Pacific Perspective
Pacific Perspective
Good morning, Vietnam
My visit earlier this month to Hanoi and Danang suggests the title of the Robin Williams' 1987 comedy "Good Morning, Vietnam" aptly characterizes the economic situation in that country of nearly 80 million.
I went to Hanoi to attend an Asia Pacific Economic Cooperation (APEC) working group meeting (Vietnam joined APEC in 1998), and to review the University of Hawaii College of Business Administration's recently-launched Vietnam Executive MBA program, offered in collaboration with the Hanoi School of Business, part of Vietnam National University. Then I headed south to Danang to revisit a city where I spent a year in distinctly different circumstances as an Army officer in 1970-71.
For more than a decade after the reunification of the country in 1975, at the end of what the Vietnamese call the "American War," the leadership was preoccupied with internal and external security issues. Then in 1986, eight years after China began to liberalize its economy, the Vietnamese adopted the doi moi liberalization policy, something like the former Soviet Union's perestroika, but with a more economic twist.
Nothing much happened until 1989-90, when the fall of the Berlin Wall led Vietnam to get more serious about economic reform. In order to look good in the eyes of world opinion and hoping to attract foreign investment, Vietnam completed withdrawing its forces from Cambodia.
As Asia's miracle expansion gathered force in the 1990s, and relations with the United States moved toward normalization, investors devoted more attention to the labor cost advantages offered by Vietnam. But this enthusiasm cooled decidedly in the wake the Asian financial crisis of 1997, as Vietnam's leadership became hesitant to move quickly toward a more market-oriented economy.
Last December's signing of a bilateral trade agreement with the United States seems to have provided the necessary catalyst to get the government moving again along the path to economic reform. A constitutional amendment was recently adopted giving the private sector equal treatment with the state sector. In May 19 "balloting" the citizenry weighed in -- affirmatively of course -- on proposals to change Vietnam's legal system to make it more congruent with its responsibilities under the trade agreement.
Certainly the private sector is ready, and state-owned enterprises aren't far behind. I found Hanoi choked with motorbikes; five years ago I'm told bicycles held sway, but rising incomes and cheap Chinese imports have made motorbikes more affordable. Travelers returning from Ho Chi Minh City (formerly Saigon) in the south told me that the traffic there is so thick that each month's traffic deaths would fill a 747. Danang has seen the construction of more new buildings in the last five years than in the previous quarter century. FPT Software in Hanoi, located a stone's throw from Vietnam National University, is writing code for firms in Europe, California and Japan. Its senior engineers were educated in Moscow, but its junior staff is homegrown.
During my time in Hanoi, the new U.S. Ambassador to Vietnam, Raymond Burghardt, met with the executives in our MBA program, who hail from the United States, Japan and Korea, as well as Vietnam, and who work for such firms as Vietnam Airlines, Vietnam Auditing Co. (the affiliate of Deloitte Touche Tohmatsu), Electrolux Vietnam and the remarkably successful Buffalo Tours.
If their energetic and progressive conversation was any guide, and with apologies to the Beatles, I'd say "Good Morning, Vietnam" will turn into "Good Day, Sunshine."
David McClain is dean and First Hawaiian Bank Distinguished Professor of Leadership and Management at the University of Hawaii College of Business Administration.