The Horse Cart and the Bullet Train

In the first essay featured on this page by a contributing author, Hanoi-based analyst Nguyen Quang Dy assesses the status of reform politics in Vietnam. Comments are welcome. As always, the views expressed on this page do not necessarily reflect my own views. JL. 


Nguyen Quang Dy

“Traditional education always teaches learners about a world that no longer exists…Thirty years from now, the big university campuses will be relics”

Peter Drucker, 1997

Changing the operating system

The bold prediction by Peter Drucker twenty years ago might turn out to be true. The Internet and Internet of Things, together with new achievements in biochemistry and quantum physics, like the bullet train (generation 3.0), is changing the shape of the world.

But Vietnam’s political management system still follows operating system 1.0. Indeed, the Vietnamese are still debating the pros and cons of the “Second Reform” (system 2.0).

Traditional and unconventional thinking are like the Moon and the Sun, and their interface is like the solar or lunar eclipse when the blue Moon can be “eaten by the Bear”. Those who live for too long in the cave would shun the Sun. To free human beings from the cave of ignorance (as Plato said) is a difficult and dangerous process. To integrate with the world, they would have to come out of the cave, but their mindset could still be there.

Let’s take one simple example. Vietnam sent agents to Berlin to abduct Trịnh Xuân Thanh, making Germany indignant over this blatant violation of sovereignty and international law (only seen in cold war action movies) While the Germans behave in the post-cold war era (operating system 2.0), the Vietnamese still behave as during the cold war (operating system 1.0). Vietnam wants to abduct Trinh Xuan Thanh and EVFTA as well?

Given this context, the APEC Summit held in Da Năng in November 2017 faces many challenges and gaps. Vietnam continues to fight “peaceful evolution” and violate international law while it wants to welcome President Trump and US aircraft carrier?

If the Vietnamese do not change their mindset and operating system, how could they integrate with the world and “make friends with all”?

Reasons for falling behind

In the old days, American cowboys in the “Wild West” would be on horseback, chasing the steam engine trains (generation 1.0) at comparative speed. Now, if state managers think they can also use traditional horse carts to chase the bullet trains (generation 3.0) for control, it is ridiculous. If they demand the bullet trains to slow down like the Internet to behave “nicely as expected”, it is absurd. If they want to intercept the bullet trains at local stations for fines, it is an illusion as the bullet trains no longer stop at these stations.

Since the “First Reform” (1.0), Vietnam has started to have market economy, but with “socialist orientation” and gradualism, therefore it is not yet true market economy, but a crippled and distorted market economy. It is a marriage of convenience between primitive capitalism (like wild predators eating each other) and crony socialism (like crocodiles without tears) thus giving birth to “red capitalist” monsters (like Frankenstein), as crony interest groups dressed up in socialist clothes but with a primitive capitalist heart inside.

Japanese Prof Kenichi Ohno (from GRIPS Institute) once said that when he returned to Vietnam after five years, he found his Vietnamese friends still passionately debating the same issues as they did five years ago. If Kenichi Ohno returned to Vietnam 10 years later, he might find the same thing again. If Vietnam fails to change its institutional system and mindset (operating system 1.0), the economy would keep running around with its own economic model of “refusing to change” (as remarked by economist Pham Chi Lan). To escape this vicious circle the present government, which bills itself as a “constructive” government, should provide a breakthrough with comprehensive reforms.

Lessons of the gaps

More than twenty years ago, the Vietnam Program at Harvard KSG conducted research and development of a book edited by Prof David Dapice (On the Dragon’s Trail, David Dapice, 1994), presenting an economic reform agenda for Vietnam.

But when the book was published (after a few years) the situation in Vietnam changed considerably, making some discussion in the book irrelevant. To fill this gap, the Vietnam Program conducted another research project to produce a shorter document on reform (Choosing Success: The lessons of East and Southeast Asia and Vietnam’s Future, Harvard University Press, 2008).

Another example is the report “Vietnam 2035: Toward Prosperity, Criativity, Equity, and Democracy, MPI & World Bank, February 2016). It is an important report recommending a comprehensive reform agenda for Vietnam, with extensive research and development efforts, taking a few years to complete. But by the time the report was published, the reality in Vietnam has changed a great deal. Therefore, without necessary update research, some parts of this important report might be irrelevant to new developments.

No matter how good these reports are, if the state and corporate managers fail to change their mindset and institutional system in response to growing demands of life now changing with puzzling speed, it is like the story of the horse cart chasing the bullet train in vain. The gaps of thinking and operating system and the speed of change may turn the research and management systems into outdated and useless “relics” (Peter Drucker).

