Vietnam returning to war economy

Press, 16 August 1978, Page 20

Vietnam returning to war economy

Bv a special correspondent in the “Financial Times,” London

Recently, returning to central Vietnam, one Western official was surprised to see a dam building site, where thousands of men had been busy carrying earth on shoulder poles during his previous trip in April, near deserted. The reason, the local authorities told him. was that most of the workers were demobilised soldiers, who have now returned to their units to “meet the new defence needs.” This is believed to be a typical example of how tension with China and the continuing border war with Cambodia is leading Vietnam to once again shift its priorities from economic reconstruction to defence. Western observers in Hanoi believe that most of the 200,000 soldiers who were demobilised in 1975 following the North Vietnamese victory in the South, and who were sent to agricultural co-operatives and factories, are now being called up. In its drive to strengthen the military machine Hanoi has extended the draft age from 18-25 to 16-35 years, and the period of compulsory military’ service from 3 to 5 years. The current total of 2m under arms — including militia — is to be rased to 16m in the near future. Although many of those would do productive work in addition to their military duties, the cost of arming and feeding them is certain to put a severe strain on the Vietnamese economy. Since the end of the war

the Array has been given an increasing responsibility in economic matters. It has created its own economic department to liaise with the Planning Commission and other ministries and has undertaken many important tasks — from building railway lines and roads to clearing forests and setting up farms and plantations. “But now with a large number of troops stationed along the border with China and Cambodia and thousands more despatched to bolster security in Laos, the army will have to go slow on, if not abandon, many of its economic tasks. Naval ships will have less opportunity for fishing after patrolling the Gulf of Tonkin and Gulf of Thailand.” According to a Hanoi official the Vietnamese army last year could raise less than a quarter of its food itself. This year’s figure is likely to be < onsiderably lower. Meanwhile, many new economic zones (where people have been resettled on virgin land) and many established paddy fields along the Cambodian border have been abandoned as insecure. Last year a combination of drought, floods and misi..j.nagement resulted in a grain shortfall of about two million tonnes. Vietnam survived the crisis with the aid of 1.6 million tonnes of emergency imports and by belt-tightening. Although this year’s crop appears likely to be better, sources in Hanoi still anticipate a deficit of around 800.000 tonnes. But if the conflict with Cambodia continues until the

next dry season it could seriously affect harvesting. During a trip to Vietnam’s border region with Cambodia in the Mekong Delta in March this correspondent saw abandoned fields of ripe paddy that peasants would not harvest for fear of being shelled or shot at by the Khmers. The usual strains war imposes on an economy have been exacerbated by the cutoff of Chinese aid and, perhaps more seriously, by the sudden departure of tens of thousands of workers, technicians and engineers of Chinese origin. Western observers in Hanoi tend to agree that while the Vietnamese authorities made life difficult for Chinese private traders (in spite of two decades of socialism there was a thriving market in Hanoi and Haiphong which became more prosperous following the “liberation” of the consumer-goods-rich South) and other cadres suspected of loyalty to China, they did not expect the trickle of Chinese departures in March and April to develop into a mass exodus. Among thousands of Chinese who crossed over to China were factory workers, miners, dockers, teachers, doctors, fishermen and a large number of technicians. Work in a number of factories near Hanoi, and the cement mill in Haiphong, slowed down considerably in May. However, the most serious loss seems to have been suffered by the coal mines, for about 60 per- cent of the miners were of Chinese origin, and it is reliably esti-

mated that in May coal production dropped to 15-20 per cent of normal. This decline is bound to affect not only Vietnam’s own consumption, but also its foreign exchange earnings. Anthracite was one of Vietnam’s principal exports last year, sales to Japan earning S47M, 65 per cent of Vietnam’s earnings on trade with that country. In addition two-thirds of Vietnam’s power is generated from coal. The production of seafood — another important export — is also likely to suffer with the departure of a large number of fishermen. The Chinese decision on

July 3 to cancel all its 80 aid projects has also dealt a serious blow to . Vietnam’s efforts to repair its wardamaged infrastructure and industry. Vietnam’s Thai Nguyen steel mill, set up with Chinese aid in the early 19605, was seriously damaged by American bombing. From 1973 onwards Chinese technicians were working to put the mill back into operation. During a visit to the mill in November 1977, this correspondent was told that about 60 Chinese experts were helping to restore four furnaces. Now with the departure of those technicians Hanoi will have to find other

assistance to run its only steel mill. According to Western diplomats in Hanoi, Comecon, the East European economic group, which Vietnam joined recently, has agreed to take up 10 of the abandoned Chinese projects. No details are available about these, but there are strong doubts as to how quickly or effectively the Soviet bloc is likely to come to the rescue of Hanoi. Progress on the muchvaunted Moscow-aided Black River hydro-electric project, which the Russians claim to be the “Aswan of Asia” has been conspicuous by its slowness.