Vietnam pursues legal action against Catholics following protests

 http://www.catholicnewsagency.com/new.php?n=11629

.- The government of Vietnam is seeking legal action against the Archbishop of Hanoi following Catholic prayer vigils and protests seeking the return of church lands confiscated after the communist takeover.

The police newspaper Capital Security on Tuesday reported that the Vietnamese government is conducting legal investigations of Archbishop Joseph Ngô and several other clergymen.  The government accuses them of abusing their power to incite their followers to confront the government.  In these confrontations, the government alleges, state-owned property was destroyed and public officials were attacked.

Church leaders in Hanoi believe the investigations are an attempt to intimidate individuals, following the failure of the government to intimidate Catholics as a whole.

Thousands of Vietnamese Catholics have gathered at the gate of the former residence of the papal nuncio in Hanoi since December 18.   They have demanded the return of the property, which was confiscated in 1959 and is now planned to become a restaurant and nightclub.

The government’s allegations against the demonstrators result from an incident on January 25 in which protestors scuffled with police and threw away commercial billboards that were posted on the fence of the former nunciature, after police beat two of the protestors.

One cleric said the government was “trying to turn crime victims into criminals.”

Father Joseph Nguyen, a witness of the January 25 incident, called the government press coverage a “shameful distortion of the facts,” according to VietCatholic News.

Father Nguyen said that during the demonstration a Hmong woman had climbed over a gate to place flowers on a statue of the Virgin Mary inside the building.

Discovered by security personnel, the woman was chased around the garden of the building.  “Disregarding the woman’s explanations for her venturing into the building, the guards kicked and slapped her severely. In the witness of more than 2,000 Catholics, a security commander even loudly ordered his subordinates to beat to death the woman,” Father Nguyen said.

A man at the prayer vigil intervened, but he too was beaten.  Protestors then broke through the gate to rescue the two and scuffled with security personnel.

One prelate described the crowd’s motivation, saying, “the guards could not attack the woman brutally like that.”

Vietnam hikes rates to cool double-digit inflation

 http://www.forbes.com/markets/feeds/afx/2008/01/30/afx4590630.html

HANOI (Thomson Financial) – Vietnam’s central bank Wednesday said it would raise benchmark interest rates for the first time since December 2005, battling double-digit inflation which has sparked popular anger and labour unrest.

Aiming to cool bank lending, the State Bank of Vietnam will from February 1 raise the base rate used by commercial banks to calculate loans from 8.25 to 8.75 percent, said a statement on the bank’s website.

The State Bank of Vietnam will also raise the refinancing rate, at which the central bank lends to commercial banks, from 6.5 to 7.5 percent, and the discount rate from 4.5 to 6.0 percent, the statement said.

‘It’s a step in the right direction,’ the UN Development Programme’s chief economist in Vietnam, Jonathan Pincus, told Agence France-Presse.

‘Many economists have been saying we think the economy is overheating and that an interest rate move would be warranted to encourage savings and slow down the growth of credit, which many see as the main driver of inflation.’

The International Monetary Fund last year urged Vietnam to limit credit growth, and the government has set a goal of keeping annual inflation below gross domestic product growth, which hit nearly 8.5 percent in 2007.

Spiralling food and consumer prices — driven up by a cash influx amid Vietnam’s rapid economic growth — have hit the poor the hardest and fuelled a surge in labour strikes demanding higher wages.

In January, the second month of double-digit inflation, thousands of workers have gone on strike at scores of foreign owned plants, such as South Korean and Taiwanese textile and footwear factories around Ho Chi Minh City.

The state-run General Statistics Office estimated that consumer prices rose 14.1 percent in January from a year earlier, driven up mainly by food and construction material costs, ahead of next week’s Tet Lunar New Year.

Vietnam police launch probe against Catholic protesters

 http://afp.google.com/article/ALeqM5g3JfrKP7zcbmCSc9AwtfgI5zISCw

HANOI (AFP) — Police in communist Vietnam have launched an investigation into Catholic land dispute protests that swelled to about 2,000 people late last week, state media and a police officer said Tuesday.

Parishioners and priests have been holding daily vigils for over a month near Hanoi’s main St. Joseph’s Cathedral, demanding the return of a house and a block of church land seized by the communist government in the late 1950s.

Tuesday evening more than 100 faithful again defied authorities, praying and singing hymns on the disputed property, where they have erected a large white cross and placed candles and flowers on the building’s steps and walls.

