Changes at the VCP Congress, ‘Conservatives and Liberals’ and Where is Vietnam Heading? - 2001

Changes at the VCP Congress, ‘Conservatives and Liberals’ and Where is Vietnam Heading?

By Michael Karadjis

As comrade Allen Jennings and I wrote in our GLW article, the 9th Congress of the Vietnamese Communist Party (VCP), among other things, continued to strongly stress the socialist orientation and a dominant role for the state sector alongside continued economic liberalisation; vowed to further step up the fight against corruption in the Party and state, including via appealing to the grass-roots to denounce corrupt leaders; and put extra stress on the needs of ethnic minorities.

The first two of these central themes represent continuity with the policies of the outgoing leadership, while the third represents part continuity but with greater emphasis in response to recent events in the Central Highlands, rather than having any relation to the changes in leadership.

Here I will look in more depth at what was behind the leadership changes, the currents in the party and some of the main issues of real discussion. At the outset I must stress that the Vietnamese political system and media are so opaque that what I say here is based on over a year of reading between the lines and talking to lots of people who are themselves only partly in the know; therefore, it is quite possible that I may here make some assumptions about certain alleged “conservatives” or “liberals” which could well be knocked down the next day if any real information ever came out.

Regarding real discussion, there was little of it in evidence at the Congress, which was essentially a formalistic, ceremonial event – much as it was an honour to be invited to a Congress of a Party that once delivered one of the most historic defeats on world imperialism.

Within the Party there had indeed been plenty of frank discussion before the Congress, but none of it was aired either in front of fraternal foreign delegates or in front of the Vietnamese people as a whole. Once consensus had been secretly reached on the content of the Political Resolution, the composition of the Central Committee, the changes to the Statutes and the new Party chief, the Party presented all this to the Congress, attended by fraternal parties, and televised to the population.

It should be stressed that this particular interpretation of “democratic centralism” by a party that has been the ruling party for decades is greeted by growing cynicism by the population. While Congress sessions were avidly watched, discussion about them afterwards usually consisted of little more than a yawn.

As such, for us, the Congress sessions consisted of the delivery of the Political Report (which could be read in the media), delegates speaking at further length on particular sections of the report, and – for about half the total length of the sessions – greetings from the 34 foreign parties represented.

The Party’s attempt to maintain total secrecy about its internal is tragicomic given the way information flows around the world. The Party had decided in the week before the Congress that former General-Secretary Le Kha Phieu would be replaced by Nong Duc Manh, but did not officially announce it until the Sunday of the Congress – about a week later. Thus most of the Vietnamese population and all the fraternal delegates knew nothing of this. However, due to inevitable leaks, the world media knew about it long before. There is no doubt you read about the leadership change in the Sydney media days before we heard officially. What’s more, the only reason we heard unofficially a few days early was that we read it in the Bangkok Post (!!) which was available at the hotel where the foreign delegates were staying.

Communist delegates to a Communist Congress in Vietnam hear about decisions made by that Congress via the bourgeois media of a neighbouring anti-Communist country!

Western Media

While I don’t have access to everything being said in the West, what I have seen has been flagrantly contradictory regarding what happened at the Congress and their political assessment of the Congress.

Regarding the replacement of Phieu, Margo Cohen in the May 3 Far East Economic Review (FEER) wrote that “delegates were asked to fill out their ballots on April 16, three days before the congress formally opened. By then, the delegates already knew that Phieu had agreed to step down in the face of overwhelming opposition from the central committee.”

By contrast, Rajiv Chandrasekaran writing in the April 22 Washington Post (WP) claimed that “Phieu had wanted to serve another five-year term.” Moreover, the Post came up with an imaginary division among the leadership that corresponds to nothing heard around the traps: “Although the 17 other members of the Politburo initially supported him, the larger central committee took the unusual step of overruling the decision, according to political observers.”

Such alleged “political observers” also no doubt had a hand in the imagination of the April 20 Bangkok Post referred to above, which claimed that Phieu had launched “a western-style fightback” to keep his position.

On this issue, it seems that FEER was probably more spot on – Phieu may have earlier wanted to keep his position, but it seems he had been resigned to stepping down for some time. Moreover, the choice of Manh would have helped him decide – while some articles have called Manh a “cautious reformist”, most articles have generally agreed that he was precisely a compromise candidate, acceptable both to alleged “conservatives” like Phieu and alleged “reformers” or “liberals” like Prime Minister Phan Van Khai.

The Post’s allegation that the solid bloc of 17 Politburo members wanted to stick with Phieu is probably just out of this imaginary world of conservatives and liberals. As the Politburo is the highest body, consisting of the oldest people, it must be a “conservative” institution which would presumably back a fellow “conservative”.

Indeed, it is belied later in the same article, where it quotes Politburo member (until the Congress) Do Muoi telling reporters – two days before the public announcement of the change - that Phieu had made "mistakes in his work." In his eighties and a member of the elite three-person ‘Advisory Board’ which formerly sat on top even of the Politburo, Muoi would hardly have made such a candid statement to the international media if he had been a supporter of Phieu, especially considering that outright opponents never make public statements against each other even in the local media.

Muoi himself is generally seen as relatively conservative but with a pragmatic edge and able to straddle the two sides. Strongly associated with some of the ultraleft economic policies of the late 1970s, he then joined the group of older officials who gave rearguard but firm support to the “doi moi” economic reforms from the late 1980’s, and then began advocating a limited retreat to more socialist principles, while cautiously continuing market reform, around 1994.

The position of official “Advisers” – former Party leaders who are no too old but were kept in this special position to ‘advise’ the Politburo - was abolished at the Congress. Not surprisingly, western sources have welcomed the demise of a group of older veterans. According to Reuters (April 20), “Diplomats say the existence of the elderly party advisers has been an obstacle to Vietnam's reform process by restricting the freedom of action of the leadership trio,” the latter referring to the Party leader, Prime Minister and the President.

Yet again, neat patterns fall down. Aside from the moderate Muoi (Phieu’s predecessor as Party leader), the other two former advisers were former President Le Duc Anh, seen as a leading “conservative”, and former Prime Minister Vo Van Kiet, the economic arch-liberal par excellence. To complicate the picture further, it was none other than ‘conservative’ Phieu himself that pushed for the abolition of the ‘Advisor’ positions – and they who pushed to oust him. Even more interesting is the fact – widely known in Hanoi – that the “conservative” Phieu was in particular conflict with the “conservative” Le Duc Anh.

‘Conservatives’, ‘liberals’ and economic policy

Returning to this paradox later, just who are the alleged conservatives and liberals so dear to western media reports and what political views do they represent?

In western reports, these terms are used to refer to an imaginary world. On one side are supposed to be those who are economically ‘conservative’ (ie defend socialist ideas, stress preservation of relative egalitarianism despite market reforms, stress maintenance of the dominant role for the State in the economy), who are politically ‘conservative’ (anti-democratic), socially conservative (advocate ‘law and order’ responses to what in Vietnam are called “social evils”), still use the word ‘imperialism’, are old and more connected to the revolution, and are often of military background.

