Vietnam: a rocky path to economic stardom

Dissidents are jailed and the Politburo's hold on power is unabated, but youth embraces the free market.

The news agency Reuters reported in January 2011 "Sixty percent of Vietnam's 90 million people are under the age of 35.  Many see their path to prosperity tied closely to the private sector, with no need to join the (Communist) party."  Vietnam has suffered from a lack of transparency, and sorely needs better corporate governance.  Yet its record of development over the past decade has been exemplary, the economy growing from US$30bn ten years ago to US$276bn in 2010.

Yet democracy is held at bay, with reports that "subversion has become an increasingly common charge brought against democracy activists in Vietnam - resulting in sentences of up to 15 years in prison, says Nga Pham of the BBC's Vietnamese service."

Even so, the BRICS AND BEYOND analysis in 2007 from Goldman Sachs, an investment bank, predicted Vietnam will overtake Canada by 2050.  By then, Vietnam could be the world's fifteen largest economy with a GDP of US$3,607bn.  The Economist reckons that over the next 39 years Vietnam's population will rise to 112 million.

But "Jacob Ramsay, who follows Vietnam for consultancy Control Risks, said there was an urgent need to adjust economic policies. A continuation of current policies could lead Vietnam's economy to a brick wall at some point," he told Reuters in January this year.

A third of the Politburo was changed earlier this year, with greying politicians replaced by younger Communist stalwarts.   Many newcomers represent provincial interests - the wages of country folk struggle to match urban salaries.  While wealth redistribution is a worthy aim, there are concerns that future economic policy-making could be hindered.

But then as Indian, Chinese and Thai cities have developed apace, rural communities have suffered and fallen behind.  The economic miracle in India which created hundreds of thousands of dollar millionaires hasn't filtered out into urban slums or the countryside. 

Vietnam has had to overcome the devastation of wars against France then America, and peace only arrived in 1975.  It has reconstructed out of all recognition since then.  Its resourcefulness both during the conflict and the aftermath has been astounding.  Its attracted international inward investment and developed valuable global trading links even with past enemies.

It's likely that any apparent hiccups in present economic management will be overcome relatively quickly, despite global media and diplomatic speculation to the contrary.  Current runaway inflation must be brought under control, however.  Inquirer, a Filipino media group, quoted the Vietnamese General Statistics Office when it reported "inflation reached an annual rate of 23 percent this month, official estimates said Wednesday, adding to a year-long price spiral that has hurt businesses and consumers alike.  It is the 12th straight month of increases in the consumer price index."

Despite this, economic growth is projected to be 6.3% for 2011, the second consecutive year it has exceeded 6%.  This is faster than neighbouring Indonesia, Malaysia or Thailand. 

Whether these advances will extend to freeing up democratic activity any time soon is far less likely.  A 56-year old Franco-Vietnamese democracy activist, Pham Minh Hoang, was jailed this month for three years.  He had joined a proscribed opposition group and wrote 33 articles pointing out "negative things in society" and the need for the country to "be more democratic" the BBC reports. The banned organisation he allegedly supported was Viet Tan, a pro-democracy group based in Calfornia which, as we all know, is a state famed for its insistance on freedom of expression.  Ironic, or what?

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