Vietnam Spurs Economic Change

Party frees up trade and enterprise in bid to boost nation's sagging fortunes

THE more Vietnam's Communist Party embraces market economics - as it decisively did in late June - the more hard cash keeps piling up on Nguyen Van Tieu's bed.As the tax collector for this rural hamlet near the capital, Hanoi, Mr. Tieu recently began to collect payments in cash from local rice farmers, counting the grimy bills on the most secure and widest surface available. Foot-high stacks of dong (the Vietnamese currency) are spread over the planks of Tieu's wooden bed, which sits on the dirt floor of a creaky hut in a dirt-poor village. Just two years ago, farmers paid their taxes with sacks of rice - in a state-run, barter-type economy that sank Vietnam to the level of one of the world's poorest countries. In those days, Tieu's courtyard was awash with sacks.

Speeding up change The switch to a cash economy, which the party began timidly in 1986, was given a firm stamp of approval at its seventh congress held June 24-27. Party leaders removed all doubts about moving rapidly toward so-called economic "renovation," or doi moi. "Now we have done away with state monopolies and encourage healthy and legal competition," says Nguyen Co Thach, who is leaving the post of foreign minister and the ruling Politburo. More by necessity than by change of heart, party ideologues have reinterpreted Marxism-Leninism, citing the more flexible and ambiguous "thoughts" of late party founder Ho Chi Minh to justify allowing Vietnamese to earn cash for their labor, open private businesses, run their own farms, and trade more freely with each other and foreigners. Party leaders now cite "the human factor" in their ideology, letting people follow more self-interest. In Tu Dinh village, as elsewhere in Vietnam last year, farmers were freed from working on collective farms and granted long-term rights to till individual plots. Harvests rose almost immediately by 30 percent to 50 percent. "Of all our policies, that one alone brought success to agriculture," says Nguyen Cong Tan, minister of agriculture. Farmers were also allowed to sell rice at any price anywhere they wanted. The startling result was that a country which had a brush with famine in 1988 became a rice exporter just a year later. Such an experience showed party leaders that a socialist state is much farther off than they hoped. This congress concluded that the "transition to socialism" would be a long-term struggle using limited capitalism, and not short term as concluded in 1986. Vietnam's economy has been hit hard by a cutoff of Eastern European markets last year and the end of Soviet subsidies this year. Worst of all has been a 12-year investment embargo by the West that blocked loans from the International Monetary Fund. The embargo was imposed after Vietnam invaded Cambodia in 1978. The country will remain in economic "crisis" until at least 1995, says Dao Duy Tung, the Politburo's new third-ranking leader. Many party leaders say the last decade has been more difficult than any wars waged in Vietnam (five since 1940). "Never has our country had to face such difficulties," says Mr. Thach, adding that initial reforms begun in 1986 helped prevent the worst effects of the United States-led embargo of Vietnam. Leaders hope private and foreign investment will help. "From now on, the state will concentrate on only those sectors which a private company cannot [handle]," says Bau Ngo Xuan, head of the State Commission for Cooperation and Investment. Many Vietnamese hope the 13-man Politburo, chosen last month with eight new faces, will be more honest and practical in dealing with the problems. The first action taken by the new party chief, Do Muoi, was to meet the foreign press and plead for foreign aid. "The changes have not come fast enough," says Nguyen Khuyen, editor of the English-language Vietnam News. "Marxism-Leninism was thought to be the only basis.... But it's time to give Ho Chi Minh his due in history. It was through him that others' ideas came to be accepted here." Private ownership of land was ruled out at the seventh congress, however, despite calls by many southern farmers to take reforms further. Such a step would have meant that the party was abandoning socialism. A multiparty political system was also rejected. "If land is easily purchased and sold, then the poorest peasants will just sell their land and become poorer, and that would create instability," Mr. Tan says.

Problems with economy Government leaders openly paint a grim picture: The currency is unstable and unconvertible. Inflation is high. And joblessness is increasing rapidly as more than a third of the Army has demobilized, as hundreds of state factories deemed unprofitable shut down, and as 180,000 workers return from eastern Europe, the Soviet Union, and Iraq. In addition, half a million college graduates enter the work force yearly. Leaders are especially worried about the potential for instability caused by urban unemployment. Officially, 9.4 percent of the work force in Vietnam's cities is jobless, but the larger problem is underemployment, says Labor Minister Tran Binh Hoan. Also worrying are ideas of democracy and revolt brought back from Eastern Europe by workers. "They have a different attitude than we had in mind," says Ha Quang Du, a Ho Chi Minh Youth Union official. "They have had contact with other social strata that has influenced them. We hold sessions with them and try to persuade them on what is real democracy, that they should not hurt social order or create obstacles to national development." The seventh congress altered a basic Marxist tenet that labor cannot be treated as a commodity, that is, sold and bought. "Whoever has capital and technology can employ labor," says Mr. Hoan. "Our party and government have realized and accepted that labor is a market." In addition, leaders decided that party members can run "small" businesses, a practice judged " exploitive " in the past. With the emergence of private companies, some with thousands of workers, the communists are being forced to consider allowing independent unions, and granting them the right to strike. One heartfelt blow to older communists is the drop in the literacy rate, after decades of building it up. More teachers are quitting the profession than joining it, the dropout rate in high schools is rising, and educational quality overall has declined, says Education Minister Tran Hong Quan. "Many families now want their children to work instead of learn," he says. "People don't see the direct benefit of learning." As a result, education spending has been boosted this year to 12 percent of the government budget from 6.7 percent five years ago. And private schools have been allowed to open up. In one district of Hanoi, for instance, 40 percent of the schools are now private.

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