On the other are those who are economic ‘liberals’ (advocate greater liberalisation of the economy, and in the extreme barely differentiate their position from total bourgeois free market ideology), politically ‘liberal’ (in favour of greater democracy and openness), socially liberal in terms of progressive ways of dealing with social problems (drugs, prostitution etc), believe in the glories of 'globalisation’ and think anti-imperialist remarks will drive away investors, are young with less connection to the revolution, and are not connected to the military.

But the view gets even muddier when the problem of corruption comes into it. Western reporters do not like “corruption” (oddly enough, given the incredibly corrupt regimes they back in the capitalist Third World); therefore, throw “corrupt” in with the ‘conservatives’, because they are allegedly older officials who corruptly benefit from the uncertainties and unclarity of Vietnam’s half-way house between capitalism and socialism, and the schema is complete. ‘Liberals’, of course, want to clean up corruption via total elimination of any aspects of socialism – a ‘pure free market’ is supposedly immune to corruption.

As may be expected, this is a lot of unadulterated nonsense, though its neatness and simplicity may be useful if you are an aardvark.

According to the Post, “Phieu, who has only a grade-school education (note the snobbery), has been viewed as ineffectual by fellow party members, largely because he has been reluctant to push through aggressive economic reforms urged by younger officials … foreign business and political leaders have been disappointed that this nation of 79 million has not moved faster to inject free-market policies into its moribund economy, dashing hopes that it would become Asia's next economic force.”

So since Phieu didn’t see the sense of faster “free market reforms” to make Vietnam an “economic force” – like Thailand, Indonesia and the Philippines! – he is firmly placed among the “conservatives.”

Indeed, Phieu, who took over as Party chief in 1997 with the backing of a more and more vocal military faction in the Party, has continually stressed that the State aims to maintain its dominant position in the economy; that the socialist orientation must be maintained; that divisions between the rich and poor must not widen too much.

However, while advocates of wild capitalism obviously do not like such constraints, there is nothing in Phieu’s political record, or that of other current “conservatives”, to suggest opposition to the general ‘doi moi’ line of market reform and opening to the household, private capitalist and foreign invested sectors that have in fact been supported by a complete consensus of Party leaders since 1986-88. On the contrary, Phieu has continually spoken out to promote further private and foreign investment, and has not opposed further pro-market reforms like the Enterprise Law of 2000.

To transgress, it may have been the case that “conservative” opposition to these necessary changes back in the 1980’s by certain bureaucrats may indeed have been related to a layer of people who corruptly profited from the inefficiencies of the old bureaucratically centralised system of economic management, particularly from its disastrous pricing system (buying rice and other goods off peasants for way below market prices).

The fact that this system of economic management corresponded at the time to a rigidly undemocratic form of Party rule - both essentially a hangover from ‘war communism’ continued too long - may also explain why the initial push for “reform” in the mid-1980’s did conjuncturally feature a combination of pro-democracy political reform and pro-market economic reform, to break the bureaucratic logjam at the time. The onset of both ‘glasnost’ and ‘perestroika’ at the same moment in the former USSR was a similar development.

There was a large-scale democratic opening in the late 1980’s corresponding to the onset of the doi moi economic changes. However, they did not necessarily march hand in hand. On the contrary, economic opening to the market and to elements of capitalism suddenly raised new issues of who was getting their hands on new wealth and on land, of corrupt officials grabbing what they could while poor peasants and workers were battered.

The democratic opening allowed a wide range of forces to openly attack corruption, bureaucracy, dictatorial leaders, inequality and a host of other problems either born with or exacerbated by the market reforms. One newly assertive sector was the Party-led trade union movement, with its newspaper Lao Dong (Labor) playing a lead role in this process – which it still does today. And despite the usual characterisation of the army as a “conservative” factor, in fact the growing independent voice of the military and its newspaper Quan Doi Nhan Dan (People’s Army) played a similar role in denouncing corrupt bureaucrats out of touch with the suffering of the masses. Indeed, leading up to the 1986 Congress, the Army Party Organisation rejected three of the Party leadership’s top military candidates, most notably Nguyen Tien Dung, who was an appointee of the late Party General-Secretary Le Duan (died 1986) and an opponent of General Giap, because of his corruption.

The army’s activist “conservatism” thus has entirely different roots to the older inert bureaucratic conservatism. It tends towards the “economic conservative” side of the debate in as much as it is wedded to the socialist principles it shed so much blood to fight for, and has maintained more direct contact with the rural poor, the base of its decades-long resistance, than various haughty officials. Indeed, it conducts literacy classes and sets up health clinics in some of the remotest areas, including in ethnic minority areas. Furthermore, among its base of support in the countryside are hundreds of thousands of veterans, many of whom were economically savaged by the collapse of cooperatives and the ascendancy of the market – especially wounded veterans for whom the cooperatives provided some kind of basic social insurance. In denouncing inequalities and continually calling on the poor to stand up to corrupt officials profiting from the market openings at their expense, it is incorrect to class the army as politically ‘conservative’, but rather as a maverick participant in the democratic opening.

Following the collapse of East European Stalinism and the Tienanmin Square massacre in Beijing, the mainstream of Party leaders – whether economic “conservatives” or “liberals” – took fright and tightened the screws on open debate. Some Party members were even expelled or jailed at this time for being too outspoken in favour of democratic change. Notably, Party leader Nguyen Van Linh, the very leader of the ‘doi moi’ movement and long associated with the push for a more economically liberal approach – took the lead in politically clamping down at the time, finalising the split between economic and political liberalism (though his views were to undergo an interesting evolution several later, in opposite directions – towards grass roots democracy and against the extremes of economic liberalism).

Essentially what resulted was what may be called a certain ‘conservative-liberal consensus’ which ruled through the nineties, based on the idea that economic reform must be pushed ahead while the political system remain tightly controlled to ward off instability during the transition. The success of the ‘Chinese model’ and the collapse of the Soviet Union, allegedly for allowing too much democracy, were cited as the reasons for this policy. No doubt for honest reformers like Linh, this fear of the east European disaster was very genuine. And the army, while having played its own role in the opening, was also genuinely concerned, reflecting a militant anti-imperialism but also a paranoid ‘head in the sand’ view that imperialist interference rather than internal causes was primarily responsible for the collapse of eastern Europe, and so it also backed the crackdown, as did the Party Theoretical Institute.

However, for various corrupt officials, the crackdown on dissent meant increasing their ability to make corrupt profits without exposure, while for hard-nosed economic liberals, it meant strengthening their ability to promote legal profiteering at the expense of the masses without popular opposition. This combination of continuing rapid economic “market reform” with politically closing off discontent by workers, peasants and intellectuals had led to a situation by 1993-94 which posed grave threats to Vietnamese socialism. The crucial point is, how do you prevent unaccountable bureaucratic rulers from corruptly grabbing whatever wealth is on the offering during “market reform” unless they are under greater democratic control by the masses?

