How does change happen in Vietnam?

Doi Moi process of economic opening or the land reform of the early 1990s). Particularly important because Vietnam’s record on growth with equity, and poverty reduction, is second to none. He saw certain features as characterizing big change processes in Vietnam 1. Reforms are typically driven by crisis, as in the near collapse of the economy before Doi Moi, or the combination of lost Soviet aid and the oil price spike during the first Gulf War that triggered the land reform. 2. But the Vietnamese method, like China’s, is to use trial and error to assess a range of options, drop the worst ones and go large on the ones that work. So from 1979-86, various experiments were piloted, but only scaled up when crisis hit. He saw trial and error as particularly important in a large country like China or Vietnam, as you need learning and consensus to spread across the economy if you are to make these changes successfully – a real aversion to shock therapy, there. The latter aspect reminds me of the discussion on whether development should model itself on venture capitalism. Rather than think you can predict the future and pick development winners, it’s better, like a venture capitalist, to invest in 20 small ones, in the expectation that one or two will flourish. The trick then is to spot losers and cut them adrift, freeing up the resources to allow you to keep experimenting. It also resembles the evolutionary model of change that arose from Eric Beinhocker’s book ‘the Origin of Wealth’, which I previously reviewed at some length. So what changes might emerge form the current crisis (from which the Vietnamese economy is fast emerging)? He thought now might be the moment for the government to take on the job of restructuring economic institutions to sort out Vietnam’s problems of corruption, inefficiency and macro-instability. He reckoned Vietnam might follow the Chinese model, which he saw as getting the economy onto a high speed growth path, then sorting out the economic institutions and finally the political institutions. In China, he sees the first stage as more or less complete, the second as under way (eg the emphasis on public administration reform, or rediscovering equity and a harmonious society) requiring twenty years, and the third, fifty. He didn’t offer a timescale for Vietnam, but is proposing ideas for piloting a range of governance reforms on a small scale, involving things like new legal frameworks (he seemed very keen on the British legal system), and direct elections at local levels (something that is already happening to some extent). On future drivers of change in Vietnam, he saw the emerging middle class, both rural and urban, as the backbone of future change, with a knowledge of rights and ‘something to protect’. He said all the hardest questions in the National Assembly come from the business community. Vietnam is nothing if not ambitious – the government plans to treble per capita GDP by 2020. On past performance, and despite some big new challenges like climate change, I wouldn’t bet against it.]]>

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Comments

5 Responses to “How does change happen in Vietnam?”
  1. Duncan – I know Oxfam doesn’t want to get involved in politics but how can you write over 500 words on change in Vietnam without mentioning the Communist Party even once?
    Duncan: Fair point Ben, I guess this post is starting from the position that Communist Party rule is a given in Vietnam for the foreseeable future, yet in recent decades, rapid changes have taken place in the country. I’m trying to understand how that happens.

  2. matt desmond

    Talk to almost anyone in Vietnam who is not in the govt/business mainstream … they say the print (and more lately the electronic) media has been the major agency for change.
    It may be correct that the hardest questions in the Assembly come from the business sector. But the hardest questions for the Party are coming through the media.

  3. Mary Sue

    It would be interesting to know more details about how the trial and error learning process actually works. Who is involved? What roles do they play? How is it financed? What issues are prioritized and how? What feedback loops are the most effective?