Vietnam

Associate Professor of Business Administration Fred Hoyt

Let me combine two thoughts for my last blog entry. One involves the new “Tet Offensive.” In 1968, the Viet Cong mounted the “Tet Offensive.” Set to coincide with the Lunar New Year (”Tet”), the 1968 version assaulted the major U.S. bases, including the U.S. embassy, which was occupied in the middle of Saigon. Amid U.S. claims that we were “winning the war,” the Tet offensive caused a rethinking of the support in the U.S. for continuing the war, and ultimately led to our stating, “We won,” going home, and in 1975 watching the North Vietnamese tanks breach the Presidential Palace (now known as the reunification palace).

Today’s “New Tet Offensive” is mounted by marketers on an increasingly wealthy population. 35% of the urban population is thought to be “middle class,” officially making the $350 a month that is classified as the entrance into the middle class level. The Tet holiday, about to start, is a 10-day (or two-week) celebration of the Lunar New Year. Children return home to spend time with family, the nucleus of a Confucian society. You may remember last year a massive snowstorm crippled China during Tet and left millions stranded. Gifting is important.

Here, where the poverty level is officially 13%, down from some 40% a decade earlier, people are preparing for Tet. The stores are decorated, as are homes. Most pronounced here are kumquat trees, with an orange/tangerine-sized fruit. The airlines have put on 30 extra flights, the trains have added, etc. One important (recent) addition is the return of the overseas Vietnamese. Once denounced as traitors, the Viet Kieh are now welcomed as part of the effort to modernize the country. In fact, quite recently the government allowed foreigners to own land (for 50 years) under specific conditions. The overseas Vietnamese have been important for a long time; I remember in 1995 when I was here, I learned that the Kieh Viet remittances were instrumental in supplementing income and allowing people to buy motorbikes which they could not do on their local salaries. The Overseas Vietnamese are numerous. Many fled the Communist regime during the war or after 1975 and settled in the United States. I learned last night there were 4,000 Vietnamese in Lincoln, Nebraska!

It’s really neat being here close to the Lunar New Year, and I realized I’ve never been in Asia this close to the New Year before. It has become a marketer’s paradise. As one of our speakers just described the consumer – materialism, conspicuous consumption, and individualism are rampant (We won? Can Wal-mart be far behind?)

As for Confucius, I read an interesting book several years ago, entitled, “Confucius lives next door.” The book described the persistence of Confucian thought in Japan. It’s true here, too. There’s one Confucian saying that I’d like to address in the rest of this blog: It is a pleasure to welcome guests from afar. That’s certainly true for my experiences in Vietnam, which students at IWU, who are Vietnamese, enhanced by welcoming me, either in person, or through their parents. They let me meet people who are locals, not viewed from the bus.

One of current students told me, “My parents want to meet you.” When I called the father, on Sunday, he told me to phone him when I was done with my tour and he’d come meet me. He picked me up and we went to Hoa Kiem Lake, the center of the old city, for tea. He’s a government official (assistant to the Prime Minister of Vietnam) with a master’s degree in economics from Williams College, a Ph.D. in econ from Hanoi National (where he’s taught) and a Fulbright Post Doc at Johns Hopkins in Washington. We wandered around the city, had dinner at a quiet Vietnamese restaurant (without foreigners!), and I told him I’d like to see the water puppet show, which I’d remembered as one of the great entertainments the two times I’ve been in Vietnam before. He bought two tickets but admitted he’d seen the show hundreds of times before and did not need to see it again. He did, however, bring me back to the hotel, where I found a faculty member who wanted to see it, then drove us, waited, and took us back.” You don’t need to do this,” I suggested, knowing that as his son’s teacher, I would merit the attention.

The following day, he invited me back to have dinner at his house with his family. He explained that his “family” (extended) had combined to “invest” in my student’s American education (as his father and uncle had gone to school in the U.S., their sons would have to do so or lose face). His daughter, he proudly told me, had placed second in the English competition for 5th graders in Hanoi. After dinner, she absented herself “because it is a school night and I have homework to do.”

Last night he asked if I would meet his mother, who lives with a younger brother along West Lake, not far from here. I did so, and met a young man who would like to go to the States to study (as father and uncle had). Interestingly, the uncle, being of the right generation, had studied in Prague, when Vietnam was an Iron Curtain country. Dad is arranging for a driver to get me to the airport, and had lunch with me this afternoon and left his brother to make sure I saw the two temples near here that were high on my list of things to do. The temples date from the 11th century and the founding of Hanoi. Teacher, and elder, and guest from afar – a powerful combination in a Confucian world, as the next example also illustrates.

