Doi moi facing challenges of competitiveness, corruption
Dr Martin Gainsborough of the Centre for East Asian Studies at the UK’s University of Bristol, and technical advisor of the UNDP’s Doi moi Review Project, spoke to Viet Nam News recently about 20 years of doi moi (renewal).
What are Viet Nam’s ma-jor achievements under doi moi? What are their causes?
When I first visited Viet Nam in 1990, and then again in 1991, it was a very different country indeed that I set eyes upon. My early memories of HCM City are of a quiet, even sleepy, city. Of course, no one would call HCM City sleepy now! I also remember the limited choice of goods available in the State stores in Ha Noi, whereas now the city’s people lack of very little if they have money. These are just a few personal observations but they serve to illustrate one undoubted success of Doi Moi: that is, generally speaking, living standards have been raised considerably. Moreover, this change is not one simply limited to the big cities even if there are real challenges facing the country in ensuring that development is broad-based. From here, we could go on to highlight Viet Nam’s success in penetrating world export markets, mainly – it should not be forgotten – with primary products and low-end manufactured goods. Nevertheless, this is an achievement of the doi moi era.
Other achievements include negotiating the bilateral trade agreement with the United States and soon-to-be membership of the World Trade Organisation. Doi moi’s success is not just economic statistics and trade accords: look at what people wear, how they spend their leisure time, and the aspirations they have for their children. All these things capture the way in which, compared with the difficult days of the late 1980s and early 1990s, Viet Nam’s future looks so much brighter.
Turning to the causes of these achievements, we come to a more tricky question. Within the scholarly community, there is an endless debate as to whether the success of doi moi is the result of successful policy or whether it is in spite of it. That is, to what extent should the government be given all the credit for the success of doi moi or have Viet Nam’s people – entrepreneurs, farmers and so on – seized the opportunity themselves? In reality, the answer is likely to be a bit of both. Over the years, the government clearly has recognised what needs to be done and has gone about trying to do it. However, given what we know about policy implementation, it is also the case that we have seen experimentation and creativity on the part of Viet Nam’s people, sometimes even before the regulations are clearly laid out. In all likelihood, this is what happens in most countries. However, the challenge for any government is to create a climate in which creativity is nurtured and encouraged.
What are the major challenges facing the doi moi policy today?
Didn’t the former party general secretary, Do Muoi, once say “capital, capital, capital” when asked what the challenge facing Viet Nam was? Today, we might insert the words “competitiveness, competitiveness, competitiveness” although this is not to deny that there are still challenges remaining in the area of capital market development. As Viet Nam’s firms are increasingly realising, competition on the world market is tough and it is not going to get any easier as Viet Nam liberalises its markets. So, a major challenge facing doi moi today is how to meet the competitiveness challenge. This is one of the key issues we are thinking about in the Doi Moi Review Project. Of course, there are no easy answers. However, we think two things are particularly important. These are a national technology policy and natural resource-based industrialisation. The former involves seeking to harness the technological power of foreign investment to develop systems of national technological innovation. The latter involves capitalising on the country’s natural resource endowments to develop resource-based industries for the domestic market and export.
Meeting the ‘competitiveness’ challenge will not be easy. Personally, I am optimistic that Viet Nam can meet the challenge. However, whether it does so depends, I think, on reforms in other areas. So, in identifying the challenges facing doi moi, I would identify a second set of issues which have to do with governance, or in my own words “making the state work better”. Of course, there have been many achievements in this area already but strengthening the way in which policy is formulated, the way in which different institutions work together to implement policy, and reducing corruption are critical to Viet Nam’s success in the future.
What are the lessons Viet Nam could learn from reforms in other countries around the world?
Viet Nam can draw lessons from many countries. However, perhaps some of the most obvious lessons come from East and South East Asia. Malaysia and Thailand almost certainly provide pointers in terms of how to develop resource-based industries, for example. China provides lessons in terms of economic competitiveness – as Vietnamese people are only too aware given the prevalence of Chinese goods in Viet Nam. As a political scientist, my research concentrates mainly on the role of the State in development. Here, East and South East Asia provide a wealth of experience on which Viet Nam can usefully draw. In these countries, the successful states were the ones which were able to offer long-term political and macro-economic stability, provide clear, pro-business policies, and limit the extent of corruption. Looking at these three areas, different states in Asia have had differing degrees of success. However, one message is clear, the better a country performs in these areas, the faster it will catch up with its neighbours.
I wish Viet Nam every success in the future! — VNS