THE BLOG

Vietnam: The True Measure of Dung's Legacy

11/12/2014 05:53 EST | Updated 01/12/2015 05:59 EST
TANG CHHIN SOTHY via Getty Images
Vietnamese Prime Minister Nguyen Tan Dung (L) walks with Cambodian Prime Minister Hun Sen (R) during the official inauguration ceremony of Cho Ray-Phnom Penh hospital in Phnom Penh on January 13, 2014. Nguyen Tan Dung began a three-day working visit to Cambodia aimed at boosting bilateral ties. AFP PHOTO / TANG CHHIN SOTHY (Photo credit should read TANG CHHIN SOTHY/AFP/Getty Images)

On my sixth trip to Vietnam in 2007 I introduced myself to officials at the Canadian Embassy in Hanoi. Our diplomats abroad have never failed to impress me. My first meeting with Canada's senior embassy staff in Hanoi was no exception. But this time, it was also profoundly jarring.

I was told to brace myself; doing business in Vietnam was a slow, tedious, and burdensome bureaucratic maze. I was hoping to develop a business relationship on a major project that involved some Vietnamese government participation. But they said that if it involved government there was a high probability that bribery would be part of the equation. The briefing I received that day was a sobering eye-opener.

While I have never personally experienced any of this in Vietnam, much anecdotal evidence and Transparency International confirms the sentiment: Vietnam ranks 116th out of 177 countries in its "corruption perception" survey.

On the surface, this all sounded very discouraging. But there's a flip side. Since Prime Minister Nguyen Tan Dung took office in 2006, he has presided over a remarkable transformation of Vietnamese society. Vietnam has gone from a third world backwater to the "The New Asian Tiger" and "The Other Asian Miracle." That has happened in less than a decade. The previous seven were mired in foreign occupation, wars, and the unimaginable destruction of most of Vietnam's critical infrastructure as a result of years of the relentless bombing by American B-52's. Now, this is a country of 90 million people that lives in barely half the total landmass of Manitoba.

The people of Vietnam have decisively moved well beyond the remnants of the "American War," as it is known there.

Today, Vietnam is steadily climbing other rankings. It has climbed the OECD's Global Competitiveness Index to 75th out of 142 countries. Yet its growing pains endure and much heavy lifting by political leaders remains. But for any repeat visitor like me, progress is dramatic and noticeable.

In the past five years, mismanaged state-owned enterprises have been reigned in, inflation has been brought under control, and government has clapped down on spending. Entrepreneurship is running rampant. Shopping areas are always busy and commerce is robust. This relatively young population is educated and hard working. They are ambitious, smart, and technologically savvy.

Vietnam has been a country in transition for many years. One of the hallmarks of peaceful change has been just that: needed change has been peaceful in Vietnam. Political stability is the Holy Grail for any developing nation that aspires to be a developed one. And Vietnam owes much of its stability to the political leadership and regional statesmanship of Dung.

We must remember the backdrop: Dung and his colleagues have had the mother of all management challenges. From a closed Communist military dictatorship, they have been carefully liberalizing Vietnam's economy and institutions of governance. Some observers say that progress on both is slow. There's some truth in that. But what isn't in dispute is the fact that progress -- at whatever the pace -- has been consistent and positive since Dung's arrival.

It hasn't been without expensive and well-chronicled missteps, however. Despite those setbacks, Hanoi is managing extensive improvements to national infrastructure, massive annual new entrants into the workforce, and enhancing the quality of retirement life of those that are leaving it. Health care is improving and the literacy rate is close to 95 per cent.

A turning point came in 2007 when, a year after Dung became prime minister, Vietnam joined the World Trade Organization. The country's leaders chose to escape deep poverty by embracing free trade. And since then, it has been on an aggressive and sustained path to modernization. In its latest forecast, Vietnam's Ministry of Planning and Investment said it expects to attract $11.8 billion (US) this year.

Since 1995, when Canada and Vietnam signed a bilateral trade agreement, trade increased more than 20 times, reaching $1.6 billion in 2012. That's a pittance for Canada, but it's the upward trend that's important.

For 2015, Vietnam's GDP is forecast to rise to 6.2 per cent, up from a projected 5.8 per cent for 2014. This was better than the IMF projections of 5.6 per cent for 2015 and 5.5 per cent for 2014. Government data showed an acceleration of GDP in the third quarter at a rate of 6.19 per cent, compared with 5.42 and 5.09 for the second and first quarters, respectively. While growth above 6 per cent is still below the 7 per cent average of the past decade, it's better than the average 5.5 per cent from 2011 to 2013, when Vietnam country was mired in bad bank loans and low domestic demand.

As Guy Dixon wrote in the Globe and Mail last week, "Vietnam's economy recently suffered a slowdown, though by world standards it still looks like an express train."

Beyond its borders, Dung has steered Vietnam on a prudent and sensible path. This is no easy feat. As Robert Kaplan reminds us in "Asia Cauldron," more than half of the world's annual merchant fleet tonnage (including four-fifths of all the oil burned in China) passes through the South China Sea. This commerce, Kaplan says, has turned that waterway into "the throat of the Western Pacific and Indian Oceans -- the mass of connective tissue where global sea routes coalesce," investing its straits, shoals and islands with extraordinary strategic significance. This region could have easily become a flashpoint, militarily pitting China against several of its neighbors. Instead, Dung has called on leaders throughout the region to embrace a new era of economic and political cooperation.

Tensions, at least for now, have eased in the disputed Islands of the South China Sea, and leaders are talking. The world is safer tonight because of that. That has to be Dung's most important accomplishment to date.

Back at home, Dung and his government continue to push ahead on a dizzying number of fronts. The culture of cronyism that they inherited is far from eliminated, but it appears to have been significantly degraded.

In April of 2008, The Economist wrote: "The present generation of Vietnamese leaders, children of the independence struggle who want the best for their people, should think about who might come after them. If the next generation is less principled and more corrupt but cannot be dislodged from power, the country will slide backwards."

That is the true measure of Dung's legacy, and one he and his colleagues -- the heirs to Ho Chi Minh -- must firmly entrench. As Dung and his colleagues have convincingly shown, there's no going back for Vietnam.