ASIAN AFFAIRS INTERVIEW WITH LE KHA PHIEU General Secretary of the Vietnames Communist Party (VCP) THE BUREAUCRATIC NIGHTMARE Laurent Malvezin - Vietnam does not have a good reputation among foreign investors. They have the feeling that the bureaucracy is still mired into the cold-war mentality. What is your opinion? Le Kha Phieu.- Some people abroad do not understand the realities of our country. They think that our reform process, the doi moi, is a half-hearted attempt for renewal that will be somehow rolled-back. Such thinking does not match with the facts. Only if the reforms are going on can we expect to maintain peace and stability. We said it many times. But a reform is a step-by-step process. LM.- Yes, it is like walking, but the perception remains that Vietnam is dragging its feet rather than walking at a fast pace. LKp.- Look at the realities. Twenty five years ago, we were still at war. Our economy was based on subsidies and run by a bureaucracy. To turn around our economy in such a short-time is not an easy task. We need time. People must realize that for so many years, during the war, the country was organized around the war-effort and nothing else. When peace was achieved, half a million men left the army. They went back to their homes, without income. They had no job, they once again became farmers. At the same time, in the bureaucracy, hundreds of thousands of people involved in the war-effort became redundant. LM.- Hundred of thousands left at the risk of their life… LKp- During that transition, from a war economy to a market-economy, we did not have the means to feed our people. We were importing rice but it was not enough. It was only in 1986 that Vietnam started to turn around but it was only in 1995 that we really pulled out of a terrible crisis. LM.- Certainly, but some say it was a crisis of your own making, that with the proper policies, Vietnam would not have been in such dire straits… LKp.- The people saying that were not in Vietnam when we were totally isolated, when we had to face a total embargo. For a while, we had the support of the socialist countries, but when they collapsed, we were left on our own. Maybe the people have forgotten. To really understand the consequences, one can think of the situation of Iraq today and the social consequences of the current embargo. LM.- Today, Vietnam can feed its population and is an exporter of food products. That is a great step forward but could it also be a danger. One has the feeling that it brings an unhealthy sense of complacency. LKp- It is correct. We have a surplus where before we had a deficit. But we can’t find a market for our surplus and such a situation is fraught with danger. Our first aim was to be self-sufficient. It is achieved. Today, the major problem we face is our lack of industrial activities. Vietnam failed to develop an adequate industrial sector after the war. France, after World War II, managed to rebuilt its industrial capacity quickly. For Vietnam, primarily an agriculture country, the price of the war has been horrendous. LM.- France, as you say, a former colonial power in Vietnam, was able to rebuild quickly its industrial capacity after the war primarily through the private sector. Don’t you think that the problem in Vietnam is there? LKp.- I am aware that it is said that we do not pay enough attention to the private sector. It is just not true. There are 5,100 state enterprises and four times as many private enterprises. In the GDP of the country, the private sector accounts already for 60% of it. In the rural areas, there are more than 11,000 private farms doing extremely well and we bestow regularly some honorific decorations to their owners. More than seventy countries have invested in Vietnam and there are about 2,900 foreign joint-ventures, 500 being completely foreign owned. LM.- The numbers are well known but they seem not to be enough to reassure the private investors on the Communist party of Vietnam’s thinking. After all, private property was banned for many years. LKp.- The private sector is an integral part of the elements that give strength to the economy and therefore we have a high consideration for its role. As in other countries such as Japan, France and the United States, the private sector plays an important role in our country. LM.- An important role because it is the engine of growth, but nevertheless private capital is lacking. In 2000, foreign investment is at its lowest in a decade. Don’t you think it is the sign that there is a massive problem? LKp.