Many of the articles highly critical of the Vietnamese market reform process (ie John Pilger, Chossudowsky etc) were written at about this time, and quoted some of the catastrophically collapsing health and education indicators to back this up, including a resurgence of malnutrition and malaria and a drastic decline in primary school attendance and literacy rates. As the trust of the masses eroded, battles over land erupted in the countryside. It soon became obvious that this was no way to “save socialism”.

Military Flexes Muscles to Restrain Arch-Liberals

In mid-1994, the army newspaper vigorously attacked large-scale party “bureaucratism, authoritarianism and corruption”, which will lead the party to “eventually disintegrate, as experienced by parties in many countries.” Thus it was no longer just ‘foreign inspired elements’ but the Party’s errors that had led to, and may again lead to, the collapse of Communist parties. It was necessary “to restore the people’s trust in the party and state” before the situation “leads to the danger of losing the party’s leadership and the collapse of the regime.” Crackdown thus was not going to do this. Rather, “we must promote true democracy” as “the principles of democratic centralism have not been seriously and correctly implemented.”

This renewed attack by the army on bureaucratic officials coincided with its renewed attack on the dominant “pragmatism, commercialism and extreme individualism” which the market policy was introducing. The army declared that its mandate was not only to defend the country against foreign enemies but also against any attempt to “dilute the idealist goal of socialism.” In 1996, the army openly declared that the foreign forces trying to do this included the IMF, the World Bank and the Asia Development Bank.

Other voices also began attacking the corruption of the Doi Moi process, most notably, that of its founder, Nguyen Van Linh. The Party Theoretical Institute led by Nguyen Duc Binh, which had played an important role in the crackdown of 1990-91, now also changed tune, and began putting forward proposals for more grass roots democracy to remove the corrupt leaders their crackdown had helped entrench.

On the other extreme, the rise to power in the nineties of Vo Van Kiet represented the rise of an extreme ‘pragmatic’ wing which believed in classless ‘modernisation’, technology, global integration, ‘development’, free market forces etc etc – but had little interest in such old hat ‘ideological’ constraints such as Marxism. Moreover, Kiet was perfect for the times – an autocratic economic liberal who made no pretence about being interested in democratic political reform. Becoming Prime Minister in 1992, he took the post which was gathering strength as the alternative pole of power to that of the Party General-Secretary. (The third position in the ruling ‘troika’, that of national President, is largely ceremonial).

Between the growing protests by workers and peasants and the new assertiveness of the army on the one hand, and the rise of a naked economic ‘pragmatism’ with its crushing effect on the poor on the other, the party centrist leadership under Do Muoi in 1993 began to modify its course. At the Fourth Plenum that year, the leadership noted that health and education had deteriorated and culture had become commercialised and decided it was time to reverse these trends. Do Muoi stated that the first priority of economic development must be accorded to human beings and not just to increases of GDP ‘as in the past’ – revealing how ‘pragmatic’ had become in its thinking.

No doubt this new assertion of socialist principles is what has guided the Party to actively turn around the mess the country was in at the time, by reinforcing a socialist political commitment to redistributing some of the new wealth being created by the market reforms to poverty alleviation, health and education. This had resulted in some great successes by late in the decade, including:

§ By 2000, child malnutrition had been cut to 33 per cent, down from 53 per cent (!) in 1995
§ Polio and neo-natal tetanus have been eradicated, and malaria brought under relative control, at least as far as fatalities go
§ 96 per cent of Vietnamese children are now vaccinated against 7 major infectious diseases, higher than anywhere in the region outside China and Japan
§ The decline of primary education has been reversed, and Vietnam now boasts a literacy rate of 94 per cent
§ Infant mortality has been reduced to 29 per 1000, and 25 per thousand in urban areas
§ Life expectancy has risen to 68 years
§ Maternal mortality is down to 100 per 100,000 – half that of Thailand and the Philippines and a quarter that of Indonesia
§ According to the UN, between 1993 and 1998, “the rate of poverty has registered one of the sharpest declines of any developing country on record, falling from a high 58 per cent in 1993 to around 37 per cent in 1998 according to the World Bank’s poverty measure.”

It is interesting that the second half of the nineties, despite the dramatic improvement of the living conditions of the poor, is generally seen in western commentary as a partial revival of the power of the “conservatives.”

Sharp differences preceded the 1996 Congress, when Kiet put out a secret policy document to the Politburo essentially calling for the abolition of socialism. He called for the scrapping of the dominant position for state enterprises in the key sectors – one of the few things the Party holds onto in its battle to resist outright capitalism. He also called for the scrapping of Marxism and its replacement by Vietnamese nationalism as official ideology.

He advocated building a “legal” state allegedly to curb the excesses of Party rule, but in reality this simply meant the transfer of more power into the hands of unelected bureaucrats in the state apparatus who were “experts” in market economics and the like. It is interesting that this bureaucratic state apparatus has in fact grown year after year since then, despite the rhetoric about reducing top-heavy bureaucracy. Moreover, the legal state had little to do with protecting democratic rights – already from 1992 the party had resolved to build “a state based on law” to protect citizens’ rights and had strengthened the position of the National Assembly. Rather, the new proposals only concerned stronger protection of economic ‘rights’, ie protection of bourgeois property. In practice what it meant was that economic “laws” should rule supreme, without the “interference” of any social goals insisted on by the Party.

The IMF and World Bank openly intervened by telling the Party that if Kiet’s proposals won the day, hundreds of millions of dollars for ‘structural adjustment’ but also for other needed development would come through; if Kiet lost, Vietnam wouldn’t get the money. A blatant interference into the Party Congress. Kiet, for his part, openly and shamelesly pushed his alliance with these organisations to boost his chances of success.

Following these sharp differences at the Congress, a new compromise collective leadership emerged, the traditional way of doing things in Vietnam. While western commentators decry this ‘consensual’ way of doing things which allegedly holds up important decisions, it is happily vastly different from the way of dealing with differences in Stalin’s USSR, Mao’s China etc – purge and kill your opponents. Kiet the “liberal” tried his lesser version of this, framing up leading anti-market Politburo member Nguyen Ha Phan and getting him expelled, and jailing two members who had released his “secret” letter to the Politburo, while Vu Oanh, who had little to say on economic policy but had advocated a true grass roots democratisation of the Party, was thrown off both the Politburo and Central Committee. However, this wasn’t enough – the consensus outcome meant the IMF and World Bank blocked their funds as promised (although the WB has continued to provide other development loans).

New Post-1997 Leadership

The new troika emerging in 1997 consisted of General Le Kha Phieu as Party chief, representing the army’s particular maverick “conservatism”, Phan Van Khai as Kiet’s replacement as Prime Minister and arch-advocate of economic liberalism without ideological “baggage”, and Tran Duc Luong as non-aligned President. The outgoing Party chief, Prime Minister and President – Do Muoi, Kiet and Le Duc Anh – then became the ‘Advisors’.

Despite the continuous western media analysis of the late 1990’s being a period of ‘conservative comeback’, ‘slowing of the process of reform’ and ‘economic downturn’, things widely believed among the layer of professional middle class liberals, in fact in the last few years this leadership has brought about an impressive number of changes and advances, including democratic political changes, further economic opening and the important social advances listed above.

