Platt Perspective on Business and Technology

Vietnam, doi moi and the search for business and economic strength and global relevance 4: the quest for an enabling 21st century infrastructure 1

Posted in UN-GAID by Timothy Platt on March 20, 2015

This is my fourth installment to a series on Vietnam (see the UN-GAID directory, postings 34 and following for Parts 1-3.) I began this series by listing a set of three basic organizing topics that I would discuss here, with an overall goal of fleshing them out by addressing them in a larger, fuller context. The three points of discussion for this series are:

• Vietnam’s growing role in international commerce and the business systems that make that possible,
• Their active and still expanding programs of basic infrastructure development that would make this possible, and that would facilitate their country’s active participation in the global community as an equal and a peer,
• And the closely related issues of how other countries relate to and interact with Vietnam. And in anticipation of that, I note here that I will discuss at least some of the complex partly positive, partly negative realities of the relationship between Vietnam and China, and the likely emergence of closer alliance between Vietnam and the United States and at least partly because of that.

I have primarily focused up to here on addressing the first point of that list, with only occasional supporting comments added that relate more to the next two points, as would be needed for the that first step discussion. I turn in this posting to more directly consider the second point as repeated above. And I begin that by repeating a detail that I have noted repeatedly up to here in this series, as it is central to understanding this country.

• Vietnam is a communist country. It has a one political party system and I add that that one party is run by people who are true believers in the orthodox religion that communism in fact is. The card carrying party faithful in Vietnam’s communist party are also for the most part true believers too, even if they often seem to disagree on what that means when principle and belief are applied to the real world that they have to function in, and with all of the consequences that emerge from their decisions and actions.

Vietnam is at the same time a nation of entrepreneurs, and while there in that country I have repeatedly heard members of this increasingly active group claiming that theirs is a capitalist country now in fact, even if not in formal identification. Both sides of this collision course of contrasts and differences have held influence and both have represented truth for a generation and more now, and officially since the formal 1986 adaptation of an economic development and reformation policy of đổi mới, or renovation.

Up to here I have primarily written in this series of the divergence from strict communism and certainly from its rigid orthodoxy, as has been compelled by the vision of economic growth and strength that a program like đổi mới offers. That point of focus has perhaps been inevitable as I have been writing in large part about the entrepreneurs of Vietnam and I have been discussing their country from their perspective. I turn here to consider national infrastructure development. And in the course of that I will of necessity have to address issues of governmental regulatory oversight. And both sides to that mean that I have to shift directions to discuss this country from the perspective of its still formally being a communist state and both in principle and in legal fact.

Every community in Vietnam has its communist party meeting hall and that is the one place in town where you are certain to see both a Vietnamese flag flying, and a communist hammer and sickle flag too. You see red Vietnamese flags everywhere with their one white star in the center; the Vietnamese are very patriotic, and perhaps particularly so at a time like this when their country is being challenged yet again from the outside, by their biggest neighbor: China. Those ubiquitous party meeting halls fly both flags and you virtually never see that hammer and sickle flag anywhere else.

What is đổi mới? I offer here, a link to a Wikipedia entry that seeks to answer that but I would take a very different approach to addressing that question here, at least for purposes of this discussion.

Đổi mới represents fundamental change. Vietnam had a communist-style centrally administratively planned economy until 1986 and it was a disaster, relegating the country to an impoverished, have-not future.

Other communist countries were experimenting with and even adapting change then, and introducing market reform and even overall economic reform, at least in addressing the more immediate economic and overall business and industrial development pain points that they faced. The Soviet Union experimented with perestroika and both economic and political reform. Vietnam’s more immediate neighbor to the north: China, has experimented with a similarly wide-ranging restructuring and reform and in that regard I cite just one such initiative here that was tried under the guidance of Deng Xiaoping, with his “it doesn’t matter whether a cat is white or black, as long as it catches mice.” Deng is still considered a reform giant in China from that and from his leadership in opening the doors to dialog and trade with the West.

But let’s consider at least some of this history here in a little more detail.

