Reflections on Vietnam’s 35 years of reform

In the past week, Vietnam’s 13th Communist Party Congress has been taking place. It is also 35 years ago since the country’s reform era (officially termed “renovation” or Đổi mới) was launched during the 6th Communist Party Congress. A former editor-in-chief of Communist Review, the party’s flagship journal, said that this congress should be viewed as the beginning of a “second” new reform era.

Naturally, I have lately been outpouring thoughts and reflections with myself about Vietnam’s likely reform trajectory ahead. Admittedly, I have honestly not kept up with Vietnamese politics since almost half a decade ago, when I graduated with a thesis written on environmental governance in Vietnam during the years 2006-16 when regulations on environmental protection and civic participation on such matters were mostly on paper. Nevertheless, I’ve attempted to catch up in recent days by reading congress drafts and opinion pieces.

Regardless of levels of “hollowness” in policy slogans and ambitions, it seems this time that there is a greater and more genuine attention to the question of ecology, especially with a more explicitly stated desire to become more selective on attracting FDI flows in terms of their degree of environmental hazardousness and low, dirty technology. There seems to also be a subtle change in policy paradigm when it comes to economic growth in terms of more humility: while this rate must be maintained at an average of 7% annually to meet the 2025-45 higher-income status targets, this can no longer be achieved at an ‘at-all-cost approach’ by sacrificing ecology, culture and other non-economic aspects in the process. Hence, the “10 relations to be more specified and solved” laid down in a drafted political report to the congress, including on how to balance economic growth with environmental protection, is a progressive point of reference for action in the next five years. China, at a much higher income stage, only removed ‘hard growth targets at all cost’ approach only since last year. In that context, I am satisfied that there is a growing consensus that the twin-deficits of both low labour wages and productivity growth are no longer sustainable underpins of a development model. The workforce is both aging and shrinking. There is still time and scope to avoid the scale of social illnesses (cancer villages, water pollution, leftover rural children, manufacturing factory suicides) that erupted in China in the 2000s from such a similar model. Can we leapfrog from that?

But the question of civic participation in environmental protection and the mechanisms for enabling such legal right (an addition to the 2013 Constitution) remain as ambiguous and top-down as ever. This time around, there seems to be a lot of promulgations about making governance more “people-oriented” by lessening the distinction between the government as the rule maker and citizens as obedient receivers. On the other hand, there seems to be a far more overwhelming discussion on how to incentivize bureaucrats to improve their performance in implementation and supervision, especially on building a “reward and protect” system for bureaucrats who are “daring” in the form of the “6 Ds“: dare to think, dare to act, dare to take responsibility, dare to speak, dare to innovate and breakthrough, and dare to face difficulties and challenges. Vietnam’s bureaucratic system and culture today are infamous for smashing individuals who are objectively talented and well-performing, and this is one reason why party-state building has been such a key focus of this congress.

But what about the protection of “daring” citizens who want to denounce incidents of environmental degradation without fear of punishment? Honestly, if such policy energy could be similarly dedicated to inviting ways to encourage and protect civic participation, not only would “bureaucratic overload” be possibly lessened but even improve bureaucratic performance while at the same time allow for citizens to bear greater implementing responsibilities together with the state. Why place all the pressure on the bureaucrats? The Covid-19 pandemic has proven that a resource-constrained state sector can still perform well in combatting illnesses (physical and social) by trusting and letting citizens play a greater role in implementation and supervision. This is especially true for the under-funded and overall constrained government bodies tasked with environmental affairs. This is the type of social, targeted democratization that should be on-demand and experimented. The morality politics (or whatever is motivated behind the campaigns of political purification, including anti-corruption) that has been going on for the past 5-6 years based on leadership or individual personality is not sustainable and must be secured by further institutional building, preferably one that is more bottom-up, citizen-oriented as to expand the popular base to defend the achievements already made till now.

I would like to refer back to the “10 relations” that the party-state aims to solve and formulate into specific policies in the next five years and beyond:

  1. Between renovation (reform), stability and development
  2. Between economic and political reform
  3. Between obeying the laws of the market and ensuring a socialist orientation
  4. Between the development of the forces of production and construction and step-by-step improvement of socialist production relations
  5. Between the state, market and society
  6. Between economic growth and cultural development, realization of social progress and equity, and environmental protection
  7. Between building and defending the Vietnamese socialist fatherland
  8. Between independence, autonomy and international integration
  9. Between the leading party, the managing state, and the people as the owner
  10. Between the practice of democracy and strengthening legislation, ensuring social discipline