They put up rain shelters and lit fires against the winter chill on the 1.1 hectare (2.7 acre) property, which the Hanoi People’s Committee has used as a community centre and for parking motorcycles.

After Friday’s rallies, when the protestors placed the cross on the site, police launched an investigation into the alleged crimes of property damage, causing social disorder and obstructing officials, the An Ninh Thu Do daily reported.

Lieutenant-Colonel Nguyen Manh Hung, from the capital’s central Hoan Kiem district investigative unit, signed a decision Saturday to launch the criminal investigation and sent it to prosecutors, said the police-run newspaper.

A police officer contacted at the investigative unit only told AFP: “I can confirm the signature on this decision but I do not want to exchange views or comments about this matter with you on the telephone.”

The state-controlled Hanoi Moi (New Hanoi) newspaper accused leaders of the Hanoi archdiocese of “abusing the belief and trust of followers to turn them into their instruments for their own goals.”

Vietnam’s government last week stressed that there is no private property in the communist nation, only land-use rights granted by the state.

“Every piece of land is in the possession of the entire nation, with the state being the representative of public ownership,” said Duong Ngoc Tan, head of the Catholics Department at the Committee for Religious Affairs.

Prime Minister Nguyen Tan Dung — who last year became Vietnam’s first communist leader to visit the Vatican — met Archbishop Joseph Ngo Quang Kiet during a prayer meeting in late December and pledged to consider the issue.

The party-linked Fatherland Front and the Hanoi People’s Committee have also more recently held talks with Kiet, state media reports have said.

Vietnam has Southeast Asia’s largest Catholic community after the Philippines — about six million out of a population of 86 million.

Vietnam jails 2 dissidents for disseminating propaganda against government

http://www.pr-inside.com/vietnam-jails-2-dissidents-for-disseminating-r410154.htm

HANOI, Vietnam (AP) – A court in southern Vietnam sentenced two dissidents to six years in prison each for passing out leaflets calling for the communist government to be overthrown, the judge said Tuesday.

Truong Quoc Huy, 28, and Hang Tan Phat, 24, were convicted of disseminating propaganda against the government at the one-day trial Tuesday, said presiding Judge Vu Phi Long.

The two men pleaded guilty of spreading more than 3,000 pamphlets in the southern hub of Ho Chi Minh City and two other southern provinces in 2005, calling for an end to the ruling Communist Party and overthrowing the government, he said.

The two were also ordered to serve three years of administrative probation, he said.
The ruling Communist Party does not tolerate any form of dissent

Vietnam: Archbishop protests at anti-Catholic media bias

http://www.indcatholicnews.com/vietmed325.html 

The Archbishop of Hanoi, Most Rev Joseph Ngô Quang Ki has protested over the way Vietnam’s state-controlled media has dealt with recent news about the Catholic Church there.

For weeks, while thousands of Catholic took part in peaceful prayer vigils in several towns, calling for the return of confiscated church property, the media was completely silent, he said. Then on Saturday, the media began to carry a series of negative reports of protestors who had placed a cross and a statue in the grounds of a former church property.

Archbishop Joseph said that the state-controlled radio, television and news papers reported that the archdiocese could not challenge the ownership of the building because “on 24 November 1961, Fr Nguyn Tùng Cng, the then Financial Administrator and Property Manager of the Archdiocese, donated the property to the government.”

The archbishop set the record straight by pointing out that if Fr Nguyn had given away the property, he would have had no legal authority to do so, but in fact, the Archbishop said, Fr Nguyn did not give the property away.

The archbishop’s statement, signed by Fr John Lê Trng Cung, chancellor of the archdiocese, also challenged state controlled media reports that Hanoi Catholics had destroyed state-owned properties, occupied state-owned land, gathered and prayed illegally in public areas, attacked and insulted officials, disturbed public order, erected illegally the cross in the garden of the site, and spread distortions about the government on the Internet.

He said: “The government does not have any evidence that the Church in Vietnam did donate it, nor a decree saying that it was confiscated. Hence, it is still a property of the archdiocese”, He argued that worshipping on a site belonging to the Church is one of right “protected by laws”. It cannot be interpreted as “gathering and praying illegally in public areas”. Also, “the cross and statues of the Virgin Mary were there originally. The faithful just moved them back to where they were”.

In response to accusation of spreading distortions about the government on the Internet, the archbishop said the Church in Hanoi was not responsible for the reports, but in fact most of these reports were completely accurate. He pointed out that the local state-controlled media also had a legal obligation to report the news truthfully and not distort it.