The alleged ‘economic downturn’ in fact has everything to do with the Asian economic meltdown from 1997 and absolutely nothing to do with a ‘resurgence’ of economic conservatism. Most foreign investors are from Asia – the economies that were battered. So there was a downturn, yet what is rarely mentioned is that Vietnam escaped the worst of it, putting on by far the best performance in Asean the next few years, because it luckily had not proceeded as fast as the liberals had wanted in setting up a stock exchange and demolishing state industry.

On the face of it, the troika worked together smoothly enough to bring about these changes. However, it was widely known that beneath the surface, there was a fairly sharp struggle going on between Le Kha Phieu the ‘conservative’ and Phan Van Khai the ‘liberal’. The alleged ‘slowness of reform’ was said to be due to the power of the former blocking the latter.

Yet an examination of the positions of the two further throws into the dustbin usual conservative-liberal stereotypes. Khai took over from Kiet as both prime minister and head of the faction pushing for greater ‘economic reform’. It would therefore seem reasonable to attribute the economic changes more to his initiative. However, I have not seen a single indication that Phieu acted to block these changes. On the contrary, whenever Phieu has spoken about economic issues it has been fully in support of the economic changes, fully in support of greater foreign investment, of promoting local private business, of ‘equitising’ a portion of the State Owned Enterprises (SOE’s).

However, what made him a ‘conservative’ on these issues was that, while saying these things, he also continued to stress the long-term socialist orientation, the need for the State and cooperative sectors to maintain their dominant position alongside private capital and his furious opposition to Communist Party members getting their hands dirty with capitalist wealth. On such issues, Khai, by contrast, rarely had much to say. That’s not to say that Khai isn’t also a socialist; perhaps he simply believes that as promoting private and foreign capital is the central task of the day, talking about socialism is temporarily irrelevant or might even scare off investors.

The economic changes include the following:

· the new Enterprise Law of January 2000, vastly simplifying the procedures for setting up a private business, which had been previously weighed down by too much red tape, needing approval from too many different bodies with overlapping responsibilities, leading to considerable opportunities for official corruption. Following the Enterprise Law, 14,000 new businesses were established in 2000, fully one third the total number established during the whole of the 1990’s.
· amendments to the Foreign Investment Law in August 2000, which among other things allowed Joint Ventures (JV’s) to convert to 100 per cent Foreign Invested Enterprises (FIE’s). Foreign investment was up by at least one third in the first quarter of 2001 compared to the same period last year, which may be related to the amendments as well as other factors.
· A dramatic increase in the rate of ‘equitisation’ of SOE’s, with some 5 per cent of 5800 SOE’s (mostly small, provincial and debt-ridden) equitised in the last few years compared to about a total of 10 throughout 1992-97.
· The deregulation of electricity prices and timed local telephone calls – with appalling effects on the poor.
· The setting up of the first Stock Exchange, in Ho Chi Minh City, in mid-2000.
· The Bilateral Trade Agreement with the US last year, in which Vietnam accepted drastic drops to protection in line with requirements for WTO accession.

It’s funny how all this represents ‘slowing down of the reform process’, but of course imperialism wants everything at once.

But while Khai has continually pushed such economic changes, the record seems to show that he has had little to say on democratic reform. On the contrary, it has been none other than the ‘military conservative’ Le Kha Phieu who has continually called on the grass roots of the Party to supervise, expose and denounce leaders who are corrupt and authoritarian. Therefore, the democratic measures have tended to be more his initiative, although another series of measures related to the National Assembly were very much at the initiative of the National Assembly Chairman, Nong Duc Manh, the new Party leader after the 2001 Congress. Manh was not allied to either group and has had little to say on economic issues.

This does not mean there is any reason to believe that Khai opposed these measures, just that he wasn't interested. This in fact is quite logical – just as Nguyen Van Linh temporarily retreated to autocratic economic liberalism in 1990 and Vo Van Kiet was the supreme example of it throughout the 1990’s, ‘economic reformers’ are more interested in ‘stability’ for the market than democracy.

On the other hand, why would alleged ‘conservatives’ push more grass roots democracy and call on the rank and file to speak out against corrupt leaders? The problem again is confusing whether someone is primarily an economic or political ‘conservative.’ It seems to have come to the point where a faction of honest economic conservatives who really still believed in some kind of socialism saw that it was precisely the battered people who they had to turn to in order to stem the greatest threat to socialism – party leaders and officials using the market reforms to put large amounts of national wealth in their pockets.

The democratic measures over the last few years include:

· The “Grassroots Democracy Degree” of February 1998, mandating increased consultation between local officials and residents, any attempt to raise funds for local projects requires a majority vote of those affected; to supervise development projects such as roads and irrigation works, and double-check accounting, each ward now appoints four or five villagers, who are not necessarily party members.
· It also mandates increased consultation between employers and managers at SOE’s; employees must be informed about company business plans and the distribution of yearly profits
· In March 1998, there were three new anti-corruption laws, including one that bans family members of the head or deputy of an SOE from buying shares in any companies operating in a field related to the SOE’s business, and from being appointed to positions within the SOE
· Claiming that corruption and other “degenerate” ethics of a large number of party members put “our regime, our independence and our nation at stake”, in February 1999 Phieu launched the “Movement for Party Building and Rectification”, based on a call on every Party branch in the country to meet to engage in self-criticism, and for the Party rank and file to boldly criticise leaders and officials who are corrupt or authoritarian.
· Apart from rank and file members, non-members will also be able to engage in this criticism campaign, including setting up letter boxes for people’s complaints
· In late 1999, local authorities delivered a pamphlet to every house in the country setting out the basic legal guarantees of democracy. This includes local authorities obligations to reveal their budgets and popular participation in the decision-making process. People’s Committees must set aside certain times to hear complaints.
· Party leaders were required to declare their assets and all sources of income
· The further empowering of the National Assembly, presided over by Manh, with all sessions, including fierce debates among party members, televised to the public. Even U.S. ambassador Douglas Peterson admitted that Manh “took it from being a rather ineffective body to one with increasing prestige and the ability to really evaluate governmental actions and goals.”
· The public release of the draft Political Resolution, with Party members around the country discussing it and amending it for months, and the public (members or non-members) around the country also sending in comments and amendments, which were daily printed in newspapers and televised, resulting in a large number of amendments.

What have been the results of the grassroots democracy and party rectification campaigns? Many have pointed out that success has been limited, because, faced with decades of a certain political culture – which goes way back before the rise of the Communist Party – many fear openly denouncing corrupt leaders. Furthermore, others have noted that corrupt leaders may in fact use this to their own benefit to wrongly denounce others. Leaders links to local police units may indeed make this process difficult in many places. Yet these reservations don’t seem adequate to say it all a failure or a farce – these same problems would occur in the initial stages of any opening up, and it is only by further pushing the culture that it is correct and legal to criticise leaders, as well as reforming the legal system to cope with false allegations, that this problems can eventually be reduced.

