Ho Chi Minh City, Vietnam — In its latest attempt to put a fallen economy on its feet, Hanoi plans a promotional blitz for a new investment law, serving notice to foreign capitalists that Vietnam is now ``open for business.'' But the code is not just to attract capital or to learn Western management techniques, admit Vietnam's communist leaders. One aim is to further weaken a Western economic blockade against Vietnam, imposed after its 1979 occupation of Cambodia.
The law's terms are generous compared to those in other capital-hungry nations, according to several interested Southeast Asia businessmen, who point to one provision granting 100 percent foreign ownership. Such terms are needed if Vietnam wants to catch up with its neighbors, especially China, in luring Western money and technology.
The code has been so long promised that its passage in December by the National Assembly, after more than three years of debate, was anticlimactic. It also left suspicions among some potential investors that the Communist Party has yet to resolve how to implement it.
Will, for instance, investments from the Soviet Union and its allies be favored over those from capitalist countries? Will Frenchmen be allowed to return to their former colony and buy up old rubber plantations, a sore point for elder communist war horses who shed blood fighting ``imperialism.''
The law does not specify exchange rates or even which agency will manage the law, thus leaving escape hatches for a government accustomed to rigid state intervention, according to one American businessman who visited Vietnam last month.
Just the same, hotels in Hanoi and Ho Chi Minh City are crowded with Asians, Europeans, and even Hong Kong-based Americans who hope to tap Vietnam's inexpensive labor force - average wages are five to ten dollars a month, although foreign companies will likely pay more.
The stack of investment applications, says one Vietnamese official, is ``a foot high,'' and Japanese investors top the list.
Other laws in such business-related areas as banking and technology transfer will need approval before investors can feel at ease working in the country, says Vo Dong Giang, chairman of the state commission for foreign economic relations. The investment code is just one of many capitalist-oriented steps taken by the party since 1986.
The National Assembly, although still largely a rubber-stamp legislative body, is expected to be meeting longer and with greater autonomy this year.
``Our country still has problems that make potential investors hesitate,'' says Mr. Giang, citing poor roads, inadequate power facilities, and lack of modern business skills. Advantages include abundant natural resources, cheap labor, and a ``stable political system,'' he says.
The law, he says, also guarantees profits equal to those obtained by investors in competing countries, no nationalization of foreign enterprises, and the right to use a foreign manager.
The only example of a current foreign investment cited by Giang is the seven-year-old joint venture in oil exploration with the Soviet Union. Just the same, dozens of companies, primarily from Singapore, Australia, and Japan, are already trading in Vietnam.
``Vietnam hopes it can attract investment primarily from overseas Vietnamese or from Americans who learned to like the country during the war,'' says a United States official, warning that the US Trading with the Enemy Act would prevent direct trade or investment ties between American companies and Vietnam.
The US also puts pressure on its allies in Asia and Europe to limit trade with Vietnam. Last September, Honda Motor Company postponed a decision to build a motorcycle assembly plant in Vietnam following a US Senate Resolution calling on Japan to discourage private investment in communist countries, including Vietnam.
Giang said the Hanoi leadership did ``take into consideration'' the possibility that US businesses would help Vietnam seek an end to the trade embargo.
Thailand, which just a few years ago feared a Vietnamese invasion from Cambodia, has recently allowed Thai businesses to seek out joint ventures in Vietnam, especially in the fishing industry. In December, Thailand announced a unilateral withdrawal of its troops nine miles from the border with Cambodia. The gesture was welcomed by Vietnamese leaders in exchange for providing help in arranging business deals.
This year, Vietnamese officials will launch a selling offensive for the investment code at international business meetings. But, says Giang, ``the most important advertisement is economic activity at home.''