From: quangl@tabasco.sps.mot.com (Quang Le)
Subject: [ECO]Still Divided
Originator: daemon@media.mit.edu
Reply-To: quangl@tabasco.sps.mot.com
Organization: N/A
Date: Thu, 9 Apr 1992 02:14:42 GMT

Copyrighted material from "The Economist" April 4th 1992. Posted 
without permission. Read at your own risk. :-))

The country is like a dumb-bell. Its weights are the deltas of the Red River
in the north and the Mekong in the south, where the best landand most people
are found. The handle is a mountainous corridor more than 1,000 kilometres
(620 miles) long, balanced in the middle by the Hai Van pass, between Hue and
Danang.

Cross the pass and the climate changes. The old Saigon government used to make 
much of this difference, arguing that the 1954 partition of Vietnam was no more 
than recognition of a fact of nature. As the government of a unified Vietnam moves
away from socialism towards a market economy, the fundamental differences between 
the country's north and south are once again becoming apparent.

Nowhere is the gulf more obvious than in the gap between Hanoi and Ho Chi Minh City,
as the Communists renamed Saigon when they took it over in 1975. Hanoi has changed 
greatly over the past three years. The streets are now lined with shops - there used 
to be none - and clogged with motorbikes. But Lenin's statue still shakes its fist
at the army museum across the road and sentries guard Uncle Ho's mausoleum.

Southerners view the capital as a nest of bureaucrats and dreamers, happiest sitting
in cafes reading poetry. The northern picture of Ho Chi Minh City is just as 
dismissive. "They shout and drink a lot, but don't know how to choose or change 
their leaders," is the view of an academic in Hanoi.

Underlying these stereotypes are two different economies. After four decades of 
communism, nearly all of Hanoi's industry is state-owned and most of it runs at
a loss. In Ho Chi Minh City private business is back with a vengeance. By the end
of January foreign investors had been granted 383 licenses to invest a total of 
$2.8 billion in Vietnam. Three-quarters of this money will go into Ho Chi Minh 
City and its hinterland. The city's middle class is losing its inhibitions about 
flaunting its wealth - tennis clubs are full of Vietnamese sporting graphite rackets
and the owner of the franchise for Kenwood stereo systems reports strong demand for upmarket sets selling at $2,000 a time.

"In economic terms, the north is 30 years behind the south," says Nguyen Xuan Oanh, 
who has taught at Harvard (many Americans find it easier to call him Jack Owen), 
served briefly as prime minister of South Vietnam and now advises the government on 
economic matters. "We can't call ourselves unified and have differences as glaring 
as they are now."

Is there a risk that the country could once again snap in two? Not if Hanoi can help
it. The north has a historical fear that without the south it would be too easy a 
morsel for a rapacious China to swallow. It also needs tax revenue from the south 
to help rebuild its infrastructure.

The government will therefore do all it can to strengthen the links between north 
and south. While Do Muoi, the head of the ruling Communist Party, is every inch a 
northerner, Vo Van Kiet, the prime minister, and Phan Van Khai, Mr Kiet's first 
deputy, are southerners. They are trying to speed up the process of economic reform 
by applying the south's experience of running a market economy to the north.

Though Vietnam is in little danger of splitting in two, it faces a more insidious 
threat. The Hanoi government's message to the provinces is simple:  since it has 
no money, they must attract foreign investors, otherwise they are on their own. 
That means the provinces of the north will remain grindingly poor while they wait
for wealth to trickle up from the south.

Compare, for example, the provinces of Nghe An and An Giang. Nghe An is probably
the poorest in Vietnam. American bombers and the guns of the Seventh Fleet left
only one house standing in Vinh, its capital, which was later rebuilt by the East
Germans in a predictably hideous fashion. The annual rice crop of 700,000 tonnes 
is equal to 250 kilos (550lb) per person, little more than subsistence level. The 
province's only industry is an outdated cement plant, which needs $10m spent on it.
"We are waiting for foreign investors to come," says a forlorn provincial official.

An Giang, on the other hand, is booming. It is not troubled by the typhoons that 
sweep the north each year and its soil is fed by the Mekong. This year's two rice 
crops will, it is hoped, produce 900 kilos per person. The main tractor dealer in 
Long Xuyen, the provincial capital, sold private farmers 10,000 tractors last year,
each costing 80m dong ($7,200). The editor of the provincial newspaper guesses
there are at least 50 dong-billionaires in town. The tricky part for the government
will be when it tries to redistribute some of An Giang's wealth to places like Nghe
An. The real danger is not that Vietnam will split into two countries, but rather 
into 49 baronies, each of them loth to share power with the centre, either because 
it has failed to help them, or because it takes too much money in tax.
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