In conclusion, the prelate asked managers of the radio and the television of Hanoi, the New Hanoi newspaper, and the Capital Security newspaper to “investigate thoroughly following legal procedures” attacks on the Church by their reporters and publicly reply to Hanoi Catholics.

Hanoi police launch investigation into land dispute with church

http://www.pr-inside.com/hanoi-police-launch-investigation-into-r409822.htm

HANOI, Vietnam (AP) – Police in Hanoi have launched a criminal investigation into a land dispute with the Catholic Church, while state-run media on Tuesday accused church leaders of abusing their power to incite followers to confront the communist government.

Catholic parishioners and priests have been holding daily vigils for the past month at the site, a block away from St. Joseph’s Cathedral in downtown Hanoi. They are praying, singing and holding candles while demanding the handing over of the land, which was taken by the government nearly four decades ago.
Thousands of followers blocked the street Friday in the largest gathering, as many from outside Hanoi came for the celebrations for the 90th birthday of Cardinal Pham Dinh Tung. It was a rare scene in Vietnam, which typically does not tolerate any form of dissent.
The parishioners removed the iron gates to the 1-hectare property, which housed the Vatican embassy until 1954 when the communists defeated French colonialists. They also planted a giant cross at the building’s entrance and set up tents on the grounds.
Their actions have violated Vietnamese laws, the New Hanoi newspaper reported Tuesday.
Police in Hoan Kiem district, where the property is located, on Saturday decided to launch an investigation into the crimes of damaging property, causing social disorder and obstructing officials from doing their duties, it said.

District police were not available for comment Tuesday.

The paper accused Hanoi’s church leaders of instigating followers to confront authorities.
«What are they pursuing when they are ruthless (in pushing) Catholic followers to confront the government?» the newspaper asked, referring to the Hanoi church leaders.

«Abusing the belief and trust of followers to turn them into their instruments for their own goals, they have gone counter to God’s teachings,» it said.

Church leaders have said they only want the land returned and are not advocating that parishioners clash with the government. Instead, they maintain the followers are holding peaceful vigils.

Vietnam: government issues ultimatum to Catholic protesters

 http://www.indcatholicnews.com.nyud.net/vietnew325.html

Local government delivered an ultimatum to the Archbishop of Hanoi’s Office ordering that sit-in protesters must leave the ground of the old building of the apostolic delegation, and that the cross erected on Friday and all the statues must be removed. The dateline was set at 5pm last night local time. .

During the Friday clash with police, Hanoi Catholics took control the building for a while ­ long enough to put up a large cross in the garden. That cross “must be removed”, said the ultimatum.

On their first vigil at the site, just before Christmas, Hanoi Catholics wheeled a Pieta Virgin Mary statue from St Joseph’s Cathedral to the building where it had once been located before the communists illegally seized the building. That statue “must be removed” as well, said the ultimatum.

Despite cold rain, strong warnings and many other threatening gestures from security forces, Hanoi Catholics have been holding sit-in protests on the garden of the building since Friday. These people “must leave the ground of the building”, the ultimatum ordered.

During Saturday, The government sent some officials to the site to persuade demonstrators to leave but to no avail. Some army and security units were also deployed in the area.

In weekend Masses, the Catholic community was informed about the ultimatum, and urged to be united in prayer that God may bless, strengthen and guide them in the fight for justice. This indicates that Hanoi Catholics will defy the ultimatum and plan to continue protests.

Strikes spreading in Ho Chi Minh City

 http://news.monstersandcritics.com/business/news/article_1388205.php/Strikes_spreading_in_Ho_Chi_Minh_City

Hanoi – Thousands of workers at four factories in Ho Chi Minh City have gone on strike, Vietnamese press reported Thursday, joining 8,000 shoe factory workers who laid down their tools early this week, as inflation concerns sparked labor unrest in the country’s largest city.

The companies hit included Japanese-owned sewing machine manufacturer Juki, with 1,400 workers, and electronic parts manufacturer TTTI, with 1,000, according to the Vietnamese newspaper Ho Chi Minh City Law. The striking workers are demanding raises of up to 20 per cent.

On Monday, workers at the Chi Hung joint-venture footwear company struck for higher pay and better factory-provided lunches.

A trade union official at Chi Hung, Nguyen Thi Ngoc Ha, said Thursday that a few of the workers had returned to work, although the company had not agreed to raise their wages.

‘They probably returned because they were afraid they would lose their jobs,’ Ha said.

