Britain's Financial Times does its usual fine reporting on today's Vietnam. Some excerpts:
Just five years ago, Vietnam was the darling of foreign investors in search of the next hot emerging market after China, where Soviet-style stagnation had been transformed into an economic boom by a reforming Communist party....
Deep-seated problems, such as corruption, poor education and infrastructure bottlenecks – all often overlooked by investors in the boom years – have moved into sharp focus....
To many analysts, Vietnam serves as a warning of the pitfalls facing the region, even as Europe and the US struggle with their own economic crises. The Asian Development Bank has warned that Asia’s rise is not preordained – and that nations such as Vietnam, as well as China, will need to take tough political choices....
A bigger question is whether authoritarian regimes can develop high-income economies while sustaining a political system that curtails public debate and fails to promote the establishment of the strong, independent institutions needed to combat corruption and wasteful state spending.
Difficulties are in evidence across the country. A series of interest rate hikes, started this year as the government belatedly moved to get a grip on monetary policy, has delivered a hard blow to the economy. The key refinancing rate stands today at 15 per cent. Thousands of businesses have been forced to close, record numbers of strikes have broken out and bad debts have soared. Enquiries from new foreign investors have slowed dramatically, according to lawyers and consultants....
This has all appeared to overwhelm the government of Nguyen Tan Dung, prime minister, and the country’s ruling cadre – most of whom are alumni of Soviet-era institutions. Rather than pursuing further reforms, they have resorted to knee-jerk, backward-looking measures, including a crackdown on free speech, curbs on the import of luxury goods and restrictions on visas for foreign workers....
Social discontent appears to be on the rise, with land protests becoming common in Hanoi, as hard-up farmers complain that they have been short-changed by officials selling their land to well connected businesses on the cheap.
Some Vietnamese officials have conceded to foreign diplomats that they are worried about an Arab spring-type rising breaking out. Diplomats say this is likely to be little more than an attempt to justify a continuing crackdown on human rights.
Corruption is a serious problem, though the benefits are shared more equally than in Arab dictatorships toppled this year. Graft and weak governance remain significant obstacles for investors, particularly since the American and British governments began strict enforcement of laws against bribing overseas officials....
Authoritarianism seeds its own demise. Rather face the US or Europe's problems, wouldn't you?