• The Soviet Union ultimately collapsed and ceased to be as a communist nation, and Mikhail Gorbachev: the father of perestroika as a realized course of action was its last national leader. But that collapse did not take place unto several years after Vietnam first made its party and government supported decision to attempt change through their đổi mới initiatives. So perestroika still looked to be a realistic, viable path forward for a communist country to both survive and thrive in an increasingly competitive global community and as an equal among nations.
• China has tried experimenting with change several and even many times since their first test attempts to loosen their system’s hold through programs of selective reform, starting with Mao Zedong’slet a hundred flowers bloom” campaign – which was just as quickly ended from fear of the diversity of opinion that was expressed when their people suddenly felt empowered to speak out. That experiment in openness and change was ended by initiation of what can only be called a reign of terror. So China backed away in fear from its earlier attempts at reform with waves of brutal repression, but only to once again begin to see renewed need for at least selective change if their country was to be competitively effective in the global community and in the global marketplace. And out of that perceived need they have tried instituting at least selective and limited reform again and again: all with a goal of selectively, controllably opening-up their system so as to become more effectively competitive and more economically stable and strong. Unfortunately it looks like they are currently entering into a new period of closing off and repression again as I write this, out of fear of the outside and of influence and practices that might challenge their one party hegemony, with this taking place under the rule of their still relatively new supreme leader, Xi Jinping. But when Vietnam’s leaders initially planned for their program of controlled change, the prospects for meaningful, sustainably positive change in China, as a path forward for that country looked promising too.
• Centrally planned, ideologically driven economies do not work. And that has led to all of these attempts to find workable alternatives to the rigidly unresponsive and ineffectual economies that communism on its own leads to. Communist ideologically shaped and driven administratively planned economies are and remain inefficient and are structurally uncompetitive in the context of any wider more open international marketplace. But change is essentially always viewed by many in communist party and governmental systems as being dangerous and threatening, even as it is seen to be essential for long-term survival by many in those systems too. This creates dynamics that are both fascinating and byzantine in their layered complexities.
• These dynamics and the ongoing compelling pressures of perceived need for change and modernization were why the Soviets made their reform attempt with perestroika, though they waited until their system was already so unstable and fragile, that any attempt at any significant change that could have in any way challenged their basic status quo would have been enough to bring them crashing down as a viable nation. That was still an unknown future in 1986 but it is known now and it has to be seen as a source of lessons to be learned from, now in Vietnam. The same can be said for lessons learnable from the recurring challenges that China has experienced from its own on-again, off-again approach to change and to economic reform. They advance when they open up and attempt more open reform and they fall back when they step away from that path.

A strictly communist economy did not work in Vietnam either, so their government made a very conscious decision to introduce market economy reform – but with a socialist face and foundation. And in doing so they have in fact created fundamental fracture lines in their overall system of governance that long-term will lead to an ending of communism in Vietnam as their government has sought to maintain – with that change already well underway and certainly for their emerging and rapidly growing entrepreneurial class, and for an emerging entrepreneurial generation. And unless their central government steps away from this in fear, and with a wave of repression, this change will simply be the norm and the expected for the current entrepreneurial generation’s children too. And that is at least one perspective on the context that Vietnam’s one party system and government faces as they seek to develop and manage a nation-wide program of wide-ranging infrastructure development.

As I have been discussing in the first three installments to this series, Vietnam’s budding entrepreneurs have sought to run with their nation’s support of change and towards a more overtly capitalist model, and in the north at least as much as in the south. And this brings me explicitly to the issues of infrastructure development and to the central planning that seeks to guide it – where that is still significantly shaped by Vietnam’s older centrally administratively planned economic model. I begin that phase of this overall discussion by at least briefly considering the types of infrastructure development that have been pursued, some of which I have already at least touched on in earlier series installments.

And I begin that by posing a question that Vietnam has had to ask of itself, and both in its business and industrial sectors and in its party and government offices. What critical infrastructure systems are most in need of repair and expansion, if the country is to be economically stronger, more stable and more competitive in the global marketplace, and if it is to be able to better defend itself from any outside threat?

If I were to focus on the three areas of national infrastructure that I have seen most actively under development there, I would cite these three:

• Transportation,
• Electrical power generation, and
• Telecommunications and internet access.

I am going to continue this discussion in a next series installment, citing this posting as background context for that. And I will discuss the role of foreign involvement in Vietnam’s very active infrastructure development initiatives there so I will also at least begin discussing the issues of the third bullet point of my above repeated topics list. Meanwhile, you can find this and related postings and series at the UN-GAID directory.

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