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Professor David G. Marr
So far, Vietnam has weathered the Asian economic crisis reasonably well, even though foreign investment has plummeted, the balance of trade has worsened, and the banking system is under increasing strain. Vietnam was slower to feel the storm, but by the same token is probably going to take longer to recover than some of its neighbours. The crisis has strengthened the hand of conservatives within the Communist Party, who never fully accepted the idea that Vietnam must hook its star to the global economy dominated by the United States and other capitalist giants. They continue to push for tariff and quota protection against foreign imports, subsidies to state-owned corporations, and tighter controls on alien political and cultural influences.
Reformists enjoyed a considerable degree of popularity during eight years of economic growth, when many citizens could see their material conditions improving, and feel that the future held even greater prospects. A cargo cult mentality developed - shops stacked with flashy consumer goods, families striving to acquire the latest model motorbike or TV set, and the population transfixed by foreign ads and mass media that promised a life of incredible plenty. Politicians rode this wave of material euphoria, constantly making the point that only the Communist Party could keep growth on track, just as only the Party could have masterminded defeat of the French and then the Americans. Despite their Marxist-Leninist conditioning, there was little or no attempt to re-educate people about the vagaries of international capital flows, the volatility of global commodity prices, and the historical inevitability of economic recessions or depressions. Nor was any effort devoted to creating some credible new ideological underpinnings to connect market forces, social equity and Vietnamese national identity.
As more Vietnamese are pinched by the economic downturn, they naturally come to question specific Party policies, although media restrictions make it difficult (but not impossible) to voice their criticisms publicly. Looking for someone to blame, people are quick to finger particular officials seen to have abused their powers and become rich during the reform era. Top Party leaders have not been slow to feed some of these accused subordinates to the wolves, while continuing to stress that most officials are clean, and no changes are required to the overall political system. As a discourse preoccupied with personal morality or immorality, corruption excites much public comment yet poses little threat to the political status quo. The longer economic reversals persist, however, the more emotional and pointed the public criticisms are likely to become.
WATCHPOINT: Look for signs that certain Party leaders are prepared to critique the system openly, whether from a conservative or reformist starting position.
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AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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