Limits of openness in Vietnam

Vietnam eagerly welcomes foreign investment these days. But the American businessmen who rushed in after Washington finally normalized ties with Hanoi last year are discovering that Communist hard-liners still grip the reins. Tight ideological controls and a maze of bureaucratic regulations make Vietnam a difficult place to do business and imperil its continued economic advance.

The latest blow to foreign businessmen is a nationwide campaign that targets foreign commercial advertising as a "social evil" to be eradicated, along with prostitution, narcotics, and gambling. All over Vietnam, billboards for products like Coca- Cola and Esso gasoline are being blocked out by new coats of paint.

While technocrats in the ministries of Trade and Finance draw up plans for modernizing taxes and tariffs and the central bank prepares for the opening of a stock exchange, hard-liners in the military and Communist Party politburo worry that foreign investment threatens to undermine Vietnamese traditions, Ho Chi Minh's Socialist legacy, and continued tight political control by the Communist Party. "We are not afraid of capitalist enterprises, but of not being able to supervise and control them," the party's general-secretary said last December. Indeed, the government expects to keep the most important industries in its own hands.

A showdown between Vietnam's modernizing and hard-line factions could occur as early as this June's Communist Party Congress, when a new set of top national leaders is expected to be named.

Six years of market-oriented economic reforms have already brought impressive results. Foreign investors have thus far committed d18 billion. The economy is expanding rapidly, average incomes are rising, and inflation has been tamed.

But no Communist government anywhere, China's included, has yet established the rule of law and climate of predictability that businesses require for serious long-term investment. When Secretary of State Warren Christopher spoke in Hanoi last summer, he rightly emphasized that sustained economic development depends not just on legal protections for property but also on due process for all citizens, free exchange of information, and a free press. Vietnam's hard-liners are headed in the opposite direction. They are not just cracking down on foreign advertising, they are also arresting Vietnamese intellectuals who argue that continued economic reform requires more, not less openness to outside ideas.

Capitalist development may be compatible, in its early phases, with authoritarian rule. But longer-term progress will be stunted by insistence on Leninist ideological puritanism. Further, the U.S. Congress will rightly resist extending most-favored-nation trading privileges to Vietnam until it commits itself more firmly to due process and human rights for all.

Sooner or later, Vietnam, like China, will have to choose between its hopes for rapid development based on international investment and its fears of foreign ideological pollution.

-- The New York Times