Foreign Influence on Vietnam’s Economy
A short reflective essay on Understanding Vietnam
Emma

Hundreds of conical hats have been dispersed among the acres of green rice paddies that we have passed in our tour bus. Several women have sat at sewing machines in small villages working quickly on perfectly tailored men’s suits. Many children have pleaded me to buy hand crafted toys and bottles of cold water along the paths to Buddhist temples. Pairs of business men and women have zipped by the sidewalks on motorbikes, hurried to get to corporate jobs. From agriculture to technology, Vietnam’s economy is fed by a diverse range of people, regions and businesses. In reflection, it is my belief that through imperialism, war, tourism and labor demand; foreign countries have played an enormous role, both positive and negative, in molding Vietnam’s economy.

Vietnam’s present day market systems are somewhat flawed due to lack of structure and state of relatively new peace. Several factors and habits of the street markets have set back Vietnam’s potential profits. First and foremost, the organization of streets by product is not economically efficient. When high competition and huge supply meet the consumer demand, prices are driven dramatically down. The store owners and sales people put in an enormous amount of energy and time, yet yield a very minimal profit. This is remarkably inefficient. Secondly, the sales tactics show a clear lack of training, and desperate urgency. As stand-out American tourists, many of us have been driven away from making purchases due to extreme hovering and pestering. In a few cases, I have been ready to buy something and walked away because of aggressive sales people. The individuals selling on the street have also become masters of insincere compliments and extreme price inflation for stand-out tourists. With each purchase you must finagle the right price level that is both respectful of the craft or product and realistically matched with quality and value.

The products sold in most cases are made more cheaply that one would imagine. A set of bracelets that we were promised were made of water buffalo horn were proven to be plastics when they snapped in half the following day. This also raises the question of production. If these items can be sold to cheaply, the cost of inputs and labor must be inconsequential. With cheap labor, I automatically think of sweat shops and labor laws. For the most part, I have seen people on the streets making the toys, baskets and crafts that are being sold, but I am inclined to wonder about the existence of child and shift labor restrictions. Several of the times that we have seen children on the streets, they have been selling things or begging for money. One day we saw a six year old girl, my guess, darting between cars and motorcycles around Saigon’s city street begging with infant in tow. While tempted to contribute to her collection, I knew that this would only feed the system, encouraging her parents to send her back to do the same task the next day. Children of this age should be playing with peers, reading books and embracing their innocence, not endangering themselves to make a small sum. Overall, I have observed several street-level, money making tools that are hurting the profits of Vietnam’s lowest socio-economic class.

After spending one month traveling in several different regions, I was left wondering how Vietnam’s economy got to the place where it is today. How it is possible for a country of wonderful people and strong natural resources to be so disorganized economically. I personally concluded that it is in large part due to the influence of foreign countries in the past and present.

A long history of imperialism and invasion from countries worldwide dramatically affected the direction of Vietnam’s economy. For nearly a millennium, the Chinese ruled Vietnam, until independence was finally reached in 937. In the next centuries Vietnam had shorter periods of conflict with Mongol forces, the Ming Chinese, the Portuguese, Dutch and other European groups. The next major foreign influence was the French colonization that began in 1858. The last major conflict was with the American forces in the 1960’s during Vietnam’s American War. Each of these foreign invasions extremely affected Vietnam as a whole. They have also dramatically shaped and molded the economy. I believe that the centuries of foreign rule and invasion are directly responsible for the lack of structure and organization in Vietnam’s modern markets. As I described before, it is clear that bad market habits exist within the country. It is my impression that these could be avoided if proper training and education were enforced.

After the American War ended, different regions of Vietnam responded in different ways. For the most part, people chose the fastest routes of making money. In most regions this was through agriculture. In Saigon however, the response was different. One guide described to use that the people of Ho Chi Minh City symbolically ‘put their noses to the ground as soon as the war was over’. Ignoring the reality of the war, the city as a whole has chosen to grow as quickly as possible. This is evident through the enormous hotels, fancy European clothing stores, the inflated prices of indigenous products and large volume of foreigners. I would also like to make the credited but broad generalization that the south and certainly Saigon, is much cleaner than the north of Vietnam. I believe that this can be linked to the different methods of coping after the American troops evacuated. If I pin the structural issues routed in the past to foreign invasion, I must also discuss the current effects of foreign influence on the Vietnamese economy.

The modern economy of Vietnam relies largely on tourism. From travel agencies to entrance fees, profits from people visiting Vietnam make an enormous contribution to success economically. I believe that in many cases, individuals and companies are dependent on this inflow of funds. With every hotel we stayed in, temple we visited, restaurant we ate at, tour guide we relied on and object we purchased, we directly increased Vietnam’s gross domestic product. A countries gross domestic product, their GDP, is composed of their consumption, government spending, investment, exports and import. This value is the tool used to measure a country’s overall wealth. Through each transaction made, tourists boost Vietnam’s GDP. While much of this is positive, one could argue that the high tourist demand is limiting to Vietnam’s growth and innovation. If so many Vietnamese people can find jobs and profits in the tourism industry, then they are turned away from other careers that may benefit the country more so in the long run. Tourism is also usually paired with environmental justice issues. While tourism is capable of single-handedly carrying many communities worldwide, it hugely increases the number of people relying on the country’s resources. From oversized tour buses to large scale hotels, I would assume that Vietnam’s carbon footprint in much higher than it may have been without tourism. Despite these potential down sides, tourism is a huge industry that provides a huge amount of labor and profits to Vietnam.

While ethically debatable, the foreign demand for cheap labor has also helped decrease Vietnam’s unemployment level. Starting with our drive from the airport to the hotel on the night of our arrival, we have seen several huge factories surrounding Vietnam’s main cities. Through the darkness surrounding our bus, we passed large depots of huge international companies such as Nike, Canon and Yamaha. These companies have established factories in Vietnam because of the surplus of labor. With such a high demand for jobs, the firm is allowed to basically dictate the wage. To benefit their own profits it is usually ridiculously low, especially for factory jobs that tend to be dangerous. It is predicted that in years to come, Vietnam will fall into a powerful economic position globally, like the one that China is currently in. I was intrigued to hear from a tour guide of ours that despite the less than perfect working conditions and low incomes, many Vietnamese citizens are thrilled to be given the opportunity to work with these big businesses. The pitfalls of the factory jobs must be outweighed by the faults of the other option. I can assume that these workers would otherwise find jobs that were less reliable and yield an equal or lower profit. Despite the moral issues of large corporations inserting themselves into countries eager for profit, many international firms help meet Vietnam’s high demand for employment.

In conclusion, I believe that Vietnam’s large structural problems, as well as the country’s current economic sustainability, can be accounted for by the influence of foreign countries. As a result of unwarranted foreign invasion and imperialism, the Vietnamese people overlooked crucial steps that must be taken when building a strong economic foundation. This has put Vietnam in a disorganized position that has inhibited economic growth. On the other hand, I believe that the countries that are to blame for these problems can be credited with the positive effect they have had on the current economy. Through tourism and foreign investment, countries such as France and the United States have made some attempt to make up for the incredible pain and destruction they caused. Above all, I take from this the lesson that each country can have an enormous effect on the rest of the world. Each interaction that occurs affects everyone in the present and future. Beyond the economy which I have zeroed in on, much of Vietnam’s current state is a direct result of foreign influence.