Reflections on Vietnam
I just returned from a two-week trip to Vietnam. It is a country I wanted to learn more about. Names of cities like Da Nang and Hue were familiar, but only because – as someone who grew up in the 1970s – they were on the nightly news as part of the reporting on the Vietnam War.
I expected to see some remnants of the war, but there were almost none. In the 47 years since that conflict ended, Vietnam has transformed from suffering under oppressive communist rule to a bastion of free market capitalism.
How it got there is remarkable. Vietnam traces its history back roughly 3,000 years. It has never had a 100-year conflict-free period. It has fought various invaders: the Chinese, French, and most recently Americans.
Following the withdrawal of American forces in 1973, the country was reunified in 1975. An authoritarian, Stalinist regime took power. Many of its citizens, particularly those who sympathized with the Americans, were given long sentences in “reeducation” camps – prisons with primitive conditions. Others fled the country in an exodus known as the “boat people.” Of the 800,000 Vietnamese who fled, nearly half perished at sea.
The communist government nationalized agriculture and industry. In a tragic move, it executed thousands of landowners to distribute farms to the workers.
Farmers worked for the state and had little incentive to produce more than was necessary to satisfy their immediate needs. This led to severe underproduction. A shortage of rice developed, and diets were supplemented with noodles produced from Russian-made flour. According to our tour guide, Yang, those noodles were largely inedible.
The turning point came in 1986, when Nguyen Van Linh was appointed general secretary of the party, overseeing economic policy. Linh had been the mayor of Saigon, where he had experimented with free market policies. Linh quickly liberalized the economy, first by giving landowners and farmers ownership of their properties. No longer subject to communist constraints, rice production soared. This was timely, since the collapse of the Soviet Union in 1989 ended the Russian subsidies upon which the Vietnamese had become dependent.
Starting in the late 1980s, Vietnam’s economy grew at 7% or more and poverty declined rapidly. The U.S. lifted its trade embargo in 1994 and a series of trade agreements between the countries followed.
Vietnam today is one of the fastest developing economies in Southeast Asia. It is a major producer of rice, rubber and oil, and benefits from a large tourism industry. It sill has a one-party, communist government. But that is distinct from the position of general secretary, who controls and maintains its free market economic policy.