Entries with label state capitalism .

Rice terraces in Vietnam [Pixabay].

▲ Rice field terraces in Vietnam [Pixabay].

COMMENT / Eduardo Arbizu

The combination of a market Economics and an authoritarian regime dominated by the Communist Party of Vietnam (VCP) has led Vietnam, a country of over 90 million people, to become a key player in the future of Southeast Asia.

Today's Vietnam is the consequence of a confusing and contradictory process of change that has transformed not only the country's Economics but has also had a profound impact on social life, urban configuration, environment, domestic and foreign policies and whose final effects will be seen in the long term deadline.

An impressive economic turnaround

The transformation of the economic model in Vietnam derives formally from the decision taken at the VCP's sixth congress in December 1986 to open the country to the market Economics , but its roots lie earlier, in the economic crisis that followed the war, in the collapse of agricultural production that the radical implementation of a communist model brought about in 1979. This debacle forced the private trading of any surplus production that exceeded the targets set by the state for public land or enterprises. This kind of state capitalism paved the way for the liberalisation that followed the death of Stalinist leader Le Duan in 1986. The approval of the do-moi or renovation policy meant the withdrawal of planning and the choice for the free market. It was not an ideological decision but an instrumental one. work If the CP wanted to maintain control of the country it needed to generate one million jobs a year, guarantee food for 90 million people and reduce poverty.

It has been an economic and social success: per capita income has increased dramatically and the population below the poverty line has been reduced from 60% to 20%. The US embargo ended in 1993 and in 1997 the two countries signed a new agreement trade agreement. In 2007 Vietnam was admitted to the WTO. In this context of openness, more than 150,000 new businesses were set up under the new enterprise law and major international companies such as Clarks, Canon, Samsung and Intel set up production facilities in Vietnam.

The achievements of the process, however, should not hide its weaknesses: a state-controlled Economics through joint ventures and state-owned enterprises, a fragile rule of law, massive corruption, a web of families loyal to the VCP accumulating wealth and owning most private businesses, growing inequality and deep ecological degradation.

Agriculture has evolved from the sudden drop in production that followed communist collectivisation to the current status where Vietnam is the second largest exporter of rice in the world, a crop that accounts for 20% of its exports. The industrialisation of Economics has meant that agriculture, which used to account for 40% of GDP, is now only 20%. Livelihoods still depend on rice cultivation, still the main source of income for rural households, where half of the population lives. source . Rice exports are managed by a combination of free market and corrupt officialdom, with the negative consequences experienced in the speculative crisis of 2008. There has been an intense migration from the countryside to the big cities where wages are five times higher. The pressure for wealth is converting agricultural land into residential or industrial plots. Every year 10,000 new hectares are re-zoned. The transformation of the rural world is pushing away the old Structures that provided security, meaning and purpose and it remains to be seen how it affects future stability.

Social and environmental change

The construction of proletarian towns after the war, under the communist housing programme, has not prevented overcrowding and the continuation of communal life. Migrants continue to arrive in search of work, money and protection. Tons of industrial waste remains untreated; the rivers around Ho Chi Min City are biologically dead and pollution in Hanoi is well above internationally accepted levels. Problems such as prostitution, with more than 1% of women working in the illicit sex trade, or abandoned children on the streets are a reality. However, while doubling or tripling its urban population, Vietnam has managed these problems better than neighbouring countries, largely avoiding the ghost cities and their problems of crime, extreme poverty and drug addiction so common in the rest of Asia.

Commercial and urban dynamism is reflected in thousands of illegal street food shops and small businesses, pioneers of small-scale capitalism, which are now a tourist symbol of Vietnam. In cities full of young people who identify freedom with a polluting motorbike, youth rebels against years of communist austerity but not against family traditions.

Vietnam is a country where a natural wonder like Ha Long Bay, one of the country's iconic images, is simultaneously a tourist attraction and an environmental disaster. It is also one of the areas most exposed to the effects of climate change, due to its low altitude and reliance on agricultural production in the Mekong Delta and tourism. Respect for wildlife and the environment are issues of high priority for the authorities leave .

The VCP remains in control

There are issues that have not changed with the same intensity. Vietnam still lives under a "natural system of control", the deep surveillance system put in place by the communist regime to control the values and behaviour of its people. A system in which one in six Vietnamese ended up working in the security forces and which resulted in the control of "cultivated families", those who behave in accordance with the values set by the party. agreement . Although it has proven its effectiveness in crises such as avian flu and now partly in the Covid-19 crisis, the system is now controversial due to the spread of the internet and social networks and radical social changes that call for more freedom. Despite this control, corruption is widespread and damaging to the country's future.

The VCP is still in power. Retaining its Leninist roots, it is now an elitist and intelligent organisation in search of its own survival. A new mandarinate that has evolved from a centralised power present in all aspects of public and social life to a fragile and partial control; from a "petty legal system", where decisions were taken directly by the VCP and their compliance with the law was irrelevant, to a "State based on Law", where rules are the tool to supervise entrepreneurs and investors, allowing them to create wealth and employment but simultaneously comply with the VCP's expectations. Similarly, the party controls the legislature, the courts and indirectly the press, media and news coverage, which prevents Vietnam from being considered a truly free country.

Life has been difficult and lonely for those few who tried to oppose the regime and promote real democracy. The name of the Catholic priest Father Ly and his followers, brutally repressed, tried and convicted in March 2007, once the country was admitted to the WTO, casts a shadow over the hope for a transition to effective political freedom.

Foreign policy and the future

Vietnam's foreign policy seeks to strike a balance in its relations with two main actors: the US and China, counterbalanced by a set of alliances with third countries. Overcoming war wounds and establishing trusting cooperation on subject security is the goal of the policy of rapprochement with the US, which is already a significant investor in the country. The special relationship with China, the largest importer of Vietnamese goods, an industrial giant and Asia's largest military, is the other axis of its policy despite long-standing territorial disputes.

The overexploited environment, inequality, elite entrenchment and, above all, uncertainty about the evolution of the Communist Party of Vietnam and the political system are aspects that are weighing on the outlook. However, a young and well-educated population, as well as the inflow of foreign investment, are reasons for optimism about further liberalisation of the country, including political liberalisation.

Categories Global Affairs: Asia World order, diplomacy and governance Comments