In fact, the campaign against corruption has scored major successes, although leaders at the Congress openly admitted that there was still a very big job ahead. However, this modesty about their achievements and shortcomings was turned by cynical journalists at Reuters into a “failure”: according to a Reuters dispatch during the Congress, “a news conference at the congress on Friday afternoon highlighted the failure of an anti-corruption drive launched two years ago on which Phieu had staked his reputation. Senior central committee official Pham Van Tho said the party had expelled nearly 3,000 members and disciplined more than 16,000 others, including senior officials, in the period to clean up graft and mismanagement.”

Of course, Reuters doesn’t tell us which other Asian ruling parties expel thousands of members for corruption and continue to call on their rank and file to make such denunciations.

At a conference to review the process in March 2000, it was announced that 70 per cent of the 18,000 denunciations of Party members received in the previous two years had been genuine. But aside from these denunciations, many others had been caught out from above for corruption – official statistics claim 60,000 members had been punished in three years, mainly for corruption (Vietnam Economic Times, February 2000).

What is even more interesting is to look at the origins of the campaign, and at some of the cases exposed.

Peasant Uprising 1997

In May 1997, a mass uprising of the peasantry in northern Red River Delta province of Thai Binh province occurred. While there had been many outbreaks throughout the country since the late 1980’s, mainly over corrupt provincial and district ‘taxes’ and over corrupt land allocation, there had been nothing this massive. Local government offices were attacked in some 128 villages; some officials were killed by peasant mobs. Peasants refused to pay any more taxes. This revolt changed the face of modern Vietnamese politics.

The government’s initial response was to impose a media blackout while investigating. Many have claimed that the rise of Le Kha Phieu as Party chief later that year was due to the stepped up ‘security’ atmosphere in reaction to this uprising. The implication was that a strong military hand was necessary to restore ‘stability’ in the country. Yet the reality was completely different.

Instead of moving in a crush the uprising, the ‘conservative’ military began acting in a way most unlike political conservatives. Statements from the new Party leadership more and more identified with the demands of the peasants! “They (the peasants) just couldn’t bear the corruption any longer”, according to Dao Duy Quat, deputy head of the Central Committee for Ideology and Culture and a key “conservative” ally of Phieu. Blame was put squarely on corrupt officials. Estimates range between an unprecedented 800 and 1800 officials who were sacked, demoted or disciplined in the province.

Furthermore, rather than trying to forget the whole episode, Party leaders and media have since continually referred to the Thai Binh events when discussing their grass-roots anti-corruption campaign. The “hard-line military conservatives” essentially identified with the uprising.

Many other peasant protests have erupted since then. In March 1999, a tax strike began in Giao Thuy District in Nam Dinh province, next door to Thai Binh, and has continued to the present. The government of one Commune was thrown out, but even there the strike has continued, as peasants demand to know what happened to tax money unaccounted for. As a result of their protest, taxes have been lowered, but they still demand justice.

They have taken their protests to the national parliament in Hanoi, where peasants from different parts of the country now regularly gather and sleep out in protest, as they also do in Ho Chi Minh City. According to Tuan, a French Vietnamese Trotskyist who regularly returns to the country, “At the office of the National Assembly (in HCMC), for one year now the pavement opposite has been occupied by 200 people who are there permanently, night and day. They have constructed a forest of placards and banners, which say “Long live president Ho Chi Minh!” and “Long live the Vietnamese Communist Party!” but also carry complaints against the behavior of the bureaucrats of this or that village and demand justice … the government is disarmed for these are the families of heroes of the fight for Independence and the use of brutal methods would be seen very badly by the people.”

The last point is quite important – many protesting peasants are precisely veterans of the revolution. I have likewise been told that the Thai Binh uprising was led by veterans. Small wonder the “conservative” Vietnamese army, whose revolution was based on the peasantry, not only does not crush the protests but may to some extent sympathise with them.

One group from the Mekong Delta, from the impoverished border province of Dong Thap, last year took their protest all the way to Hanoi, with a small demonstration outside the National Assembly. A couple of months later, the Party chief of that province was up on corruption charges.

By contrast, it is interesting to note the report by a friend of mine, a leftist western researcher who is anything other than sympathetic to the military. He noted that in the northern mountain province of Tuyen Quang, there was a relative absence of corruption, that the atmosphere appeared incredibly clean and egalitarian. But he also noted that it was a leading stronghold of the army.

Corrupt ‘Liberals’ Exposed

It is interesting to note who have been major victims of the anti-corruption drive. The idea that corruption is rife among “conservatives” who profit from the loopholes in an unclear half-socialist, half-capitalist situation, while economic liberals are honest people who clear up such loopholes by making everything better for legal capitalism, has been proven a joke.

Some gigantic corruption scandals have been busted, most notably bank fraud which enabled two private capitalist companies, Minh Phung and Epco, to steal $US280 million, and the Tan Truong san smuggling racket, worth $US385 million. The combined losses were more than those caused by the devastating floods in central Vietnam in 1999. Two banking officials were put to death and almost 100 state officials, including 49 Party members, were imprisoned. It is notable that, with western and liberal fire normally directed against corruption in SOE’s, the fact that the country’s biggest corruption scandals involved private companies was a wake up call.

Some of the biggest scandals involve the privatisation of housing in the 1990’s, when officials grabbed a lot of the best real estate. But this issue became even more complex. In early 1999, Deputy Prime Minister Ngo Xuan Loc, a key ally of economic liberal leader Prime Minister Khai, signed a deal allowing a private company to build a water park entertainment complex on Hanoi’s West Lake worth $14 million – even though the investor only had $10 in the bank! The Hanoi People’s Committee headed by Hoang Van Nghien, the Ministry of Planning and Investment headed by Tran Xuan Gia and another Deputy Prime Minister Nguyen Cong Tan – all three likewise key ‘liberal’ allies of Khai - also signed documents approving finance for the investor.

However, as soon as the investor got the go ahead, he put the land on the market for housing – at many times the price the former owners had been paid! Unofficial sources claim 60 officials had been bribed to give the go ahead. When the case was busted following protests by cheated former home owners, Loc was sacked, while Gia and Nghien were merely “reprimanded.”

In a somewhat ridiculous but revealing article in the Far East Economic Review in May 2000, Nayan Chanda claimed that this “anti-corruption charade” was merely “a way to clip the wings of reformers, including their superior, Prime Minister Phan Van Khai … who has been a prime target of conservatives surounding Le Kha Phieu.” He continues that “Khai, frustrated by the removal, sacking and jailing of close associates (his principal aide, Nguyen Thai Nguyen, has been detained since last December) tendered his resignation in March,” which he later withdrew.

Chanda of course cannot openly deny that all these “reformists” who have been reprimanded, sacked or jailed were corrupt – what does he think should happen to people involved in such a brazen case of land theft and profiteering? It is just that western liberals cannot get their heads around the idea that it is precisely the free-marketeering ‘liberal’ mob, rather than the ‘conservatives’, who head Vietnam’s state of corruption – having no socialist ‘ideological baggage’ to restrain their naked and revolting pursuit of cash.