A different world

Brexitism in the UK and Trumpism in the US have turned the world upside down, reflecting the demise of globalization and the rise of isolationism, nationalism and populism. The election of Donald Trump was the failure of the mainstream political elite and research community which failed to predict due changes. The power system of the Republican and Democratic Party failed to grasp new developments and respond to angry voters.

In market economy, competition is the rule of development and elimination game. There is an interesting fable. Two hunters who went to the forest, were chased by a big bear, running for their life. After a long while, the first hunter was so tired that he said, “I cannot run faster than the bear”. The second hunter said, “I don’t have to run faster than the bear. I just need to run faster than you”.

In competition, if you are not fast and strong enough, you may get killed by others. Some 200.000 companies (about 30% of the total) bankrupted as “clinical deaths”, perhaps for failing to understand market forces. Many companies survived by state’s bailouts, while only some survived by themselves. But, if they continue to rely on the state without inner strength, they may get killed again by international competition.

While life is changing so fast, the research and management mindset and paradigm change so slowly. As the government starts talking about technological revolution 4.0 (though not really understanding it) some firms in Vietnam already start using robots in place of human workers. If corporate and trade union officials still stick to operating system 1.0, how can they deal with a new generation of workers of artificial intelligence (4.0)?

Paradox and tragedy

Given a closer look, people might realize a sad fact of life that most Vietnamese would harbor extremism as a chronic disease. Extreme communists and anti-communists are very much alike, though they are enemies. As extremists, they would not listen to others for understanding or acceptance of different points of view (inclusive), but they try to reassert themselves and reject others (exclusive). As extremists, they are prejudiced and conservative, leading to confusion and wrong assumptions. This is a dangerous paradox and tragedy.

For many reasons, moderates (and moderate views) are minority, easy to be ostracized and attacked by extremists (from both sides) for being different from them. Moderate supporters of liberal democracy are often accused by extreme communists as “peaceful evolutionary” and “reactionary” while being accused by extreme anti-communists as “communist agents” or “double agents”. In their mind, the extremists would not accept diversity and reconciliation. This is the legacy of violent class struggle and long civil wars.

This incurable disease might have spread as metastasis to other parts of life including research and management. It should be clarified that research is different from propaganda, independent research different from guided research, and professional journalism different from propaganda.

Unfortunately, some people have wrong idea and assumption, using “propaganda activists” to attack researchers and academics. This is not only distorting facts and information (“talking past each other”) but also counter-productive (as “shooting one’s own foot”). Right now, continued propaganda on “peaceful evolution” (mindset 1.0) would unwittingly support the Chinese at the expense of our national interests and foreign policy objectives.

Some end notes

In the final analysis, to change the mindset and institutional system for effective management, people should change their paradigm and ideological perspectives. They should decide whether they want extremism or moderation, conservatism or reform, hatred or reconciliation, violence or non-violence, traditional or unconventional values, authoritarianism or democracy… whether they want brainwashing education for obedient tools of the system or open-mind and liberal education for reform and reconstruction.

Mr Phan Chu Trinh’s revolutionary philosophy (almost a century ago) advocating “people’s enlightenment, higher morale, and livelihood” (Khai dân trí – Chấn dân khí – Hậu dân sinh) still remains an unfulfilled vision, while the national train keeps moving slowly, going off-track, and falling behind.

National power systems and world order have been in crisis. Not only the UK and the US, France and Canada, but also the rest of the world face unpredictable challenges. This is a global political and institutional crisis helping Donald Trump (a business dealer) to beat the Republican and Democratic parties, and helping Emmanuel Macron (an inexperienced politician) to beat the major parties of both the left and the right, to win power.

The world has changed so much and so fast, but the mindset and institutional system have changed so slowly and so little. For a clearer vision, perhaps we should read carefully Moises Naim’s book (The end of Power, Moises Naim, Basic Books, 2013). However, there is little hope that Xi Jinping would soften his ambition in the South China Sea (following the 19th CCP Congress). Even though “the Quiet Emperor” has chosen his successor (Chen Miner), his long shadow is expected to loom large at least for another ten years without a rival (Xi Jinping Has Quietly Chosen His Own Successor, Andre Lungu, Foreign Policy, October 20, 2017). Xi and the “China Dream” is the obsession of not only neighbors but also the rest of the world. But his zenith of power may be the “End Game” in this “Game of Thrones”.

NQD. October 27, 2017