VIETNAM walks a tightrope between two worlds. Emerging from three decades of war, the country has loosened the reins on its battered economy. But the ruling communists keep the political system in a one-party straitjacket.
This month, Vietnam faces two issues that threaten its delicate balancing act. From June 2 to 4, negotiations to resolve the 12-year civil war in neighboring Cambodia resume in Indonesia.
Vietnam, which invaded Cambodia in late 1978 to drive out the brutal Khmer Rouge and withdrew a costly decade later, sticks to the sluggish peace process in hopes of improving ties with rival China, cracking the US-lead economic blockade, and improving ties with less-belligerent Asian neighbors.
At home, the Communist Party plans its seventh congress June 24-27 to draw up a national blueprint into the next century. At issue will be the pace of doi moi or economic renovation launched after the last party meeting in 1986.
More touchy is the confrontation between reformists and hard-liners as Vietnam finds its way after the demise of sister regimes in Eastern Europe.
``The question is: Will there be a conservative backlash or the status quo?'' an Asian diplomat said about the party congress. ``They're desperately trying to get through this seventh congress with continuity.''
A Cambodian settlement is pivotal for Vietnam, analysts say. Last summer, Hanoi's client government in Phnom Penh set aside differences with three resistance groups, including the Chinese-backed Khmer Rouge, and accepted a United Nations peace plan. But since then the war dragged on as the four factions squabbled over the makeup of an interim government.
Nonetheless, diplomats say diplomatic efforts are inching forward. ``Vietnam is getting fresh reasons to believe that they have to keep the dialogue going,'' a Western observer says.
One is the hope that Vietnam can outlast the long-standing US embargo. The US has tied normal relations to a Cambodian settlement.
Recently, the impasse over normalizing relations eased slightly when the US agreed to open a Vietnam office to search for information on more than 2,000 Americans missing or captured during the Vietnam war. Washington also recently announced its first direct aid to Vietnam since the war: $1 million for assisting amputees.
``Vietnam hopes to buy time and outlast the Bush administration and the US hard-liners,'' says a Western diplomat. ``As relations improve with other countries, international support for the US embargo erodes.''
Regional businessmen and diplomats say that process is already under way. Trade relations are broadening with Thailand, and Malaysia is emerging as a major new trading partner, according to Ramond Eaton, a businessman and advocate of expanded Western trade with Vietnam.
Large deals are pending in rice and fertilizer, and Japan, which is planning several large projects, is the country's biggest trading partner after the Soviets.
``We're all anticipating some major leadership changes,'' says Mr. Eaton. ``The question mark is: Will they be for the better?''