Indeed, Chanda notes that the reprimands were mild, and that moreover, Loc was reinstated in another position several months later by Khai – as government commissioner in charge of industry, construction, transport and communications. “Clipping the wings of the reformists” doesn’t stop them reinstating corrupt ministers, apparently. Notably, Loc had already been implicated in a 1995 scandal involving the hoarding of cement by state companies, leading to a price war, when he was Minister of Construction. That didn’t stop Khai appointing him as Deputy Prime Minister in 1997. The poor old liberals were not powerless in the face of ‘conservative revival.’

Then in late 2000, allegations of embezzlement and mismanagement of funds targeted for ethnic minorities hit the Committee for Ethnic Minorities and Mountainous Areas Affairs (CEMMA) came to the for, fueled by an increasing aggressive Vietnamese media, most notably Dai Doan Ket (Graet Solidarity) which deals with minority issues. Few westerners would be aware of the outright irreverance and activism of sections of the Vietnamese press. The State Inspectorate launched a probe. There were hard questions at the national assembly, which as is now normal, were televised. CEMMA Chairman Hoang Duc Nghi was called before the legislature on November 30. The Communist Youth newspaper Thanh Nien claimed “Nghi's answers were unsatisfactory, unresponsive, and did not acknowledge errors.” And who is Nghi? According to FEER, “he is known to have been close to Prime Minister Phan Van Khai since their student days in Russia.” By now, hardly a surprise.

In Lai Chau province in north west Vietnam, “the first 13 indictments are already stirring hope” claims FEER. “In general, people here are very happy with the decision to prosecute,” it quotes a member of the Farmers' Union in Muong Te district. “We felt very furious but didn't dare to speak out.” One bit of evidence: a contractor's notebook, listing bribes handed over to no fewer than 117 officials.

Yes, as noted above, Phieu’s campaign to call on people to speak out has the problem that many are scared to – scared, in this case at least, of ‘liberals’ like Nghi with their corrupt official connections rather than of Phieu’s dreaded ‘hard-liners.’

What then of the godfather of the liberals, Vo Van Kiet? Perhaps an autocrat, but surely the West’s number one man, the man they pushed for with huge bucks in 1996, couldn’t be corrupt. After all, there is nothing that concerns the IMF, WB, foreign investors etc more than corruption, right? Kiet, in fact, is probably the most corrupt person in the country.

Kiet’s wife was feared throughout the nineties – it is widely known in Hanoi circles. People I know personally swear that when doing military service on the borders, large consignments of goods were continually allowed through because they were approved by ‘Madame Kiet’. Smuggling being a number one cause of theft of national income.

Furthermore, I have more direct personal experience. Some semi-relatives of mine who had an export company in the early 1990’s were exporting a kind of timber that Kiet suddenly banned on environmental grounds (at other times, Kiet the God of ‘large-scale’ development had few environmental scruples). The problem was, as a sudden announcement, exporters had had no time to prepare, and asked that they be allowed to fulfil their current contracts. They went to see Madame Kiet on this issue and gave her $US17,000, a huge sum a decade ago, as you do in such cases in Vietnam. She took the money – and continued to ban them fulfilling their contracts. The issue obviously is not whether or not they should be allowed to fulfil their contracts (probably that only applied to exporters close to the ruling family), but whether the wife of a Prime Minister should be such a thief. Another relative gave madame Kiet $US7000 back then to approve them publishing a new encyclopedia. She took the cash and gave no such permission. I’ve only been here a little over a year. Altogether, what others know must add up to untold millions.

‘Advisors’

Which brings us to Phieu’s campaign to scrap the top-heavy ‘advisors’ and their campaign to oust him. Of course, given that Kiet was one of the three advisors, it is quite logical that he had a conflict with ‘conservative’ Phieu. So what of centrist Do Muoi and conservative Le Duc Anh?

Of course, not everyone called a ‘conservative’ believes in the same things or has the same motives. There may indeed be those who are truer to the image of political conservatives, who would have preferred a greater crackdown on ‘instability’ rather than essentially identifying with it. It is the irony of ironies that, in weeks leading up to the Congress when the campaign against Phieu as being openly discussed, one rumour had it that Phieu had ‘created’ instability in the country, leading to revolts like in Thai Binh and the revolt in the Central Highlands this year, by calling on the grass roots to denounce corrupt leaders! An odd thing for a conservative to be accused of. Of course, this is far too flattering a picture of someone who essentially was honest but with few ideas, and who simply had to react when the Thai Binh events broke out quite independently of him.

Likewise, there may well also be those masquerading as ‘conservatives’ who simply oppose changes because they corruptly profit from present ambiguities in the system. While it would be highly schematic to try to slot either Do Muoi ot le Duc Anh into these categories, it should be noted that both have skeletons in their closets similar to Kiet’s – Do Muoi’s wife is apparently big in the gemstone rackets and Le Duc Anh’s son owns a massive new nightclub in Hanoi where crooked dealing led to a murder last year.

One of Phieu’s most serious mistakes which sealed his fate was that several months before the Congress he set up a secret spy ring – to spy on other Party leaders. According to FEER, “When the central committee met for a March plenum, each member, for the first time, was handed dossiers detailing the personal “errors” they and their colleagues had made, as reported by colleagues and neighbours. Errors included indulgent displays of wealth, such as expensive cars and houses – and improper personal relationships,” and improper business dealings involving family members, we can add.

Now there is no question that Phieu’s way of doing things was grotesque and harked back to darker days. Certainly any leaders receiving a ‘clean bill of health’ would still have been offended that this guy had taken it upon himself to spy on them. Nevertheless, for lots of corrupt liberals and corrupt conservatives, including those who were ‘advisors’, their outrage is hypocritical at best.

Whatever one thinks of Phieu’s methods, I have not heard anyone – including the Australian ambassador Michael Mann, who had a particularly disparaging view of Phieu – who denied that Phieu was essentially honest and serious about rooting out corruption, including of those around him. Even the solidly anti-communist FEER article grudgingly found some support: “While such disclosures could have inflicted enduring damage on mutual trust between members of the central committee, ‘it had to be done,’ sighs one high-ranking party member. ‘These matters were getting increasingly sensitive.’ ”

Can Manh Hold the Leash on the Rampaging Liberals?

As noted, the new party chief Nong Duc Manh was chosen as a compromise candidate who did not belong to any faction. He is widely known to be an honest and dedicated communist, and is highly regarded among Vietnamese for his activism in democratising the workings of the National Assembly. Far from having any particular conflict with Phieu, it seems when he finally accepted the post (he had earlier turned down the offer), Phieu felt easier about stepping down.

As such, western and liberal political circles have had some difficulty summing him up, expressing reservations, but then trying to claim him as their own due to his popularity. According to the Washington Post, “Political analysts and diplomats say they do not expect Manh, a forestry engineer by training, to move radically away from a socialist economy or the restriction of civil liberties, but they express confidence that his track record as chairman of the National Assembly will help him push liberalizing policies through an ossified bureaucracy.”

