Vietnam poor, and likely to remain so

Press, 29 June 1983, Page 6

Vietnam poor, and likely to remain so

By

lAN MACDOWALL,

Reuter, through NZPA Hanoi Land and people are pared to the bone. There is not an ounce of fat on either Vietnam or the Vietnamese. “No other country in the world is as poor as our country,” says the Foreign Minister, Mr Nguyen Co Thach. The World Bank rates Vietnam’s gross national product at JUSI7O a head a year. An international aid expert in Hanoi says that it may be as low as SNZIOS — the cost of a dinner and a bed for a night at a decent hotel in the West. Whatever the figure is, Vietnam is dirt poor. And, for all the earnest hopes of the Hanoi Government, there is no real prospect of significent improvement, unless ... © Vietnam pulls its troops out of neighbouring Kampuchea and the West restores economic aid. No chance, the Vietnamese say unless what they see as the threat from China is removed. ® The West decides, for humanitarian reasons, to resume aid even if Vietnam stays in Kampuchea. A slim prospect, although Hanoi

hopes that Australia’s new Labour Government may live up to its election pledge to resume aid and be the first to break ranks with other Western States. • Vietnam can reach an accommodation with China, ancient enemy, one-time wartime ally, now viewed again with bitter distrust. Then it could pull out of Kampuchea, cut its armed forces, now more than one million strong, and devote the resources saved to national development. But that is a pipe-dream in the present state of Sino-Viet-namese relations. The prospects are bleak. “These people are in a hell of a bind,” a West European ambassador said, “and they don’t know how to get out of it.” How they got into that bind is simple. A century ago the French transformed a feudal economy into an exploitative colonial one. The rudimentary economic infrastructure left when the French pulled out 30 years ago was wrecked by American bombing and the savage attrition of the 15-year war that ended in reunification under communism in 1975. Rail and bus networks are ramshackle beyond any Western conception of the

term. Roads are littered with broken-down vehicles. The bicycle is a standard means of transport. Power cuts are long and frequent. The first five years after reunification brought a series of natural disasters that crippled the drive for self-sufficiency in food. The crowning blow came in 1978 when Vietnam, chose, or felt that it had no choice but to invade Kampuchea to overthrow the Chinesebacked Pol Pot Government and bring into the open a simmering feud with China. Peking launched a brief but damaging border war in the northern provinces and the West cut off aid because of Vietnam’s invasion of a sovereign State, albeit one whose regime already had been universally condemned in the West as genocidal. Kampuchea scuppered any chance Vietnam had of rescheduling its estimated SUS4.S billion foreign debts, two-thirds of them due to Communist States. Western diplomats in Hanoi reckon that East European economic aid is running at ?USBOO million a year plus military aid which partly offsets the cost of the Kampuchean venture. Spurning foreign aid with political strings attached,

Vietnam has developed plans that depend upon its own resources and the help of its few foreign friends. Nguyen Van Ich, vicechairman of the State Planning Committee, said that in a country that was threefourths peasant, priority went to agriculture. Fisheries and cash crops such as sugar cane, coffee, and rubber would be developed with export markets in mind. The priority in industry is on consumer goods, with long-term investment directed to develop energy and raw materials. Three big thermal or

hydro-electric power stations, all being built with Soviet aid, are due to come on stream this decade, and three big cement plants are being built But some Western experts in Haoni feel that tbese projects may be too ambitious for a country with such a slender infrastructure and limited management resources. Could the country’s mines produce the extra one million tonnes of coal a year needed for the thermal station? they ask. What would happen if a power cut closed one of the con-tinuous-process kilns at the cement works, making expensive repairs necessary? Can Vietnam run the sort of quality control laboratories needed to help it develop export markets if it cannot guarantee continuous power supplies at a stable voltage? In a word, they ask, might small not be beautiful for Vietnam in its present stage of development? They say that some Soviet experts, having first encouraged ambitious projects, are now also having second thoughts about Vietnam’s capacity to absorb them. If Vietnam has hopes of an economic miracle, they rest with the search for

offshore oil. But Western companies dropped out of exploration contracts because of disappointing results and there is no firm indication that a joint Soviet-Vietnamese exploration project has had any better luck. Two key problems are the dearth of skilled managers and the fact that, while Vietnam is anxious for Western aid and expertise, its thinking has been conditioned by 30 years of isolation influenced only by the highly centralised and relatively inefficient Soviet economic model. “These people are living on the Moon in terms of the modern commercial world,” one West European diplomat said. An international adviser on Vietnam’s export programme found the truth of this when he bad to spend his first session with government officials explaining the importance of foreign exchange in a trading country’s economy. Officials admit that corruption is also a problem, at least in the lower levels of State enterprises and in the bureaucracy. Erosion of civil servants’ pitifully small salaries by inflation has contributed to this problem and they, like other workers are en-

couraged to have sideline occupations such as poultry breeding or handicrafts to supplement their income. Extensive underemployment in the cities means that many people “moonlight” with official sanction, one of the most common sidelines being that of kerbside cycle repair to keep Vietnam’s millions of bicycles on the road. Since economic reforms in 1979, factory workers, like peasants, have been on an incentive system, with wages geared to productivity. Even so a typical worker’s annua] income would be the 3309 dong earned by the 750 women at a carpet factory in Da Nang, central Vietnam, for a 48-hour week in conditions that vanished in Western Europe with World War I. That annual wage would buy just 100 bottles of beer in a local hotel catering for foreigners. The Vietnamese showed their guts and resilience in 30 years of war. But these qualitites alone are unlikely to achieve the breathrough to a modern economy. Where and how they will get help, nobody knows. But without it Vietnam looks like remaining the basket case of the communist world.