The stakes for Viet Nam

‘Breakthrough talks’ is not the first term that comes to mind when considering the history of Viet Nam – U.S ties. Yet with their meeting this week Viet Nam’s president Truong Tan Sang and US President Barrack Obama have an opportunity of putting ties between the two formerly warring states on a new footing. For Viet Nam, the meeting marks a critical and potentially transformative moment.

Some 38 years after the culmination of one of history’s most disastrous wars, Viet Nam remains relatively poor.  But more than two decades of rapid economic growth has occasioned sharp declines in poverty and significant if uneven improvements in living standards. Contemporary Viet Nam is an industrializing and rapidly urbanizing country struggling to realize its potential. To do so Viet Nam faces three critical sets of challenges. To each of which the US relationship has relevance.

A first set of challenges concerns the economy. Despite its potential, Viet Nam has recently descended into a slow-growth trajectory, the product not only of global recession but also to the country’s ineffectual system of economic governance. In contrast to successful East Asian industrializers, Viet Nam has notably lacked the strong, competent, and relatively autonomous leadership required to promote industrial growth in a coherent, vigorous, and sustained manner. Instead, self-maximizing interest groups within and on the borders of the state have forsaken the national interest for particularistic gains. In this way Viet Nam has developed a chaotic economic order that threatens to undermine future growth.

In the economic sphere Viet Nam needs three things: better infrastructure, a more skilled workforce, and more competent, transparent, and accountable governance. Improved ties with the US cannot itself address these shortcomings. On the other hand, expanded trade with the US will likely spur economic growth and bring potentially significant benefits to average Vietnamese. The prospect of improved US ties might bring new energy to Viet Nam’s lagging economic reforms.  The Communist Party’s insistence’ on a coordinated market-economy need not be an obstacle to developing a more efficient market economy.  But effective economic governance will require a fresh approach, which new economic opportunities and incentives from the US might encourage.

A second set of challenges concerns international affairs. One of the most important if potentially impossible challenges is managing ties with China and the U.S. Unlike the United States, Viet Nam has thousands of years of experience coping with China. Yet China’s rise poses new problems for both Viet Nam and the U.S. On the one hand, China is Viet Nam’s largest trading partner and Hanoi stands much to gain from stable relations and much to loose from unstable ones. On the other hand, Chinese expansionism poses grave threats to Viet Nam’s economic security.

The most obvious of these is China’s claims in the Southeast Asian Sea (a more appropriate term than the ‘South China Sea”).  Weary of leaning too far in either direction, many in Viet Nam’s leadership like to state the importance of forging strategic partnerships with both China and the U.S., which is a noble idea.  Improved ties with the U.S. would likely help Viet Nam contain Beijing’s bullying behaviors, even as the most important step would be US approval of the United Nations Convention on the Law of the Sea. To withstand Chinese influence, Viet Nam requires stronger support international arena. Strong ties with the US can help.

A final set of challenges concerns Viet Nam’s politics and indeed its political system. Some have described the current political situation in Viet Nam as a crisis. Indeed, intense intra-party competition over the past several years has produced a more competitive and fluid political scene. Absent the rule of law and accountable institutions, however, Viet Nam’s politics has devolved is a dysfunctional kind of intra-party pluralism in which interest groups’ self-maximizing tendencies have undermined coherent statecraft, sometimes giving the impression of a state adrift.

For the moment, fundamental political reforms remain elusive. But such are probably necessary if Viet Nam is to emerge from its present political and economic malaise. Significant improvements in political rights, the end of arbitrary arrests of regime critics, greater respect for constitutionally guaranteed rights to a free press and freedom of association would likely bring very significant improvements in relations between Hanoi and Washington. Ultimately, the evolution of Viet Nam’s political economy will be decided by politics in Viet Nam itself. Still, the future legitimacy of the Communist Party of Viet Nam cannot be won by repressive means.