Salaries at the company average 845,000 Vietnamese dong per month, a bit over 52 dollars, said Phan Van Ha, an official at the provincial labor union. He said workers complain this is no longer enough to live on.

Inflation in Vietnam ran at over 10 per cent in 2007, and food prices are rising even faster, hitting low-income factory workers hard.

The Vietnam General Confederation of Labourers, the country’s state-run trade union, says there were 541 strikes nationwide last year, involving 350,000 workers. Most of the strikes occurred at foreign-invested enterprises.

Technically, all unions in Communist Vietnam must be affiliated with the national union. But in practice, because union officials are partly affiliated with the companies they work for, wildcat strikes called by spontaneously organized groups of workers are common.

The union then steps in to mediate between workers and management.

‘We have worked with the workers’ leaders and the officials of the company regarding the strike, but no solution has been worked out,’ said Ha, the union official at Chi Hung. ‘The company isn’t violating any regulation by refusing to raise the workers’ salary, but the workers are striking because their salary is not enough for their daily life. It’s a difficult situation, and we don’t know what to do next.’

Vietnamese suffer “sticker shock” as inflation rises

 http://www.reuters.com/article/inDepthNews/idUSSP16251620080128?sp=true

HO CHI MINH CITY (Reuters) – Every time Vietnamese factory worker Nguyen Thi Ha goes to the supermarket, she finds that prices on the shelves have climbed, evidence of a country facing its highest inflation rate in more than a decade.

Vietnamese are suffering from “sticker shock” as inflation hit 12.6 percent in December, driven by higher prices of food, fuel and construction material. The rise was the highest in a decade and well above the trend in other emerging markets in Asia.

“Prices go up all the time but wages only go up once a year,” Ha, 32, who earns less than $200 a month, remarked while standing at the meat counter of a supermarket where pork ribs were being sold for 70,000 dong ($4.35) per kg. They cost 50,000 dong ($3.10) per kg two months ago, an increase of 40 percent.

Rising prices are presenting a major challenge to a Communist Party government pushing headlong with the transition to a market economy, much like its giant northern neighbor China did.

Thousands of workers at textile factories owned by U.S., South Korean and Taiwanese companies have gone on strike in recent months in and around the largest urban area of Ho Chi Minh City, demanding higher wages to keep up with inflation.

The government’s regular increases in minimum wages have been wiped out by soaring consumer prices. Investors are opting for gold through purchases of gold bars and futures and some workers are asking for their salaries to be pegged against gold.

Economists said double-digit inflation is a cause for concern because it means the poor would eat less food in a country that has an annual per capita income of only $835 but prides itself on reducing poverty in the past decade.

WEALTH GAP

The government, committed to “market-oriented socialism with Vietnamese characteristics”, is sensitive about the growing gap between rich and poor.

By its own estimates, the most affluent 20 percent of the population is seven times better off than the poorest two percent.

“The problem for the government is to convince the poor that they are benefiting from the eight percent economic growth,” said Jonathan Pincus, senior economist at the United Nations Development Programme in Hanoi.

Pincus and others, notably the International Monetary Fund, have urged the State Bank of Vietnam, the central bank, to rein in credit growth. Bank lending surged 37 percent last year but the government has been reluctant to raise interest rates.

Government economists cite an infusion of U.S. dollars through overseas remittances and foreign investments as a big contributor to inflation, forcing the central bank to buy back dollars to contain the value of the dong.

“We need a good policy to withdraw the dong from circulation,” said Tran Du Lich, chief economist of the Institute for Economic Research of Ho Chi Minh City, a think-tank for the economy of the city that most still call by its old name Saigon.

“The government is well aware of the reasons for inflation and the way to solve it is to use multiple solutions, including monetary measures,” said Lich, who is a member of the one-party National Assembly, or parliament.

In one anti-inflationary measure, the central bank on January 16 ordered banks to keep their reserves at 11 percent of their dong and dollar deposits of up to 12 months, up from 10 percent.

Late last year, the central bank already tweaked its currency policy, allowing the dong to appreciate against the U.S. dollar.

CURRENCY APPRECIATION

A Singapore-based Asian economic analyst with Hong Kong and Shanghai Banking Corp said it expected a 1 percent appreciation of the dong to the dollar in 2008 and 2 percent in 2009.

“This would allow inflation to temper as our analysis suggests that a 1 percent appreciation of the dong versus the U.S. dollar should shave off above 1-1.5 percentage point from inflation over a 12-month period,” analyst Prakriti Sofat said.

