OPEN WINDOW POLICY:

Free the tiger: Vietnam has taken great economic strides in recent years, but political constraints still hold it back (Mark Tran, January 12, 2005, The Guardian)

Vietnam has made great strides since 1986, when the communist party launched its Doi Moi, or renovation policy in response to economic crisis and stagnation. Adopting the Chinese model of economic liberalism coupled with firm one-party rule, Vietnam achieved 8% annual GDP growth from 1990 to 1997 and around 7% from 2000 to 2003, making it the world's second-fastest growing economy. GDP growth is expected to be around 8% for 2004.

Vietnam's agricultural sector has performed particularly well. From a country where malnutrition was reported in the 1980s, Vietnam is now a leading exporter of rice, coffee and seafood. As a result of strong economic performance, the country has seen one of the sharpest declines in the poverty rate in the developing world.

According to the UN, Vietnam's poverty rate fell from 58% of the population in 1993 to 37% in 1998. Given this track record, the country is well on its way to meeting the UN millennium development goal of halving the proportion of the population living in extreme poverty.

For all its accomplishments, Vietnam - a country of 80 million - remains very poor. Income per capita is $483 (£258), compared with £13,000 in the UK. In Saigon, hundreds of people survive by diving without breathing equipment for scrap and trinkets at the bottom of the murky Saigon river. If they find enough to sell for around a dollar, it's considered a good day.

The example may be extreme, but it does indicate the scale of the challenge the country's leaders face. While people recognise the party's achievements in recent years, questions persist as to whether strict one-party rule is compatible with further economic progress.

"The leaders we have were good at fighting wars, but the qualities for war are not necessarily what you need afterwards," one former revolutionary, now in his 80s, said. "They are trying to build a house without windows. There is no air going in nor going out."

As in China, the combination of tight political control and economic liberalisation is a formula for corruption - a constant gripe among Vietnamese. Transparency International, the governance watchdog, recently rated Vietnam worse than China for graft. The country is also compared unfavourably with China in terms of its acceptance of market reforms.

Would have been helpful if the Vietnam generation--Bill Clinton, John Kerry, John McCain, etc.--hadn't been so eager to normalize relations. Liberty should have been a pre-condition.

Posted by Orrin Judd at January 12, 2005 10:49 AM