Similarly, FEER claimed “Manh is no flaming reformist. Yet some Vietnamese express cautious optimism about the 60-year-old Russian-trained forestry engineer, who entered the National Assembly in 1992 and kept the peace among rival factions … The leadership changes also sparked hope within the foreign business community, although Manh has not yet expressed any strong views on economic reform. “Now that they've got younger and better-educated leadership, it looks like they will be going in the right direction, in terms of integrating with the global economy and modernizing the Vietnamese system. It's definitely a positive signal,” says Fred Burke, an attorney at U.S. law firm Baker & McKenzie in Ho Chi Minh City.”

Manh has added to such ambiguity by continuing to toast all sides of the debate. One of his first visits was to talk to business leaders and foreign investors in their heartland, Ho Chi Minh City, strongly encouraging further investment and promising further administrative reform. A few days later he would be toasting the army’s great role in the liberation wars or stressing that the Party must step up “ideological work” – music to the ears of the ‘conservative’ Party Theoretical Institute, anathema to liberal pragmatists.

Meanwhile, deliberations within the National Assembly, which Manh temporarily still heads, show that he may be in for a rough ride now that the liberal faction feels more confident with the demise of Phieu and the army and its backers are temporarily demoralised. Whatever Phieu’s problems, he had a power base that could at least balance Khai’s equally formidable one. Manh is essentially a good guy – but without a similar power base.

At the NA session on May 31, debate got extremely heated in debate over the amendments to the land law, pushed by the economic liberal faction. This concerned a new set of land prices on which to base compensation claims when land has to be acquired for construction projects. The gap between the top and bottom prices had been widened considerably, yet there were no guidelines for delineating between them. Furthermore, each province and district was given increased powers to determine these issues and other land allocation issues. Given that semi-independent province and district bureaucracies often rule with corrupt connections to local private bosses and ‘locally-controlled’ SOE’s, and have often been a hotbed of corruption and authoritarianism, the amendments were seen by many as an attempt to legalise corrupt land practices.

As debate was so heated, Nong Duc Manh took the floor and suggested that more information was needed about various issues and details that had been raised, and so recommended the amendments not be voted on at this stage. However, the deputy chairman of the NA, apparently a Khai supporter, rose and said that the Prime Minister must be heard. Khai got up and told delegates that nothing is ever ‘perfect’, so they should stop dithering and just pass the amendments, and discuss details later – ie, do what I want without discussion first, discuss it when its too late! As the amendments were passed, we saw the first example of how Manh looks like being rolled by an unleashed liberal faction.

The ‘modernisers’ have also lately been active in pushing to ‘clean up the streets’. This means clearing poor street vendors off footpaths; banning impoverished peasant women from riding their bicycles in from the countryside (unless before 7 am) if they are carrying large loads (which is the produce they try to sell, and which are confiscated along with their bicycles); banning cyclos, whose drivers are also mostly from the countryside and often war veterans, from large numbers of streets (they are an ‘old’ form of transport embarrassing to ‘modern’ Vietnam, and they and the bicycles allegedly cause ‘traffic jams’, not apparently the thousands of motorbikes and cars you usually see in such traffic jams). This push is coming from the Hanoi People’s Committee, which more and more represents the Hanoi business community and is controlled by modernising liberals.

In another NA debate in early June, Manh again attempted to stem aggressive calls to ‘clean up the streets’, countering that “In reality, we know that we cannot clean up the streets at the moment, because people are selling there because they are poor.” It remains to be seen how long such old-fashioned statements about concern for the poor will get a hearing.

In reference to these issues, a note about the police. If it were scientifically possible to describe the army as an element of some kind of workers’ state and the police as an arm of a rising bourgeois state, I would. However, without trying to get into theoretical confusion, it is hardly surprising that Vietnamese tend to be proud of their army but hate the cops. Seeing a huge locked cage full of confiscated bicycles and large baskets for goods, formerly belonging to the poorest sector of Vietnamese society, their very means of subsistence, outside a cop shop, should bring fire to the head of any communist.

Which faction controls them? I wouldn’t pretend to know. But an interesting anecdote. In 1996, armed clashes erupted between villagers outside Hanoi and the police over miserably low compensation packages offered them when their land was turned over to the Korean giant Daewoo to build a bloody golf course. In one clash, village children marched in the front line of defence carrying pictures of Ho Chi Minh, believing this was too sacred to be attacked. Cops smashed the pictures and told them “This isn’t Ho Chi Minh’s time any more, it’s Vo Van Kiet’s time now.” As repressive forces batter peasants to defend a marauding multi-national, what could be more symbolic than their open identification with Vietnam’s leading ‘liberal’?

It could also be noted that Nguyen Tan Dung, one of Khai’s two hard-line liberal deputies (the other being Nguyen Cong Tan, the undisciplined signer in the water park scandal), was fomerly deputy of the Interior Ministry and its key representative on the Politburo. That may seem odd to those who think repressive Interior ministries are inevitably connected to the army and to ‘conservatives’. In fact, in pre-Doi Moi days, the Interior Ministry was very much under the control of the leading Stalinist faction around Party General Secretary Le Duan (the Vietnamese Escalante), who often used it against forces in the army around General Giap – one of the most upstanding and intelligent of all Vietnamese revolutionaries. Despite the prestige of the army and of Giap in particular, they were often no match for internal security. It would appear internal security is now largely in the hands of Kiet’s beefed up bureaucratic machine.

Vietnam’s Economic Direction

Regarding current policy debates, it is notable that this Nguyen Tan Dung, along with Khai himself, has been among the most outspoken in recent years pushing for the full privatisation of agricultural land, in concert with the World Bank and ADB. The fact that this would result in increased land concentration and landlessness not only does not concern them, in fact they see it as positive – ‘large farms’ which employ agricultural labour are necessary because they provide ‘economies of scale’ (of course a return to genuine cooperatives for ‘economies of scale’ would be out of the question – too many of their mates stand to gain from large farms). According to Dung, “Land accumulation is a process which is part of the development of agriculture … and in line with the government’s industrialisation and modernisation drive.” Reacting to criticism that this was the kind of farming model the Party shed blood for decades to get rid of, he could only respond: “The farmland owners of Vietnam today are much different from the landlords of the past … we are making money for ourselves and for the wealth of society..” rather than for foreign rulers.

As these proposals came under considerable attack, voices were lowered about full privatisation, but last year Khai did legislate to further encourage ‘large farms.’ Happily, privatisation did not touch any Congress resolution, but now the liberals have been unleashed, it remains to be seen how long they will hold back.

On more general issues of privatisation and economic policy, FEER noted that “The congress itself failed to send any clear signals on economic policy. The party stuck to a broad platform that assigned a vague “leading role” to the state sector, but also encouraged the growth of the private sector and foreign investment. The advantage of ambiguity is that the broad platform does not commit Vietnam to a detailed plan to pump up the state sector at the expense of the private sector. Manh and his revamped team will need this flexibility to comply with the conditions of a new, $368 million IMF loan designed to speed up reforms in state banks and state firms.”

Yet while the platform indeed does not “commit” the government to pumping up the state sector, the day after the Congress, the government announced another VND28 billion will be pumped into the electricity, coal, steel, electronics and information technology industries this year.