Factory workers and the elderly, the people most affected by the steep rise in prices, would welcome some relief as their purchasing power for essential items has been severely reduced.

Many workers in the 14 industrial parks in and around Ho Chi Minh City earn only about 1.5 million dong ($93) a month.

Uuang My Dung, 50, runs a sidewalk restaurant in an area of the city where laborers rent rooms and toil in textile and shoe factories or as porters in Saigon Port.

Dung serves basic meals of rice, pork and vegetables. She charges 13,000 dong (80 U.S. cents), compared with 8,000 dong (50 cents) last year.

On her narrow street, faded store awnings are covered in dust and grime. Cars, motorbikes, bicycles and market handcarts compete for space, typical of the city where population estimates vary widely between 6 million and 11 million people.

On average, Dung says she ekes out about 160,000 dong ($10) a day, bearing the increasing cost of rice at the street market. It costs her 7,000 dong (44 U.S. cents) per kg compared with 5,000 dong (31 U.S. cents) per kg last year.

“People are trying to save money but it’s almost impossible to avoid paying more,” Dung said.

Vietnam’s Third Way poses party teaser

 http://www.atimes.com/atimes/Southeast_Asia/JA29Ae02.html

As Vietnam’s rapid economic expansion gathers pace, the country’s communist party leaders are having an increasingly difficult time maintaining their so-called “Third Way” model of economic development, where centrally planned strictures and market dynamics uncomfortably co-exist.

The question merging over the transitional economy is whether, more than 20 years after the launch of market-oriented doi moi reforms, a new generation of political leaders has the political will to bury the country’s communist past and fully embrace market economics.

How the party strikes the balance could in the coming years make or break Vietnam’s the reform experiment, claim some academics. Mancur Olson’s Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships makes the theoretical point that in transitional economies there are certain reforms that governments may pursue to better promote economic growth and that certain styles of government are better able to create and enforce those reforms more consistently.

Reforms that respect and secure individual rights, according to Olson, will provide strong incentives for individuals to produce, invest and engage in mutually advantageous trade, of which society will broadly gain more from so-called rights-intensive production, the theory argues. And as one might expect, rights-respecting and strong governments are most able to successfully implement such reforms.

In today’s Vietnam, Prime Minister Nguyen Tan Dung and his economic lieutenants must weigh whether such reforms are appropriate at this arguably still early point in the country’s economic development and, if yes, will his more market-minded administration allow the country to fully outgrow communism?

For economic development scholars who study Vietnam, the general answer is yes and an eventual yes. Several economists now argue that in today’s Vietnam, many of the reform pieces are in place, including evidence that the slow but steady government grant of more land rights has led to greater productivity and investment compared with areas that have not implemented the same reforms.

On the one hand, the current group of reform-minded Vietnamese leaders is committed to market liberalization because to date it has led to fast economic growth and helped to shore up the communist party’s overall popularity. Yet they continue to do so with an unequivocal determinism that their reforms do not challenge the party’s monopoly over state and society.

Indeed, any activities by groups that are not sanctioned by the state are subject to criminal prosecution, as activists who last year called for more democracy and are now languishing in prison can attest to. “When leaders here say they want a socialist market economy, they really mean it … no one with any influence is arguing that the state should surrender the economy’s commanding heights,” said Jonathan Pincus, a UN economist based in Vietnam.

Yet at the same time, the party remains strongly committed to socialism, or more accurately to Ho Chi Minh thought, still the underlying basis of its overarching authority and political legitimacy. That means Dung’s administration probably won’t anytime soon abandon communism or implement reforms that would pave the way for Vietnam’s full-blown conversion to a rights-based capitalism.

Instead, capitalism and its externalities will continue to be co-opted in order to “revolutionize” the prevailing socialist order, with the country gradually becoming more modernized, technocratic, wealthier, powerful, and, perhaps finally, democratic. Intellectually, the party has started to map out what this new socialist order may look like in practice.

According to party-affiliated scholar Phan Dinh Dieu, the one party state is not in contradiction with market reforms:

if we look upon the whole society as a unified system, then generally speaking the State does not only ‘dominate’ society, but also increasingly fulfills many service functions for society, as if to create a structure and a favorable environment for the activities of society’s members … In this sense, antagonistic relations between State and civil society will be replaced by relations of collaboration; the democratic State will be the State ‘of the people, by the people, and for the people’.

