The economies of Thailand, Laos, Cambodia, and Viet Nam are growing. The global market needs and will get their low-cost and undeveloped resources of raw materials and labor. As a result, their growth rate will be greater than China’s in the near-term.
Their economic potential has been long recognized and was a key in mission planning during World War 2. The Japanese attempted to develop the region’s resources to rescue its war production devastated by America’s destruction of Japan’s merchant marine supply lines. The Allies prevented the Japanese from unlocking the region’s resources by bombing rail connections throughout Viet Nam and near Hanoi and feigning an intention to invade Indochina that tied-down Japanese military forces and precipitated a diverting and crippling famine in Viet Nam that took more Vietnamese lives than were lost by North and South Viet Nam during the American War.
China today knows the region is resource rich and development poor. China sees Southeast Asia as a raw materials storehouse and outlet for its goods manufactured in SW China.
The region has gained international voice through Association of South-East Asian Nations (ASEAN) and financial advice through the Asian Development Bank (ADB).
The region’s countries welcome the growth needed to meet the demands of their growing populations. What development track should each country use? The answer to that question will depend on the country’s history, culture, and politics.
Viet Nam has three development path choices in its post-colonial, post-Soviet era, to use the categorizes identified by Daniel Altman of the Dalberg Global Development Advisors, which are to:
- Develop on its own, a slow and problematic process.
- Accept aid from international organizations that impose conditions and require transparency.
- Allow foreign nations, the new colonialists, to invest in sectors congruent with the foreign states’ economic plans.
Viet Nam pursued North Korea’s self-development path after reunification in 1975. Growth was too slow and would not support Viet Nam’s growing population.
The Sixth Party Congress of the Communist Party of Viet Nam adopted a change in development policy in December 1986, now known as Đổi Mới (renovation). Viet Nam opened both to international aid organizations and to foreign investors. The CPVN moved from a planned economy to a “socialist-oriented market economy.”
Viet Nam is well on its way to getting development aid from international sources. Vietnam is an engaged participant in ASEAN, the ADB, and the World Bank. Viet Nam became the WTO’s 150th member on January 11, 2007. Viet Nam has an exemplary record for meeting its commitments under international treaties.
China's Rail Links in SE Asia from The Economist
China meanwhile realizes Viet Nam’s potential as part of China’s development plans. China is underwriting the costs of a new railway network in Southeast Asia to connect the region and China’s factories in the Kunming area. China persuaded Viet Nam’s leadership to develop Viet Nam’s bauxite resources needed for China, despite the daunting burden placed on Viet Nam’s electrical supply, the ecological costs, and the use of Chinese labor in the project.
The leaders of Viet Nam know their history with China and their people’s ambivalent attitudes toward China and its marketing practices. China’s economic strength makes it the largest new colonial power in the world.
An eight-fold increase in the trade deficit with China since 2002 to US$12.7 billion raised tensions, exacerbated by the increased smuggling of unauthorized Chinese goods into Viet Nam and their associated health and safety problems. China has built up military forces to enforce its territorial claims over Viet Nam’s Paracel and Spratly islands possessions in the South China Sea, which the Vietnamese call the East Sea. Chinese companies investing in Viet Nam import not only capital , equipment, and top-tier managers, but also front-line workers. China brings into Viet Nam both needed investment and unwanted problems.
The leaders and people of Viet Nam want American investment, and are willing to offer attractive terms for that investment. America has an outsized say in the world’s international development organizations. America’s political and economic interests in Southeast Asia act as a counterbalance to China’s.
I asked a manager at Vietsovpetro, the joint Viet Nam – Russia deep-sea petroleum extraction company, “Why do you continue this partnership when Viet Nam can go it alone?” He replied, “A Chinese fighter pilot will think twice before firing on an oil platform manned with Russian workers.”
Viet Nam wants American investment and American people in Viet Nam for economic, political, and cultural reasons. The opportunity and rewards are there.
Viet Nam Opportunities Review 