Vietnam’s market economy leaves the poor behind

Bill Snyder, Chronicle Foreign Service

Monday, December 8, 2008

(12-08) 04:00 PST Ho Chi Minh City — At 16, Xuan Phuong left her home in central Vietnam to join the Viet Minh’s struggle against the French in 1946. She marched barefoot through the mountains, manufactured explosives and acted in propaganda plays for more than a decade before becoming a filmmaker covering the “American War” for North Vietnam.

Twenty years later, Doan Vinh left his wife and three children to join the National Liberation Front in the mountains near Da Nang to fight Americans. He too fought for a decade.

Both still live in what was once South Vietnam – Doan in Da Nang, Xuan Phuong in Ho Chi Minh City, the former Saigon – and both are proud of their past struggles. But the lives of these war veterans could hardly be more dissimilar.

Now retired, Doan, 71, lives in a cramped, stucco house with a leaky roof. Rent and medical insurance for his ill wife consume well over half the family income – a pension of about $120 a month. Meanwhile, Xuan owns an art gallery, a resort on an island in the South China Sea and a number of other business ventures.

Market-based economy

Their lives reflect the stresses of Vietnam’s turn to a market-based economy. As opportunities for a new entrepreneurial class continue to grow, the safety net for the poor is fraying. Farmers and townspeople have been displaced by hotels and factories built by foreign investors; organized labor – where it exists – is impotent; health care is spotty; and traffic and air pollution in major cities have reached critical mass.

“My life,” said Doan’s wife, Mai Thi Kim, “is full of misery.” Even so, Doan’s framed Communist Party membership certificate hangs in the family living room.

Like many veterans of the American War, as it is known in Vietnam, Doan is reluctant to speak about the fighting, saying only that “the past is the past, and it’s now over.”

If there’s lingering bitterness toward his former adversaries, it’s well hidden, and his delight at hosting a gaggle of visiting Americans appears genuine.

Indeed, the war seems far from the minds of most Vietnamese – more than half of the nation’s 86 million inhabitants were born after 1975.

Of more immediate concern is Doan’s struggle to make ends meet. Last year, the family’s former home was destroyed by the monsoon rains that regularly flood central Vietnam. The government’s response? “A few bags of rice,” he said. If he stops paying health insurance premiums that consume 20 percent of his income, he would be unable to pay for his wife’s treatment. Medical care was free in Vietnam until 1989.

Even though the nation has averaged an annual economic growth rate of almost 7 percent between 1997 and 2004, annual per capita income is just $2,600. In 2006, the World Bank estimated that 36 percent of Vietnam’s inhabitants live on just $2 a day.

The turn to the free market began gradually in 1986, when the Communist Party initiated economic reform.

“The feeling was that socialism had made us poor,” said Gang Wells-Dang, co-director of Action for the City, a nongovernmental organization dedicated to improving life in Hanoi.

Wells-Dang, who is married to an American, says that the economic reforms didn’t pick up steam until the end of the U.S. trade embargo in 1994. Between 2001 and 2007, exports to the United States increased 900 percent, according to CIA data.

To be sure, the end of stringent controls on foreign investment injected billions of dollars into the economy and the pockets of many Vietnamese. Between 2000 and 2005, the gross domestic product more than doubled to $53 billion. The relative abundance of cash – for middle and upper classes, at least – is evidenced by the huge popularity of cheap motor scooters and small motorcycles imported from China.

Traffic and pollution

Hanoi and Ho Chi Minh City are choked with scooter traffic that often overflows onto the crowded sidewalks. The air is so bad that many drivers, and even some pedestrians, wear surgical-style masks. It’s not uncommon to see two people squeezed onto the back of a scooter while the driver talks or sends text messages on another ubiquitous item – the cell phone. Scooters have largely replaced the bicycle, and chunky SUVs, while relatively rare, struggle to navigate the narrow, twisting streets of the capital’s old quarter.

Less obvious to a visitor is the complex of factories in a huge industrial park near Hanoi’s airport. Companies such as Sanyo, Canon, Daewoo and Panasonic formed joint ventures with the government and now employ thousands of people, including many refugees from the still-impoverished countryside.

Conditions in the factories are far from the socialist ideal. Many workers live in ugly shantytowns lining the airport road. Visitors are not permitted beyond the high fence that surrounds the industrial complex, but an underground video by independent filmmaker Tran Phuong Thao making the rounds in Hanoi tells their story.

One woman left the countryside at the behest of a recruiter. But on arriving in Hanoi, she found out the job was contingent on paying the recruiter a fee of $106, more than a month’s salary.

What’s more, the job only lasted a few months. Factories in the park tend to hire for relatively short stints and then force the workers to reapply for their positions, a tactic designed to weed out troublemakers. Those who lose their jobs have no unemployment benefits to fall back on, so the pressure to conform is enormous, says Wells.
Working class loses out

“We went from working-class heroes to cogs in the machine,” said an unidentified female worker in the film. She was later fired and now lives on the street, the filmmaker told a group of American visitors after a private screening in Hanoi.

It’s not surprising that a film critical of the system can only be shown privately, analysts say. The government has little tolerance for dissent by its citizens or reports by foreign reporters based in the country. Earlier this year, Ben Stocking, the chief of the Associated Press Hanoi bureau, was beaten by police while covering one of the capital’s rare demonstrations in which Catholics were demanding more religious freedoms. Tour guides who let their charges witness anti-government actions risk jail time.

When the war with the United States ended in 1975, Xuan Phuong spent time in Paris, where she managed to save a bit of money by working as a translator. She used her savings to buy Vietnamese art and eventually opened the Lotus Gallery in one of Ho Chi Minh City’s fancier neighborhoods. Later, she bought vacation homes on Con Son Island in the South China Sea and developed a small resort where prisoners of the South Vietnamese government once languished in infamous “tiger cages.”

Speaking out

Although her family connections and knowledge of French helped her build a comfortable life, Xuan’s status in the country has been somewhat precarious, she says. In part, her upper-class origins are a mark of suspicion, despite her past heroism.

Now 80, she has spoken out against the injustices of the government, some of which were outlined in her autobiography, “Ao Dai: My War, My Country, My Vietnam,” with the title referring to traditional garb worn by Vietnamese women. Originally written and published in France, the book has had limited distribution in Europe and the United States and has been labeled as “very harmful” by Hanoi. The government objected to her criticism of failed land-reform policies and the growing gap between rich and poor.

Like Doan, Phuong takes pride in Vietnam’s successful fight to become independent of the French and the Americans. But her pride is tinged with sadness over the increasing divide between rich and poor.

“After such a long life, it’s so sad to see so many things that have gone wrong,” she said.

E-mail Bill Snyder at foreign@sfchronicle.com.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/07/MNT61469VC.DTL

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