- The decline of the foreign investments in Vietnam is only partially due to what you point out. I met a while ago some foreign investors in our export zones to listen to their problems, mostly land and tax issues. We solved all of them. The National Assembly even went to great length, amending the legislation on foreign investments. That is why I say that the lack of confidence in our commitment to the private sector is only one of the factors that resulted in the decline of FDI. Another one, and it is a fundamental one, is the red-tape foreign investors have to cope with. It is a legacy of our bureaucratic structure. I know of a project where a Japanese investor spent three years commuting between Vietnam and Japan without getting anywhere. The foreigners are fed up with that sort of treatment. Even the President of the FMI, Michel Camdessus, mentioned it to me the last time we met. That problem is linked to the corruption that is ingrained in the administrative network. It is not specific to Vietnam. Other countries suffer from it too. The bureaucracy is causing endless problems and we need to solve them. We consider the bureaucracy is suffering from a bad case of sickness and in need of a medicine. The amendments to the law on foreign investments should help address the concern of the foreign investors. LM.- China, so far the only successful economy in transition, suffered from the same problem a few years back. It forced Deng Xiao-ping, at the time in his late eighties to make a spectacular trip to the south in 1992, to reignite the reform process. 75% of the foreign investments in China came after his forceful declaration in favor of bold measures to get rich. Don’t you think that Vietnam needs the same kind of display of power-will against entrenched bureaucrats and entrenched party members? LKp.- For the 110th anniversary of President Ho Chi-Minh, we will again stress that we have yet to achieve a level of development commensurate with the possibilities of our country and such a situation is not acceptable. We didn't alleviate poverty as we thought we would. I always have in mind President Ho Chi-Minh. “Our main task is to eradicate poverty” he used to say. It is the responsibility of everyone in the country to fight against poverty. Any kind of policy or rules or attitude that is a hindrance to such aim or that slows down the process must be banned. And to achieve our goal, there is only one way: to further open up the economy to new foreign investments. LM.- The tenet of all this seems to be that only the private capitalists can deliver the means Vietnam needs to alleviate poverty. It seems to me it is very much a surrender to the capitalist ideology, yet Vietnam is not a capitalist country and you are the General-Secretary of a declared communist party. How do you reconcile the two? LKp.- Our political system as well as our economic one is that of a socialist country. In a country, you always have a convergence between the economic system and its political structure. Vietnam is no different in that respect and it is not going to change in the foreseeable future. We remain a country in transition towards socialism and the aim is to build a strong state and a prosperous and equitable society, all things we never had in the past. LM.- You say yourself that the country is in transition. It means it will change, and it is actually changing. At the same time, you say that the political structure always reflects the economic one. Isn’t it contradictory to say that such a structure will then not change in the foreseeable future? LKp.- Our political and economic systems have both evolved since 1975. At each stage of the transition, they too evolved. The State organizations and the administrative structures have been modified in the past; they keep changing to better serve the conditions we are in. Yet the very basic nature of the political system and the economic one that President Ho Chi Minh initiated does not change. Yes, the economy will improve, the structures will improve. The principles will remain. LM.- In the past, the principles were considered not compatible with a so-called market-oriented economy. What makes you think that today they can be made compatible? LKp.- One of the keys to our success is that we have always been able to take into account the needs and the requirements of our country. The most precious lesson we learned from the recent past is that the creativity of the individual is a precious asset. From the Chinese and the Soviet experiments, their successes or their failures, we also are able to draw up lessons. But you can't copy-cat what you learn. It never works as well as the original, no matter what, because the realities from country to country are always different. Their culture and their social structures are different. The weight of their history is different. What we learned is that you cannot reproduce the conditions existing elsewhere. If you try, you fail. But it does not mean that, for example, a planned economy is bound to fail. Many did not and the most successful ones in Asia have an economic master plan for the next ten, twenty years. It only means that you have to be right in the assessment of your own conditions and what they require to progress. This is why we constantly monitor our requirements and how we can cope with them. Every five years, the Party’s National Congress conducts a review of where we are and what we need. And that is why our policies and the reform process have been a success so far. Spring 2000 | |||
 | | | |