Monthly Article

December 2013 Article – Vietnam

By Jerry Pacheco

Vietnam – this is a word that conjures up a lot of pain, anger and sadness in the American psyche, due to the war that the U.S. fought with this southeast Asian county in the 1960s and early 1970s. Millions of Americans fought in the war or have friends and relatives who fought, and many lost loved ones. As a little boy growing up in the late 1960s and early 1970s, I watched the news with my parents and saw disturbing reports about the war and the Americans who had been killed that day.

I remember living in a logging camp in Milan, New Mexico, and watching the train carrying mortars, jeeps and tanks past our mobile home. My uncle explained to me that this was war supply headed to the West Coast and eventually to Vietnam. I had another uncle who fought and was wounded in Vietnam. He came back with what we recognize today as Post-Traumatic Stress Disorder. It took him a long time to get his life together. For years after he returned home, he never talked about his experience and I was told never to ask questions about this subject.

After its war with the U.S., Vietnam invaded neighboring Cambodia and got involved in another war with the Chinese. It then settled into a communist state that remained off limits to the U.S. During the past 15 years, Vietnam’s isolation and renegade status has been changing. It has opened up its economy to foreign investment and its exports to the world have been growing. The U.S.-Vietnam Bilateral Trade Agreement, signed in 2001, was designed to open up trade between the two countries, and this is precisely what has occurred. According to the U.S. Department of Commerce, bilateral trade has gone from $2.9 billion in 2002 to nearly $25 billion in 2012 – almost a tenfold increase. In 2007, Vietnam was voted into the World Trade Organization and agreed to lower tariff barriers to its market.

During the past decade, Vietnam’s GDP growth has ranked among the highest in the world, averaging approximately seven percent per year before cooling off to 5.9 percent in 2011 and 5 percent in 2012. Foreign investment in Vietnam grew exponentially during this period of time, in spite of dropping nearly 40 percent in 2011. Last year, this figure was up by 12 percent.

The Department of Commerce Commercial Guide on Vietnam states that the best markets for U.S. exporters are in agriculture, machinery, chemicals, instrumentation and software. U.S. firms have made strong inroads in these sectors, which are poised for more growth in the years to come. Vietnam is now routinely discussed as an alternate economical production base when compared to China. Other promising sectors are real estate, tourism and construction. The country also is racing to improve its public infrastructure and is investing in water utilities, electricity and gas distribution.

Despite its progress, the country still faces problems similar to those in other developing nations. Although it has passed strong anti-corruption laws, corruption remains rampant. Thick government bureaucracy and the country’s ever-changing laws regarding commerce are a barrier to trade. And in spite of the opening of Vietnam to the world, it still has strong characteristics of an oppressive regime, evidenced by its crackdown of outspoken critics of the government, groups that become too comfortable in their independence, and the media, which is still heavily monitored by the government. Finally, as with many developing countries, protection of intellectual property remains a challenge and piracy runs rampant.

These problems will need to be overcome if Vietnam is to ever realize its potential, and in that respect much of the world is rooting for this country, even its old enemy, the U.S. More than 44 years after he fought for the U.S. Navy as an officer in the Mekong Delta, Secretary of State John Kerry recently returned to Vietnam to promote environmental issues and trade with the U.S. The fact that such a high-ranking U.S. official who fought in the war can do this nearly five decades later is an indication that the two countries intend to strengthen their ties and move forward not as enemies, but as trade partners. A lot of work needs to be done, and only time will heal the ever-present wounds of a war that took both nations to the edge. Trade is a mechanism by which enemies can become partners and increased mutual understanding can take place. The U.S. and Vietnam certainly seem to be going down this path.