Summary: Dr. Hoat argues that to address the economic crisis of the country, communist Vietnam must shed its ideological and political monopoly and promote economic and political programs of modernization and accountability. Drawing upon his personal experiences in Vietnam as an educator and political prisoner, Dr. Hoat offers an insightful analysis of the current state of Vietnam and its possibilities for the future.
In 1971, I, along with my wife and child, returned to Vietnam from the United States to contribute to the process of nation-building, particularly in the area of education. My wife and I both worked at Van Hanh University, the only private Buddhist university in Saigon at the time, in the hope of strengthening institutions of higher learning for Vietnamese young people. When the Communists overran South Vietnam by force in April 1975, I remained in Vietnam, believing that the Vietnamese people might have an opportunity to better their lives now that the destructive war had ended. But the communist leaders soon destroyed this opportunity. They continued to assert the communist view of proletarian class struggle, seizing shops and enterprises from entrepreneurs and crushing the emerging market economy, an economy which 15 years later they would try to revitalize. They also confiscated all private cultural and educational institutions which only 15 years later would finally re-emerge. They monopolized and controlled all activities in the realms of the economy, culture, religion, education, media, and politics. Indeed, the communist party became the omnipotent power over the entire populace, over all institutions - legislative, executive and judiciary.
I soon realized that Vietnam had squandered an opportunity to move forward towards progress, development, and civilization, an opportunity upon which other countries in Asia, including South Korea, Taiwan, Thailand, and Malaysia had successfully capitalized. Since Van Hanh University was confiscated and converted into a student dorm, I could no longer concentrate on training and research. Our ten-year effort to build up a Vietnamese high quality institution of higher learning along the models of Harvard or Oxford was shattered to pieces. Before I could assess my future, however, I was incarcerated. The authorities accused me of being "anti-revolutionary," "reactionary," and a "CIA cultural agent" without a scintilla of evidence. An "expert" was sent from Hanoi to investigate my case. Though he could not discover any evidence to substantiate the authority's accusation even after intensive investigations, he concluded in his report that although I had not been a CIA agent, I could become one at any time! As a consequence I was imprisoned for 12 years without trial.
In 1988, after the United States and Vietnam had agreed to disengage all re-education camps as the first step toward normalization, I was released from Chi Hoa prison, only to realize that I could not keep silent. Traveling along the country with my wife and our youngest son, I discovered that my country was devastated with poverty, backwardness and dictatorship. I remember returning to my own village for the first time since I had left for the United States in 1954. Located about 10 miles from Hanoi, the villagers were so poor, yet dared neither to complain nor to speak ill against the cadres and the government.
In 1990, the collapse of communism in Eastern Europe and the Soviet Union has opened a new page in world history. Losing its international support, the Communist Party of Vietnam (CPV) had no choice but to adopt a "Renovation" policy, which literally means returning to the market economy which they had earlier destroyed. Renovation was officially promulgated by the Constitution of 1992, which recognized the private economy as part of the multi-sector economic system. Renovation was able to save the country from total collapse. Living standards were improved, and the country became the third world exporter of rice only five years after the peasants were liberated from agricultural cooperatives. GDP increased from over US$100 in the 1980's to about US$370 in 1999, and Vietnam was beginning to attract foreign investors. But Renovation reached its peak in 1996 and began to decline in 1997. In November 1997, Prime Minister Phan van Khai acknowledged that foreign direct investment had decreased 30% in comparison to 1996. This declining trend has not been halted. In his speech delivered in November 18, 1999, Prime Minister Phan van Khai admitted that Vietnam experienced the "lowest rate of economic growth since 1990." As of June 30, 2000, foreign direct investment decreased 46% in comparison to 1999 while total domestic investment decreased 14,7%. Although Vietnam continues hold the rank of the third rice exporter nation in the world market, peasants' income in 2000 decreased 30% over 1999.
Of course, the Asian financial crisis was partly responsible for bleak investment landscape, especially since newly-industrialized Asian countries like South Korea, Taiwan, and Hong Kong contributed the largest percentage of foreign direct investment in Vietnam. However, experts agree that Vietnam was less affected by the crisis than many other countries in the region. Rather, the present economic recession in Vietnam has internal causes. Though a multi-sector economic system is accepted, to uphold a market economy "with socialist direction" Hanoi continues to grant the state economic sector "the leading role" (Constitution, 1992, Article 19). Consequently, state enterprises receive substantial subsidies despite the fact that most of these enterprises suffer losses, thus creating a heavy burden on the state budget. Hard-line Politburo members hold as their number one priority the party's survival rather than the development of Vietnam. They are reluctant to accept the reform recommendations of the World Bank and the IMF, especially in areas where reforms may lead to the weakening of the party's control and power. Such areas include finance, banking, the national budget, and state-owned enterprises. Slow-paced reforms in these areas have impeded the development of a free market economy in Vietnam. As early as December 1996, Prime Minister Vo Van Kiet recognized that Vietnam was in the midst of a second crisis. World Bank and IMF experts agreed, urging Vietnam to carry out new reforms, or Renovation: Phase Two. In 1997, they even warned the communist leaders that half-hearted gestures of reform could not only exacerbate the crisis, but also threaten the survival of the regime itself. In fact, riots have occurred in many villages, both in the North and South of Vietnam, from Thai Binh province in 1997 to Nam Dinh in June 2000, and recently in Ca Mau province in the Mekong Delta, where the peasants destroyed all the dams. Young people often fight with the police in Hanoi, Da nang, and Ho chi Minh city whenever they have a chance. The unemployment rate in the cities has reached about 20% of the labor force. At the same time, the population becomes younger than ever, with over 50% now under 35 years old. Most of them hold unstable jobs due to the weak private economic sector and cannot continue beyond secondary education due to inadequate and costly institutions of higher learning.
