The Road to Riches Comes With Potholes

This Communist-led country looks for `big' foreign projects but a lack of reliable roads, electricity, and working telephones discourages many investors

STANDING by the side of QL 1, as Vietnam's only north-south highway is known, a farmer straps a huge bag of rice to the back of his bicycle with an old inner tube. Vo Nga pronounces himself ``very happy'' with the government's revised land policies.

Since 1988, under a set of economic reforms known as doi moi, he has leased land from the state in exchange for 20 percent of his harvest. This system, he says, is a big improvement over collectivization, which he calls ``the inflexible policy of before.''

In those days, farmers worked fields cooperatively and received the same amount of rice no matter how hard they labored. The only problem was it wasn't enough to live on. ``Before doi moi,'' he says, ``we had to worry about finding food for everyday.''

In the nearby village of Quang Hung, Vo Thi Loan is asked how doi moi has affected her life.

Sitting on her haunches in the courtyard of a neighbor's house, wearing a brightly colored blouse and pants, she ponders the question as she scrapes dirt from the creases in her hands. ``Before doi moi,'' she says, ``we had only a rough trail into the hills for gathering wood.'' Now the village, reflecting the growing prosperity of its farmers, has built a road.

Underground during the Vietnam War

NEAR what used to be the demilitarized zone near the 17th parallel that divided Vietnam in half, about 10 miles along a dirt road from QL 1, is the village of Vinh Moc. There is a museum on a promontory overlooking the Gulf of Tonkin, but the best exhibits are underground.

In 1966, when US bombs and artillery began to fall, the villagers decided to relocate, digging a network of more than 6,560 feet of tunnels in the earth. Families lived in what the museum's tour guide calls ``apartments,'' but the hand-hewn chambers are no bigger than the inside of a Volkswagen Beetle.

It is a sobering place. Irreverence stops at the entrance to these tunnels, barred by the image of more than 1,000 people packed into the red clay earth, and the closeness and darkness of the spaces below. The guide points out a room she calls the ``infirmary,'' slightly bigger than the ``apartments,'' where she says 17 babies were born during the almost two years the villagers lived underground.

The Vinh Moc tunnels were among the most elaborate and secure the North Vietnamese constructed during the war. They were primarily inhabited by civilians, though the Communist-led guerrillas of the south found them useful in shipping war materiel.

The museum has several pictures of high-ranking Communist Party officials visiting the tunnels during and after the war. The villagers were celebrated as symbols of Vietnamese tenacity, and in a way they still are.

The party's policy of economic renovation seems to have barely reached the heroes of the revolution here. Nguyen Thanh Tri, a fisherman who helped dig the tunnels, says doi moi has improved his life, but not by much. ``Our life is very poor,'' he says, ``we don't have enough money to buy things.''

When Mr. Tri is asked what his greatest need is, he stops to think. His wife interjects: ``Rice, that's the most important.''

And the biggest change since doi moi? ``There's more information from the outside world,'' he says, explaining the village has recently installed a loudspeaker so residents can hear the Voice of Vietnam, the country's state-run radio service. Da Nang: foreign investors pass it by

FARTHER down the highway in Da Nang, both the complexity and the promise of Vietnam's rapid econo-mic opening become clearer. The city is the country's third-largest, but investment has lagged far behind the amounts spent in Ho Chi Minh City and Hanoi.

Truong Hao, an official in the Foreign Economic Relations Department of Quangnam-Da Nang Province, produces a list of the 28 investment projects the government has approved so far. They would bring in an estimated $200 million, ex-cept that many exist only on paper.

He points to a license granted in 1990 to a Soviet firm for a $1.7 million project. The endeavor, Mr. Hao says, putting it mildly given the state of the Soviet Union, is ``on hold.'' A $24 million hotel project, backed by a Hong Kong company, is also languishing. He estimates that only 30 to 40 percent of the approved $200 million is actually being invested. As is true all over the country, one of Da Nang's problems is its infrastructure: roads, telephones, and electricity are unreliable.

Government officials are finalizing plans to upgrade QL 1, which for the most part is an unevenly paved two-lane road without a center line. But as Hao points out, the government is concentrating on improving the northern and southern sections of the road, not the central part that runs through Da Nang.

So far, he says, ``the effects [of doi moi] on the economy of the province are not much, you see. We need big projects.'' Recently they got one: US inves-tors and a local tourism company signed a $245 million joint-venture agreement in September to create a resort at China Beach near Da Nang, where members of the US military used to take a break from the Vietnam War.

Hao says the most beneficial foreign-backed enterprises in the province are a pair of Taiwanese-owned garment factories. Although he says foreigners should pay workers more than the $35-a-month minimum wage - ``for Vietnamese companies, that's OK, but when you work for a foreign company, you work hard'' - he says he feels gratified the investors have brought new jobs to the province.

Yu Chang Han, vice mill manager at the Valley View Vietnam Industrial Co. Ltd, one of the factories, sounds happy to oblige Hao. ``The workers are good,'' Mr. Han says, ``better than China.''

Outside his glassed-in, air-conditioned office, hundreds of Vietnamese, mostly women, operate sewing machines that generate a jangly mechanical rhythm. The factory has a corrugated metal roof and dozens of ceiling fans. Even in the relative cool of October, the temperature is very warm.

Han's company is planning to open a second factory in Da Nang to expand their production of garments bound for Taiwan and Europe. His biggest problems are the government's lengthy approval process, the uneven supply of electricity, and Vietnam's lack of most-favored-nation trading status with the US.

Nonetheless, he says he is committed to Da Nang, and expects to turn a profit in five years. ``They learn fast,'' he says of his employees. ``I think they must have machines in the home.''

* Part 1 (Hanoi, Vinh) ran Tuesday Dec. 27. Part 3: Ho Chi Minh City, Binh Long runs Friday, Dec.30.

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