New Vietnam premier sets out to defend socialism

Pham Hung, Vietnam's new prime minister, led a riot against French colonists in 1931, directed the 1968 Tet offensive against the Americans, and sparred with Cambodia's Pol Pot in the 1970s. He now has a new dragon to slay: rapid inflation. Prices are nearly out of control in Vietnam. The annual inflation rate has ranged up to 700 percent at times this year. Most recently, the nation's economy has been hit by rumors of a pending currency change and by a drought in the north that reduced this year's rice harvest by 700,000 metric tons.

``Our biggest difficulty at the moment is that supply and demand are in serious imbalance, thereby affecting prices,'' said Vo Van Kiet, the country's deputy prime minister and planning chief, at last month's National Assembly meeting.

The selection of Mr. Hung as new premier is seen by some analysts as a reaction to the liberal reforms of Nguyen Van Linh, who was selected Communist Party secretary-general last December. Others say he is an interim leader, unable to stop the reform efforts of Mr. Linh and Mr. Kiet.

Hung, No. 2 on the ruling Politburo, was in charge of internal security from 1980 to early this year, and leans toward using the same kind of controls in suppressing price rises as in fighting state enemies. The defense of socialism against capitalism and individualism should be equal to past battles to save the fatherland, he says.

Vietnam's economic woes include: stagnant growth in exports and in tax revenues, reductions in personal income, excessive state subsidies, and lack of foreign exchange for construction projects. The unofficial exchange rate of the nation's currency against the US dollar has doubled since April.

Most of all, says Kiet, annual grain output remained level while the population grew by more than 1 million during the past three years. He said that the grain shortage this spring was a ``tense situation,'' solved by a massive hauling of grain from the south. As much grain was moved in May as during the previous four months.

``This spells out the importance of the food problem and the need to solve it in a more radical way,'' he said. The dilemma for Vietnam's leaders is whether to rely on private enterprise or to use the state and party apparatus to force economic changes.

Both Kiet and Linh praise their recent ``bold'' policies of promoting private enterprises, such as the planting of peanuts, pepper, and coffee by families, raising of shrimp for export, and manufacture of consumer goods.

In the past, Hung has been critical that the state only controlled some 60 percent of the nation's retail trade. State organizations must transform the people's ``arbitrary and individualistic activities into methodical ones,'' he said in 1983.

Two years ago, in response to a sudden rise of rice prices in Ho Chi Minh City (formerly Saigon), he deployed ``market management forces'' - young party workers - into the streets to halt the price hikes by educating and organizing rice traders. ``After two days of applying that method, rice prices dropped,'' he said.

Some analysts say Linh's policies and the recent bout of inflation have forced him to accept Hung as prime minister. Others, however, say Linh needs Hung's security expertise to make the necessary changes, especially in curbing party corruption. Both men worked closely together in the past, directing the war in the south against the US.

Nonetheless, the National Assembly meeting indicated a serious challenge to Linh, just seven months after a party congress brought him to power.

On June 18, the council of ministers passed a new decree granting stronger enforcement powers to the local party officials and business managers in checking price increases - to keep them below prices of late April 1987. ``We must step up the inspection and control work of the state,'' Hung told the National Assembly. ``This is to ensure the authority of the ... proletarian dictatorship.'' And the new council has given the need for ``security, social order, and national defense'' the same priority as the recent party goals of increasing grain production, consumer goods, and exports.

Perhaps in a dig against Hung, Kiet said the problems are caused by party personnel ``who do not really understand the idea and viewpoint of renovating the managerial mechanism and who are still accustomed to administrating management simply by means of administrative diktats.''

One other apparent dispute is over a proposed foreign investment code. Vietnamese officials have been saying for months that the draft code, which had been widely circulated, was to be approved by the nation's legislature.

The fact that it was not perhaps indicates a debate over how much to open the economy to Western business interests, rather than further dependence on Soviet-bloc ties, says one Western analyst.

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