Party leaders are well aware of the challenges in pursuing its third way between capitalism and communism. Although this middle path is not fully bulletproof against internal and external challenges, party leaders seem to think that in time it can be. A recent example of the party’s new thinking was also presented in a recent op-ed by former prime minister Vo Van Kiet, who oversaw the implementation of many important economic reforms during his tenure.

In responding to a recent scandal over the widespread distribution of tainted soy sauce, Kiet reiterated the party’s belief in the importance of a functioning press to check and balance their reforms, so long as reporters remain aware of their constitutional function and responsibility to the party:

Our socialist-oriented market economy has not commercialized the press, which worries many people. But the market itself is bringing the press and readers closer. Our nation is led by the Communist Party alone, which requires the press to be an effective source of information … Newspaperpersons who consider themselves above the law are prone to corruption. Thus, the press’ activities and penalties for corrupt journalists [either in state-run or private newspapers] should conform to the law.

By co-opting and integrating elements of market liberalization and democratization, socialist institutions may eventually become, and in many ways already are, more efficient with greater responsiveness in which the party-state practices “a soft, diffused and highly qualified form of domination,” according to academic Chris Dixon of London Metropolitan University.

Reform blind spots
To be sure, Vietnam’s current economic growth has yet to be accompanied by an appreciable increase in economic freedom (ie government intervention in the economy, property rights, and rampant black market activities), political freedom (ie freedom of expression, freedom of association, and the right to organize political parties), or good governance (ie frequency of corruption in public and political sectors).

So far, the poor and disadvantaged have been willing to live with the economic, political and administrative deficiencies of the one-party state so long as the government delivers the basic economic conditions which allow for the creation of higher paying jobs, better public services, and a gradually improved standard of living.

The average Vietnamese household is in absolute terms now better off than before market liberalization measures were first introduced in the mid-1980s. The question going forward is not merely whether the party can deliver prosperity, but whether prosperity is equitable and perceived to be based on merit and not on communist party connectedness or government corruption. Simply put, the average Vietnamese citizen still evaluates the communist party based on its self-proclaimed constitutional credo that the communist party-state will function ‘of the people, by the people, and for the people’.

On the one hand, the economic marriage between communism and capitalism can probably be sustained over the medium term. Scheduled privatization of former state-owned enterprises (SOEs) should help to boost economic efficiency and growth. SOE managers and workers should have no immediate reason to oppose privatization, since the process as currently defined will allow them to continue to receive some form of government subsidies and a larger share of their productive surplus.

Party leaders will still hold on to strategic industries, such as telecommunications, banking and financial services, and education and training, for third-way sociopolitical reasons. Sustained state-control of crucial industries also serves as a sort of economic shock absorber. In case of a significant economic slowdown or financial crisis, party leaders can further privatize non-strategic enterprises, such as in the tourism industry, which are already driven by firms led by party loyalists.

On the other hand, the downside of sustained state-vested interests in the economy is that the country, while very capable of becoming a low- to middle-income country, will consistently lag the region’s more developed economies in terms of economic efficiency. The preferential treatment of SOEs by most accounts has led to an inefficient allocation of capital resources and drags on Vietnam’s still vastly untapped growth potential.

For example, the World Bank estimates that the amount of capital needed to create one job in a SOE is more than eight times higher compared with domestic private firms; the potential cost savings in transport and technical services could easily be more than 30% if the various privileges bestowed upon SOEs competing in the sector were eliminated, according to the same World Bank statistics.

To realize Vietnam’s true growth potential in job creation and economic productivity the communist party needs to level the competitive playing field between the state and private sectors. Unfortunately there is no official policy or the financial infrastructure in place to expand small private firms into larger, more globally minded companies.

The importance of this transformation is that, given the still relatively weak purchasing power of the average Vietnamese domestic consumer, higher incomes at this early phase of development will in the main come from export-oriented activities. Until these reforms take place, Vietnam will continue to be marked by inequality, expressed in recent political protests and labor strikes, which slowly but surely are from below eating away at the country’s socialist fabric.

Vietnam’s communist party leaders will find it increasingly difficult to reconcile their current marriage between communism and capitalism. As the population becomes more economically empowered, party cadres assertions that the party-state is equivalent to a democratic state of the people, by the people, and for the people will ring increasingly hollow. And any move back towards the socialist redistribution system to address emerging issues of inequality will just as likely be rejected by the very masses they would be designed to help but who are unwilling to revert to the party’s inefficient centrally planned old ways.

For Vietnam’s communist party leadership, this is the limitation and contradiction of their hoped for third way which if not resolved could in the end be its eventual undoing.