Vietnam: The Changing Face of Hanoi - Part II: The new consumerism

2000

Dr Greg Lockhart

Recent visitors to Hanoi are unlikely to be aware of the great changes that have overcome the city since the government inaugurated the renovation era and announced the development of a market economy in 1986.

When I first visited the city in 1989 people were still living in the back blast of the wars and the full-blown inefficiencies of a command economy. Beaten up trucks, state buses and black Ladas appeared in the streets. But the bicycle was still the universal mode of transport. In this period, it was possible to purchase Heineken beer, tinned fish from the Caspian Sea, and stale Russian chocolates. One "French" restaurant served thin beefsteaks with chips. There were few pharmaceutical products on sale. Clothes were of poor quality. Limited ranges of low grade electrical appliances, torches, and TV sets appeared in forlorn displays at state shops. No foreign language newspapers were available. Rusty rooftops littered a leaky skyline. Blackouts were a daily occurrence. Rabies was a problem and toilets were always disgusting.

Against this backdrop the change I have witnessed on subsequent trips to Hanoi --in 1995 and 1999 - has been truly striking. For one thing, the foreign investment boom of the early 90s soon began to transform the skyline. Quite apart from the building frenzy I have touched on in an earlier article (Asian Analysis, August 1999), the Australian entrepreneur, Greg Parnham, was an example of one who helped to both waterproof and beautify the city. He did this by establishing in 1993 the first factory to provide high quality "colorbond" roofing materials at reasonable prices.

At street level, the motorcycle (at a cost of about US$2,500 for standard models) has now superceded the bicycle as the main mode of transport, while new cars and taxis are commonplace. Between then and now a wide range of pharmaceuticals has become available. By 1999 excellent shirts, belts, and trousers were also on sale at low prices. Refrigerators, fans, air conditioners, TVs and hardware now fill many shops. Perhaps Hanoi cannot boast the 500,000 telephone subscribers, plus the 120,000 mobile telephone and 15,000 internet users that Ho Chi Minh City did in 1999. Yet slick marketing managers still get around town with their mobiles and, although plagued by firewalls, the computers in government offices and big companies are usually on line.

Hanoi may also be behind Ho Chi Minh City when it comes to restaurants. There is, for example, nothing in the northern capital quite like the southern city's Pho 2,000 (Soup 2000), the sparkling millennium soup restaurant that an overseas Vietnamese from California recently opened at 64 Vo Thi Sau. With an accent on sparkling stainless steel tables and freshly painted pink walls, this very popular restaurant provides clean soup bowls with high quality contents -- at the fairly low price of 10,000 dong (a few cents) a bowl. Nevertheless, it is worth noting that, along with the extended range of reasonable foreign and up-market Vietnamese restaurants that have opened in Hanoi in the last five years, super market shopping has also gained a toehold. In its air-conditioned precincts, prices are still relatively high. Yet the hygienic packaging of food and the beautiful display do help to stimulate the desire among consumers that should help to generate further change.

In keeping with shop front indicators, an independent UNDP survey recently showed that the government's renovation policies have been improving the standard of living. Although the following are national figures, they undoubtedly reflect trends in Hanoi. Average per capital living space has risen from 8.3 square metres in 1993 to 9.7 square metres in 1998. Makeshift housing is now 11 per cent lower than in 1993. 10.5 per cent of houses now have taps compared with 6.4 per cent in 1993. 76.8 per cent of households now have electricity connected compared with 49.6 per cent in 1993-although the biggest leap in electrification is in the countryside which is now at 71 per cent. Both the supply and conventional use of toilet bowls is also slowly increasing.

Of course, the display of data can be misleading. It is still possible to see people urinating in Hanoi's main streets. Nor should I shrink from adding that, not far from a Hanoi supermarket, I have seen peasants carrying rice wine in rubber bladders that were made from tire tubes. Cyclo drivers, who commonly come into the city from the neighbouring provinces to earn enough money to send back to their families, can make less than 300,000 dong (less than US$22) a month. Women bread sellers who squat around their baskets in the streets usually make considerably less. This compares with the national average of some 500,000 (about US$35 a month). I also know of a doctor at the Bach Mai International hospital who lives in a house with no taps. Because the electricity is only turned on to work the water pump in his quarter around 10 pm, he has to queue up at such an hour to fill his buckets. This makes him tired at work.

Whatever the consumer gloss - which includes a recent nation-wide drop in consumer prices - the slow installation of taps and toilets reminds us that Hanoi is still not a modern city. Nor, it must be stressed, are such amenities as we find in the city necessarily developing at the same rate in rural areas. Yet Hanoi's new consumerism does seem to indicate that, as a result of the government's renovation policy, life in that city is more hopeful than it has been in living memory. It may be added that steady national GDP growth of 4.7-5.0 per cent in the last year, industrial growth of 10.5 per cent and agricultural growth of 6.3 per cent tends to support such an assessment.

WATCHPOINT: Despite much on-going poverty, the changing face of Hanoi indicates that living standards in the country as a whole will continue to rise.

 

About our company:

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.

Go to top