Thus, poor and ill-treated rural peasants, who constitute about 80% of the population, and the unemployed young populace who comprise over half of the population present not only a dim picture of Vietnam today but also represent a great threat to social and political stability in the near future. Renovation: Phase Two is urgently in need as recommended by the IMF and World Bank experts. In January 1999, a representative of IMF in Hanoi warned that without significant changes in policy, not only would 1999 be a precarious year, but "the next 5-10 years will be very difficult."
The Party's leaders are well aware of this situation and of the need for a new phase of reform. They realize that economic development and improvement of peoples' lives are the sine qua non not only for the nation, but also for the party's consolidation of political legitimacy and power. However, economic liberalization, with national markets freed from rigid governmental control and opening to global markets, appears to be the only path toward development. But, as Robert J. Barro has put it, "In the long run, the propagation of western-styled economic system would also be the effective way to expand democracy in the world." And French President Jacques Chirac, in his visit to Hanoi in 1997, affirmed bluntly that "in the process of globalization, economic reforms would naturally lead to political liberalization" This projection of political liberalization remains outside the agenda of the present leaders of Vietnam. Indeed, the possibility of a "peaceful evolution" away from a political monopoly has obsessed them since the collapse of Eastern Europe and the Soviet Union. Herein lies the real cause of the present deadlock. Accordingly, the only solution to Vietnam's economic stagnation lies in its leaders, who must prioritize the development of the country over the ideological and political monopoly of communism and the party.
This solution has been recognized by many others. For example, a veteran communist leader, Le Gian, proposed in a letter sent to the Politburo on September 22 "to temporarily put aside the slogan of socialism" because for him, what Marx and Lenin predicted for communism and socialism had proven to be wrong. He even proposed to change the name of the country from Socialist Republic of Vietnam to Democratic Republic of Vietnam, or simply Vietnam. Democracy advocates and dissidents in Vietnam, communist or non-communist, share many of his ideas. Economic liberalization is necessary for economic efficiency and development, but in view of globalization and the new high-tech economy, economic freedom cannot exist in an authoritarian polity.
However, the crisis in Vietnam today is not merely economic in nature. It is also a crisis of politics, of national direction and strategy. It is the conflict between communist ideology and the demands of the time. Before 1975, the party benefited from solid international support, both communist and non-communist, for many decades. After the war, however, the CPV chose the Soviet Union over China only to find themselves isolated and alone after the collapse of the Soviet bloc in 1990. Since 1990, the CPV has attempted to maneuver the fragile and sensitive relationship with China on the one hand, and the United States, ASEAN and other democratic countries on the other. These new relationships are quite different in nature from the cold war alliances. There is no longer a clear demarcation between communism and capitalism, between national liberation and imperialism. A Yalta bipolar world was replaced by a Malta new world order. Indeed, a new battle has begun: the battle between progress and backwardness, between human dignity and inhuman acts, between democracy and dictatorship. In this global exchange, it is democracy, human rights and development, not communism or capitalism, that form international concerns. On June 14-25, 1993, the World Conference on Human Rights, the first largest governmental and non-governmental international conference on human rights sponsored by the United Nations, convened in Vienna. The Conference declared that "the universal nature" of human rights and all basic freedoms "is beyond question," and that "it is the duty of States, regardless of their political, economic and cultural systems, to promote and protect all human rights and fundamental freedoms." The Conference also affirmed that "democracy, development and respect for human rights and fundamental rights and fundamental freedoms are interdependent and mutually reinforcing."
In its most recent world development report, World Bank experts have pointed out that democracy is one of the most apparent trends on the globe in the last decades of the 20th century.
The proportion of countries that are considered democratic has more than doubled since 1974. In a worldwide shift, people are demanding a larger say in the way their governments are running. In addition, demands for increased decentralization of power often accompany democratic trends.
