From: jdo@emperor.sjc.mentorg.com (James Do)
Subject: [news/TheEconomist] VN: North-South divide still evident
Organization: Mentor Graphics, San Jose, CA
Date: Wed, 8 Apr 1992 22:45:50 GMT

4 April 1992
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    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 land
and 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 licences 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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