Last night a December graduate of IWU from Hanoi who was home awaiting his departure for graduate school at the University of Nebraska picked me up on his motorcycle and asked, “What kind of food?” I said, “Vietnamese of course,” and off we sped, like locals, to a restaurant where he introduced me to his girlfriend (a student at UN – I see the picture perfectly); the three of us sampled a variety of the local cuisine, including some dishes I’d not had before (Vietnamese food is quite varied – lots of seafood and noodles; the primary noodle is called pho, pronounced roughly fuh – and quite good). On the way back, he offered a tour of the old city. Motorcycles zoom in and out where cars fear to tread (or are blocked), so it was quite an exciting ride. My colleagues were impressed that I’d been able to do it – and survive. We have a farewell banquet tonight, which I leave for departure to Narita in Tokyo, then to Dallas and then home. As always, I’m Hanoied at having to leave, but it will be good to get home and think about coming back to Asia in May.

Yi lu ping an, as we say in Chinese. A peaceful journey – and chuc mung nam moi. Happy New Year. And congratulations to my new and old Vietnamese friends on the New Tet offensive.

Associate Professor of Business Administration Fred Hoyt

We’re spending the last days in “school” meeting with professors and businessmen, and visiting businesses.

Here are some random thoughts on what I’ve seen:

Vietnam is developing, but not developed yet. The stock market for example lists 350 companies (and stock trading companies – there are 150 of them) and is open 8:30-11 five days a week. It used to be open only Monday/Wednesday/Friday.

We visited GM Daewoo, which is the second largest automobile company (after Honda). The plant can produce up to 10,000 cars a year (Mitsubishi manufactures 120,000 per shift), or rather assembles, since it doesn’t “manufacture” anything. It did have a 200% growth over 2007, but it shows that the automobile industry is not highly developed. That’s fortunate; neither is the infrastructure. I can’t imagine all the motorbikers converting to auto drivers. Hanoi, at least the old quarter has streets that are barely a horse cart wide. One might have to destroy the charm of the old city (charm based in part on its Vietnamese history and its French history – the French part is old boulevards, tree lined streets, and colonial mansions (some of them once occupied by the French now housing the comparable Vietnamese departments).

We also visited Deloitte, an accounting firm, which has a history dating (as does Daewoo) to the mid-1990s, when Vietnam “opened”. It’s opening was hastened by agreements with the U.S. ending the U.S. boycott, and more recently, by Vietnam’s admission to the WTO. Deloitte has offices in HCMC, Hanoi, and Haiphong, but has a cluster arrangement with SE Asia that taps into Thailand etc. The company has major multinational clients, but not many in the small and medium sector, which is very large, but small here is SMALL.

We were encouraged to be careful in our questioning, because Hanoi, as the political capital, has more State Owned Enterprises than does Saigon. Certainly, the transformation of the economy here has featured the privatization, or as they like to call it, equitization of the. In 1990, there were 12,000 SOEs, a number that has shrunk to 1,500 today. The remaining companies are bigger and more diversified – e.g., Vietnam airlines is into banking, but one of our speakers noted that the SOEs have gone from trying to become more efficient and competitive to raising more capital. We visited the Vietnamese Post and Telegraph department, which is struggling with the Internet and DHL; it controls fixed lines, but fixed lines are at least as outdated here as they are in the States.

Vietnam has moved beyond the “American War.” Over half the population has been born since the reunification of the country. The United States is also Vietnam’s biggest trading partner, and one of the largest investors in Vietnam. Not surprisingly, Taiwan is the number one investor, followed by Singapore, Japan, and Korea. One interpretation is that some of the non-U.S. investment is from U.S. subsidiaries, who are not prohibited by U.S. law from bribery. The country is around 70% rural, and is true elsewhere in Asia, there are great gaps between rural and urban centers. We’ve been in luxury hotels in urban areas (I am in awe of the retractable roof on the swimming pool here), but as I mentioned did get to a school that Cargill built because the area was too poor to build a school. While the income average is under $1,000, but $2,000 in Hanoi and $3,000 in HCMC, the average is kind of misleading – you know the joke about averages? If one hand is in boiling water and the other in freezing water, the “average is temperate.”

My sense is that this is sort of like China in that it’s a political one-party state, but the bargain here, as elsewhere, is that in exchange the party promises increasing economic growth. So far, that’s happened. However, nearly every business we’ve visited has pointed to the chaos caused by the integration of Vietnam into the world economy. The papers are full of the problems it’s causing here (the garbage pickers are suffering).

Well, one other thing that I wanted to mention, but it’s getting late, is the usefulness of having locals who really show you around. I had two here – the family of one of my current students and a former student who graduated in December but was home. I’ll save that for tomorrow, if I get a chance, before I leave at midnight.

Good night to me, and good morning to you.