1.1 Introduction
Vietnam experienced a very difficult twentieth century. It started the century as a French colony. After the French were repulsed in 1954, Vietnam experienced an internal struggle for power at the same time as one party in that struggle (mostly the North with some support located in Central and Southern Vietnam) fought against the American âhelpersâ. Both the French and American opponents were militarily superior, and the Northern Vietnamese won by accepting an incredibly high number of casualties. This meant that any industrial base acquired under the French was decimated. Although the âAmerican warâ ended more than 40 years ago, the US-led embargo dragged on for another two decades. The first 94 years of the century were economically horrendous. Since then, the country has had barely 25 years of normality to build up an industry and skills base. The wars of the twentieth century have also left a legacy of (fading) tension between the hierarchy-oriented North and the market-oriented South. Also, as in many countries in Southeast Asia, locals of Chinese descent are prominent in the economy.
Vietnamâs government used the years under embargo to test and discard several doctrinaire communist methods borrowed from Russia and China for dealing with economic policy, from communal farming to command economics. While it is still true that local and central governments can be heavy handed towards their citizens and there is also some evidence of state-related actors carrying out cyber warfare on behalf of well-connected private sector actors (Carr 2017; Lyngaas 2019; Mitre 2019), successive administrations have been realistic and pragmatically visionary in creating an environment that is business-friendly and allows entrepreneurs to flourish. Several chapters in this book detail this, especially Chapter 2 on the evolution of economic policy in Vietnam, Chapter 3 on the privatization process and Chapter 6 on financial services.
Vietnam now has become a land of business opportunity for locals and for foreigners. Vietnam is worthy of consideration by any business looking to expand internationally, particularly into Asia.
Southeast Asia is a fast-growing region and, of the larger economies in that region, Vietnam and the Philippines are the fastest growing. Cambodia, Laos and Myanmar are also growing as quickly, but have small economies that are far less developed. Of the more advanced economies in the region, only Malaysia exhibits a comparable growth rate. Between Vietnam and the Philippines, who are neck and neck in economic growth, Vietnam is clearly far friendlier towards foreign business investment than the Philippines. Since their devastating experience of free trade with the United States at the time of independence, the Philippine business elite has influenced government policy to limit foreign competition and ownership. The âPeople Power Revolutionâ did not change this. Since the early 1990s, Vietnam has gradually done the opposite, both opening up to foreign investment and increasing the portion of the economy that is market oriented. There is increasing opportunity in Vietnam.
Vietnam does indeed have a communist government. However, governments are run in practice and not in theory. The contrast with regimes in other countries is that the politicking is done within the Communist Party. Although the quest for power involves instances of sponsorâpatron relationships, it is far less damaging than the feudal-like patronage to be found in countries such as the Philippines. Politics in Vietnam also appears to be less dumbed down than it appears to be in countries like Canada and the United States. Finally, the fading memories of the poverty of the previous century perhaps mean that more politicians are patriotic than in other countries. Whatever the reasons, the track record of Vietnamâs government is one of enlightened economic policies and respect for the property of foreign firms. Government management of the COVID-19 pandemic illustrates its competence and willingness to act as necessary, although no one foresees what the state of the pandemic will be when these words are read. Bereft of the resources that allowed Singapore, Korea and Taiwan to do extensive testing, the government of Vietnam was the first to act outside of mainland China and Taiwan. A few local lockdowns were imposed in early January 2020. There was effectively no classroom instruction after mid-January because the government interdicted it after Tet, the Lunar New Year holiday. Most schools moved quickly online, and the government informed citizens how to slow the transmission of the virus from hand washing to separation and masks, including a catchy video clip that went viral in several countries.
Tourists arriving by air from abroad who apply for visa on arrival are surprised to see uniformed men and women processing their documents. They may think they have landed in a police state. However, the...