These global trends of human rights and democratic decentralization conflict with the principle of "democratic centralism" in communist Vietnam. The party leaders give the people and the party members four rights: the rights "to know, to discuss, to do and to inspect". However, they retain the most crucial right: the right to decide. Thus, they decide what the people can know, what they can discuss, what they can do, and what they can inspect. This political model of "democratic centralism" is hardly feasible in a global informational, economic, and political reality where fast, inter-related, and multi-faceted actions dictate success or failure. This centralism is ill-conducive to the development of the country and hinders the process of integration of Vietnam into the modern world. Consequently it has stirred up strong protests from human rights and democracy advocates both within and without the country.
Since 1997, under strong pressures both internal and external, the communist leaders have softened their grips on dissidents in Vietnam. They have released prominent political and religious prisoners and modified their methods of suppressing dissidents. However, local governments down to the village level are allowed to place any citizen under custody anywhere from six months to two years without trial. Thus, instead of sentencing dissidents and sending them to long-term forced labor camps, the authorities now harass and house-arrest them, isolating them from their friends and colleagues. However, the regime continues to reject political pluralism and human rights, labeling these as "lies and cheating." The army even issued White Paper in September 1998 to denounce the "plots to interfere in Vietnam's internal affairs in the disguise of 'human rights' and 'democracy' . . . for the purpose of replacing the current political and social system. . . ." Instead of concentrating on economic problems, the Politburo continues to stress political stability and party supremacy. Vietnam, in the beginning of the year 2000, "is again faced with the danger of falling behind and living under the shadow of its traditional enemy while retaining a system that has proved to be a failure."
Thus was the situation in Vietnam before the trade agreement. Last year, on July 25, Vietnam signed a trade protocol with Washington only to freeze the accord in October. The prospect of opening Vietnam's markets to foreign competition is too intimidating to conservatives in the Politburo. The historic accord was signed on July 13, with some adjustments aimed at pacifying the conservatives. It will be another year before the agreement will be ratified, and anywhere from three to nine years to be implemented in the most sensitive areas, related mostly to cultural, informational, and publication businesses. It appears that the hard-line conservatives of the CPV want to buy time to hold back the unavoidable: democracy.
The problem lay not in the trends of liberalization and democratization, but in their speed. The reluctance of the communist leaders to smoothly transform Vietnam from authoritarianism to democracy creates a time bomb of social unrest and political upheaval. Though the positive effect of free trade on liberalization of the society is undisputed, free trade on its own will not result in freedom, democracy and respect for human rights. Rather, free trade must accompany an open society defined by transparency and accountability. Free competition provides a key factor for development, but it should be applied not only to businesses but also to politics and culture if Vietnam is to become a country of peace, justice, and sustainable development. Free trade will benefit the people only if accompanied by a government democratically and freely elected by the people.
To dismantle the time bomb of riot and chaos which would threaten regional instability, Vietnamese people must have open to them all the doors to the world -- economic, cultural, educational, and informational. I support an open-arm policy between the Vietnamese diaspora and the people inside Vietnam. Let us encourage personal relationships between Vietnam and the United States in which Vietnamese-Americans, with their intellectual and financial strength, may play an influential role in modernizing and democratizing Vietnam. Let us work together, both American and Vietnamese-Americans, to build up a New Vietnam, despite of and challenging the present dictators who want to control and impair the process of integration in Vietnam. Let us surmount the hurdles set up by the dictators and open Vietnam to the global community, expanding Vietnam both geographically and intellectually to the new world. In so doing, I strongly believe that we shall see emerge a Vietnam of prosperity, compassion, and respect for human dignity.
IMF estimates, 2000.
Dow Jones, November 21, 1997.
Xinhua, November 26, 1999.
Thoi Bao Kinh te Vietnam (Vietnam Economic Time, June, 30, 2000)
Saigon Giai Phong (Saigon Liberation), June 26, 2000
IMF figures, 2000.
Far Eastern Economic Review, December 18, 1997.
IMF estimates, 2000.
Reuters, January 26, 1999.
As cited in Juan D. Lindau and Timothy Cheek (edt.), Market Economics and Political Change, (Maryland: Roman & Littlefield Publishers, Inc.,1998), p. 87.
AP, November 13.
Personal Document in Vietnamese.
"Vienna Declaration And Programme Of Action", General A/Conf.157/23, 12 July 1993, (Original: English) (UN General Assembly Document), I.: 1,5,8
The World Bank. Entering the 21st Century. World Development Report 1999/2000. (London: Oxford University Press, August 1999), p. 28.
"da? bie?, da? ba?, da? la?, da? kie? tra"
Administrative Detainment Regulation, Directive No. 31/CP issued by the Prime Minister, April 14, 1997.
South China Morning Post, August 17, 1999.
Nguyen Manh Hung, "Vietnam in 1999. The Party Choice," Asian Survey, January/February 2000, pp. 110-111.