While the 1-9 points are not new from past congresses (but still more fresh in the sense that these relations ought to be more substantiated and translated into policy), the last point is a new addition. The causal order of the formulation behind this point isn’t exactly wrong: democratization needs legal adjustments in order to ensure that it doesn’t get out of control. But I am not too hopeful that those legal adjustments aim for more legal protection for citizens specifically, but rather for greater legal protection of the state to maneuver more “creatively” with the constitution in their hands. “Abusing freedom of speech” or “obstructing officials from conducting public duties” are examples of legal languages that make it difficult for citizens to know where to draw a line. Many citizens, especially farmers or the urban poor, cannot afford to go through lengthy rounds with the complaint system, one of the very institutional faces of bureaucratic inertia in the country today. Especially as the “digital economy” and “building digital infrastructures” have been on such a high agenda throughout this congress, the prospect of a potentially lacking citizen-oriented legalization of society is worrisome.

The question of land also remains open. In one hand, party journals continue to publish polemics against land privatization (in the form of establishing property rights of land) and critics of the “socialist orientation” of the country’s evolving market economy. On the other hand, the “conservative-liberal” distinction in media is quite overblown, in the sense that drafts of congress documents suggest deeper marketization of goods and services, including land. Not to mention that several large-scale free trade agreements (EUFTA and RCEP) have been signed under an ostensibly conservative leadership. While state ownership of land remains adhered by law, land privatization in the form of embezzlement of public property with losses in the millions of US dollars remains a constant headache and enduring threat to state finances and credibility.

In spite of more humility this time around, the congress drafts also continue to emphasize the tasks of “completing institutional adjustments to qualify as a market economy (with socialist orientation)” and “deepening international economic integration”. In my view, the first point is more understandable than the second point. Deepening international economic integration? The export-to-GDP ratio of Vietnam is already one of the highest in the world, the latest at over 200%. It is already one of the most open economies in the developing world with lucrative low-to-zero tax schemes and sub-standard labour and environmental regulations for foreign enterprises. Yet, Vietnam’s export miracle has largely been driven by the FDI sector, while its domestic counterparts (both state and private enterprises) have fallen behind in terms of industrial capacity and productivity growth: in 2019, FDI accounted for 70% of Vietnam’s export revenues, 50% of industrial output, and yet 20% of national GDP. Such an over-reliance on FDI and inadequate attention to domestic capacity upgrading contributed partly to the country’s failure to achieve an industrialized country status by 2020, a target laid down during the 10th Communist Party Congress in 2006. Are the domestic enterprises prepared for this new wave of trade liberalization? Many domestic enterprises already complain about the growing number of trade deals signed without being able to truly understand what they exactly have to offer. Most crucially, the structure of Vietnam’s economy is still such that it is dominated by household enterprises (roughly 30% of national GDP) that mostly remain incapable of engaging in exports. Amid the congress, I spoke to a former colleague in Hanoi, who now works in the science and technology sector tasked with attracting investments. As we both expressed concerns for the future with regards to domestic capacity upgrading, this person said: “on this task, I am not sure if the state can be relied on anymore“.

The current leadership may be conservative in terms of domestic power structure and institutions, but not necessarily in terms of policies. Given the traditionally more conservative leaning of the current general party secretary, the economic policies that have been implemented under his watch in fact show that he has been far more “pragmatic” than what the media in particular would like to recognize. The media also do not realize that, as many in the public often compare the current generation of leaders with the first generation whenever they complain about corruption, some of the “very communist traits” of the current general secretary (e.g. austere lifestyle and family) are what in fact make him appealing to many ordinary people, as the “last communist”. Anyhow, in spite of a dose of overall optimism, my concern still remains that Vietnam’s Covid-19 containment success makes it believe that it can largely continue with old recipes for spurring growth and development.

Lastly, I am very worried for the Mekong Delta region. This region has made me more conscious about the importance of rural development amid an orchestra of calls for more urbanization without an end of “urban problems” in sight. It is the region that I care the most about, and the only region where I have visited to nearly all its provinces. It is the heart of the country in terms of food security and nutritious well-being. Nowadays, it is faced with falling population growth, emigration, climate change (especially seawater intrusion and soil erosion), and weak economic development. Despite being the most fertile region with untold productive potential of the country, it remains among the poorest, both economically and politically more than ever. Far too few transport connectivity projects get allocated to this region. While the south-east and Mekong Delta regions contribute to 42% of GDP nationally, public infrastructure investment into Ho Chi Minh City and Mekong Delta region specifically only account for 20-25% nationally. A recent op-ed by a university lecturer based in this region, which depicted the hardships faced by Mekong Delta compatriots whenever they return home for the Lunar New Year holidays by road, made me sad. I don’t know how long the pleas of this region will continue to be ignored at the central level: for how long?

Photo: Tien Giang province, Mekong Delta region

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