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As it is on the 65th anniversary of the establishment of the Socialist Republic of Vietnam, it is the time to see where the country has come from.

The changes that have taken place since March, 1991, when I first arrived in Ho Chi Minh City, are breathtaking. Today’s dynamic economic hub, where we are familiar with snarled traffic and hustle and bustle, was then a quite town. Following decades of war, embargo, and the collapse of the Soviet Union, Saigon had no taxis or buses, only old Honda 50cc cubs and cyclos driven by demobilised and demoralised troops. I remember lepers begging outside the ice cream shop on Le Loi Street, since there was no money to keep them in the leper colony, and there were no street lights after dark. There were virtually no Westerners, and the few foreigners who came did not bring their children due to the lack of international schools and medical facilities.

But even then, there were signs of hope and change. I was invited to speak with a class of English students in June, 1991 - almost no one spoke English then - and I could instantly recognise the earnest enthusiasm and a keen desire for a better future. Some of the kids in that class are already leaders in enterprises in Vietnam and abroad, and they’ve joined others in contributing to one of the great social transformations of our era, lifting Vietnam out of poverty and reinvigorating the economy. What were once squalid squatter huts lining the city’s streams and major avenues, are now clean shop houses with thriving businesses and families living inside. The poverty alleviation, not just in the city but far into the highlands and the Delta, has been inspiring.

Major changes

Vietnam has done many things to lift itself up out of the poverty of the late 1980s, based on the two fundamental policies of “doi moi” and the global integration strategy. Among other things, it unleashed the tremendous energy, drive and initiative of its people by reforming the economy and allowing private sector businesses to grow and compete. It opened the door to foreign businesses, such as our own, to settle here and join Vietnam in its drive to integrate with the global economy and capture new export markets even as it imported capital and technology to rebuild itself.

In my field, law, Vietnam has built a new legal system for trade and investment by studying ideas from legal systems right around the world. It’s not always a smooth process, but one of the other things that has contributed to its success is the willingness to bring various viewpoints into a more and more open policy debate on fundamental issues such as the degree of marketisation of the economy, how to protect the rights of workers while letting market forces reward competitive enterprises, and how to make best use of national assets, including land and natural resources, in a mixed-market economic system. Vietnam has wisely followed a multilateralist foreign policy, keeping in mind the idiom: “A thousand friends are not enough; a single enemy is too many.”

Prudent macro-economic management has been an important element in the stable pace of economic development. Although there are times when businesses complain and ask for more improvements, the fact is that at certain key points in recent years, decisions by the government to reign in credit or tighten the prudential standards for credit institutions, for example, have proven prescient in retrospect as global financial upheavals washed up on Vietnam’s shores and would have wrought much more destruction than they did. Today, partly by design and perhaps partly by luck, Vietnam stands as one of the few healthy and growing economies in the world. The “luck” part is a combination of demographics (its young population, compared to Japan and even China), its culture of respect for education and hard work, and its natural resources. The “design” part is its social and political stability, its pragmatic economic policies, and its integration into global trade and investment frameworks such as the WTO, AFTA, and others.

Future nation-making

There are plenty of examples in Southeast Asia of countries with a bright future behind them. Burma was the world’s leading rice exporter in the 1940s. The Philippines was the region’s model of democracy in the 1950s. Indonesia’s high growth rates were sustained throughout the 1980s. But past accomplishments never guarantee future success. Unchecked, red tape, protectionism and corruption can creep in and suck the life out of any economy. Impractical economic and legal measures can rapidly destroy competitiveness in export markets.

Constant dialogue and vigilance is needed to avoid the temptations of short-term decisions. I remember in the run up to the conclusion of the Bilateral Trade Agreement (BTA) between Vietnam and the US in 2001 that many smaller local enterprises worried that “they were like little boats about to be set adrift on the big ocean.” Well, with nearly $15 billion in exports to the US expected this year, those concerns have been proven unfounded. Indeed, what Vietnam has shown is that its enterprises, given the chance, can sail the toughest international waters and that the country can, if it keeps going, become a truly global player.

For foreigners like me who have lived in Vietnam for many years, the things that drew us here and kept us here were the friendly welcome we’ve had from the Vietnamese people and government, who’ve made us part of their communities and allowed us to contribute constructively to society. I’ve now lived in Ho Chi Minh City longer than I’ve lived anywhere, including San Francisco, where I grew up. My wife is from Ho Chi Minh City and both of our wonderful children were born here, so it is truly our beloved home. Like other Saigonese, we worry about the city’s social problems, its infrastructure challenges, environmental degradation and the loss of so much of the city’s architectural heritage in the face of modernisation. But overall, there is no place else in the world I’d rather live and I’m grateful that I’ve been allowed to find happiness in work and in life here.

The next five years present a series of challenges for Vietnam. With the global economy still weak following the serious financial crisis last year, enhancing competitiveness and avoiding complacency have never been more important. Short term measures like price controls and protection of isolated local businesses can derail overall competitiveness, growth and investment before you even realise what’s happening. Urban planning and infrastructure development, while protecting some of the heritage that is the country’s cultural and historical soul and its attraction for tourists, is also a challenge. Creating jobs for over 1 million young people coming into the workforce means attracting more and better quality foreign investment in manufacturing and services, especially tourism, and requires improving the educational system, both at the vocational training level and at the level of higher education, to reflect the needs of the economy.

Fighting red tape by pushing Project 30 over the finish line and showing some concrete results for the last two and a half years of hard work is also a key objective. It is hoped that once the Party Congress is over in January the leaders will feel more self confident in pushing forward the reforms needed to reduce waste in the state-owned sector, make public administration more efficient and take advantage of the manufacturing investment that is starting to look beyond China for a more competitive base.

The agenda is clear and the determination of the government seems strong, so I am confident that these challenges will be confronted successfully and five years from today the Vietnamese people will be that much better off than they are today. 

“Like so many other families with ties to Vietnam and a second country, we are part of the personal manifestation of global integration. My wife has brought me into her Vietnamese family and given me Vietnamese roots, a sense of belonging here that I would not have had otherwise. At the same time, I continue to keep ties to the US by participating in the San Francisco-Saigon Sister City Committee activities (as does my father in San Francisco), the American Chamber of Commerce, and other foreign and international business chambers such as the Hong Kong Business Association and the Vietnam Business Forum. Where I grew up, we took this kind of international integration for granted (when I left San Francisco it was home to more Asian-Americans than European-Americans), and of course in these days of multi-racial families such distinctions are gradually eroding. So it seems natural to see Ho Chi Minh City, which is also an international trading city, gradually move in the same direction. It may sound trite, but I do believe that these people-to-people connections can play an important role in ensuring peaceful and mutually beneficial relations among nations.”

FRED BURKE, MANAGING LAWYER, BAKER&MCKENZIE LAW FIRM