder that between 2000 and 2003 the province received no foreign investment at all, and only $24 per head in domestic private investment, compared with national averages of $88 and $105. But even Vietnam's most benighted provinces contain inklings of change. Bac Giang is setting up a "one-stop shop" for investment approvals, and creating an investment-promotion website. The new industrial estate has now attracted some private firms from China, just a few hours' drive away. Labour is cheaper than in Ho Chi Minh City, and the infrastructure less congested. All provinces, Mr Dap explains, are competing with one another to offer simpler procedures and more enticing incentives, in the hope of attracting more investment. The forward march of entrepreneurialism, it turns out, is proving just as infectious and irrepressible as the communist insurgency was during the war. ------------------------ Yahoo! Groups Sponsor --------------------~--> What would our lives be like without music, dance, and theater? Donate or volunteer in the arts today at Network for Good! http://us.click.yahoo.com/TzSHvD/SOnJAA/79vVAA/NJYolB/TM --------------------------------------------------------------------~-> �������������������������������������������������������� This is ZESTEconomics. 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