Still, the ambiguity does mean that whoever is ascendant will interpret it in their own way. Nevertheless, it is not quite as ambiguous as FEER claims: “Establishing state-owned coroporations strong enough to be core players in large economic groups in petroleum, electricity, coal mining, airline, railways, maritime transport, telecommunications, mechanical engineering, construction materials and other essential products, fertilisers, banking, insurance and auditing.” Furthermore, there is a large constituency in the Party which will not allow any radical sell-off of SOE’s. Rather, the liberals will probably push harder on the partial share ‘equitisation’ of those SOE’s “in which the State does not need to own 100 per cent”, something in any case not opposed by conservatives as long as the State maintains the dominant share.

The IMF and World Bank are mainly pushing at the opening they see where the Political Resolution explicitly states for the first time that there will be no favourable credit or subsidy policies for SOE’s over private business. They are pushing the view that this is ultimately in contradiction with the above quote from the Party’s Socio-Economic development Strategy document. A new ‘Competition Law’ has been passed in this spirit, but the IMF/WB have already complained it is not all they expected, because it still allows the state to make all kinds of exceptions with what they regard to be key sectors.

Unfortunately, the simple need for investment capital will always sway the argument in the liberals’ and IMF/WB’s favour. However, while some ‘equitisation’ may be necessary from this financial point of view (and certainly joint ventures where the State keeps 51 per cent), it is notable that the entire argument has been bought that equitisation is also necessary to ‘reform the management structure’ of the SOE’s.

Now, the bureaucratically-run SOE’s certainly are in need of a drastic reform of their management structures – as it is they are a hotbed of official corruption and embezzlement of funds and de facto privatisation, which, if allowed to continue, will destroy Vietnamese socialism just a surely as the IMF/WB/liberal faction happily would. Besides the economic liberal faction and the military backed ‘conservative’ group and various other tendencies honest cautious reformers and more democratically oriented honest socialists, we may also speak of a “corrupt” faction entrenched in certain SOE’s and in particular in provincial administrations, entrenched precisely by the Doi Moi process which offered them decentralisation without democratisation.

Yet it seems only people buying equity in SOE’s can ‘reform’ management – despite various pronouncements, the idea of thoroughly democratising them via real workers’ control and democratic, open community management is simply unheard of.

And this fact points to the military’s political limitations. While Phieu’s group should be supported for their bold attempt to call on the party ranks against corrupt bureaucrats, this has not been extended to such open forms of radical work-place democracy. Furthermore, the military’s attempts to reform the Party in a quasi-democratic direction become a victim of the military’s other obsessions. Historically the creature of anti-imperialist struggle, it is still difficult for many of its leaders to really appreciate that more democratic openness in general, not just within the Party, particularly real debate in the media, is necessary to really polemicise against the liberal agenda. Rather, the fear remains imperialist subversion and ‘peaceful evolution’, as they call it, via further democratic opening. This is very short-sighted, because the young professional set, Vietnam’s future leaders, therefore believe whatever information they now easily get hold of on the CNN or the Internet. The ‘spy-ring’ approach to tackling corruption was a further symptom of this political weakness.

At the same time, it is wrong to blame the military and Phieu’s group for this continuing state of opaqueness as many do. On the contrary, this was already the state before 1997 and I have seen no evidence whatsoever of the liberal faction pushing for any democratic openness – including now that they are ascendant.

Uprising in Central Highlands

Finally, a note on the uprising earlier this year in the Central Highlands by ethnic minority people. Briefly, this was essentially about a long-term process of land acquisition from minority people by both state enterprises and private ‘large farm’ capitalists to grow cash crop plantations of coffee and rubber. These private bosses and ‘locally-run’ SOE’s are also corruptly connected to provincial and district bureaucracies which tend to run their own fiefdoms, whatever the party or NA in Hanoi says. It is also related to the entire position of the central Highlands in Vietnam, its odd position as a region which fought against the Saigon regime and the Americans but not under the NLF, but rather under their own umbrella organisations. Their independence also made the Party suspicious of them and there is a heavy security presence there – it is also a border region.

Both the military due to its security paranoia and the liberals with their encouragement of crass inequality of land ownership and the “market” are responsible for the situation here. Inequality in land ownership is the worst in the country (next is the Mekong Delta); many minority people are easily cheated out of land when offered low prices which they consider good money, being so poor, and being ignorant of the land laws. They then end up as agricultural laborers for the coffee and rubber barons. The Central Highlands has close to the highest GDP per capita in the country, but the largest incidence of severe poverty.

However, as we noted above regarding Thai Binh and other outbreaks, in most cases, the Vietnamese state tends to buckle under and ultimately support the people’s demands, even if they don’t say so openly at the time. Likewise, with the large number of strikes, the state tends to take the side of striking workers and, the official trade union acts as part of the state in demanding the exploiting bosses give in to workers’ demands, as demonstrated in my article last year. These facts themselves point to something about the Vietnamese state that should hold us back from any firm conclusions about its evolving class nature. So what about the Central Highalnds?

As with Thai Binh, a media blackout was imposed, and at first most declarations consisted of attacks on ‘foreign interference’ – which, incidentally, was undeniably a factor. It was unclear whether, considering the special nature of the region, the same pattern would be followed as in other cases.

However, the May 17 Viet Nam News featured a front cover story which revealed the thinking going on among the leadership. A conference attended by local officials, minority representatives, the Womens’ Union, the army, the fatherland Front, the Trade Union Confederation and the Youth Union was held, chaired by Truong Quang Duoc, Politburo member responsible for the Mass Mobilisation Commission.

According to the article, those present spoke of weaknesses in mass mobilisation and serious social problems arising in places where “Party cadres and members had lost touch with the people.” Local Party organisations and mass organisations were “lax and inefficient” and efforts to train local minority cadres had not been diligent enough. In particular, they noted that some investment projects in the region “have not paid enough attention to the specific cultural and historical needs of the local ethnic minorities.” There also “remain many loopholes in the execution of Party and State policies.” They called for speeding up the struggle against hunger and poverty, developing education and health care, and implementing grass roots democracy, and stressed the need to “strictly implement Party policies on nationalities and religion” – thereby implying they had been violated. Many delegates asked the government to “judiciously settle land-related issues, paying due attention the interests of local tribal people.” The authorities were also urged to “exercise strict control over unorganised immigration into the region. Furthermore, it was vital for the government to “select and train a contingent of young minority people, who would take up leadership positions in the Party and the administration.”

It must be said that this was fairly forthright self-criticism that touched on all the major issues. But what is even more interesting is what they don’t publicly announce but what we hear of from people working in the region. Following unrest in February, new rules have been set for ALL provincial officials throughout the Central Highlands – they must spend ONE YEAR living with local people at the Commune level – at this moment 67 officials have to give up their jobs for a year and go to live with locals. While these officials are away, their administrative positions are temporarily abolished, to avoid a situation of them spending most time in their offices and just the odd night in the commune. In addition, ALL last year graduates of the Police Academy must spend their last YEAR in the central Highlands working with local people (agricultural extension, farming etc).
It is to be hoped that these measures bear fruit, as the central Highlands can perhaps be described as the weakest point of the Vietnamese revolution where the most serious violations have occurred.