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department, which is struggling with the Internet and DHL; it controls fixed lines, but fixed lines are at least as outdated here as they are in the States.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.