Floating a sinking ship

The near-collapse of a state-owned bellwether



It wasn’t supposed to happen. After decades of war and years of political isolation, Communist Vietnam is now one of the fastest growing economies in Southeast Asia, feted by the largest economies in the world like the United States, China and Germany. But the much touted economic revival of Vietnam through its embrace of the market economy is colliding with its politics.

In spite of the billions in foreign direct investment pumping into the country, around a third of Vietnam’s economy remains state-controlled, or about 4,000 businesses—part of a policy to ensure that key industries such as oil, mining and shipbuilding stay under Vietnamese control.

The limitations of that strategy, however, are becoming evident amid the worsening financial catastrophe at Vietnam Shipbuilding Industry Group (Vinashin). The shipbuilder was one of the jewels in the Party’s crown as its jovial chairman oversaw annual growth rates averaging 35% to 40%. The payroll ballooned to 70,000 employees and 28 shipyards were added to the portfolio.

However, mismanagement and allegations of fraud surfaced post economic crisis when in 2008 and 2009, the chairman reported profit at Vinashin when in reality the shipbuilder was hemorrhaging cash. This was due to ill advised investments in hotels, breweries and insurance, while obsolete vessels were purchased for Vinashin’s sea cargo business. One of the ships the chairman bought was made in Poland in 1973 but it couldn't float because of cracks in its hull.

That wasn't supposed to happen either. The prime minister stepped in and removed the chairman and shortly after, his successor. The successor has since been replaced. Vinashin teeters on the edge of bankruptcy with an astonishing debt of $4.7 billion. When the government revealed how much it had poured into Vinashin during earlier trouble spots, the chairman’s falsified financial reports prompted his arrest. His successor was also rounded up and arrested. Next to go were the financial executives.

But here’s the extraordinary thing. Not the bloat and waste and hubris. We’ve heard that story before. What’s remarkable is what happened next. Many of Vinashin’s businesses were “out of control,” according to the government. Its August report on the debacle concluded that the administration of “state-owned enterprises and economic groups in general, and Vinashin in particular [is] inefficient and inadequate.”

It would seem this government is looking to shed some ballast.

Tet Trung Thu

Mid-Autumn Festival



In the eighth lunar month, a festival is held to honour the moon.

Traditionally, children would spend hours making paper lanterns and then parade them around, acknowledging the full moon and fall harvests. Nowadays, busy parents buy readymade lanterns and noise makers for their kids. Banh tet trung thu is the special cake eaten at this time of year—literally a moon cake. Bakers make round patties in the autumn to represent the moon and at Tet (Lunar New Year) square ones, to represent the earth.

Moon cakes are filled with lotus and green bean paste to represent nature and people, and a salted egg yolk in the middle represents yin and yang, the ancient Chinese philosophy of positive and negative forces. Some cakes have bits of sausage or roast chicken or pork. The humble cake has gone upscale with wealthier families shelling out for bird’s nest- and shark fin-filled concoctions.




Legends around this festival have a jade rabbit in the moon grinding up herbs, or a small carp who wanted to be a dragon or a prince who flew to the moon holding a tree root (if you look closely during the full moon, you can still see him sitting under the canopy of that tree). I’ve heard another version where a princess accidently peed on a sacred banyan tree, causing all kinds of trouble and banishment, but that story just sounds like the Confucian version of Christianity’s “blame everything on Eve.” And since Mid-Autumn is a children’s festival, I’ll stick to the little-carp-that-could version of the day, while I munch my prosperity pastries.

Public protests

Signs of discontent



Social unrest is on the rise and becoming more visible. Nationwide, a number of public protests over perceived corruption and economic injustices have garnered media attention, both here and abroad. "Angry mobs" have been reported in the north and labour strikes in the south. The other morning we watched as an irate grandmother waving a picture of Uncle Ho was quickly surrounded by cops and bundled into a nearby police station.

The signs in the picture above demand Eden Group to pay fair compensation to the former tenants of an apartment complex who were evicted to make way for a highrise. The protesters want the government (who facilitated Eden Group's authorization to tear down the apartment) to keep promises made as far back as 1997 about assessing fair market price on land in the event of clearances and resettlement. Land grievance issues are an ongoing struggle given most people's reluctance to leave their land and homes. But there is little one can do in the face of government directives for "modernization" and developers' rapacious appetite for land.

These protesters are parked kitty-corner from the Ho Chi Minh City People's Committee, where AK-47-wielding military police patrol. But there are no bullhorns or rallies, rather mostly silent, dogged persistence, as the majority have been at this since last fall. In a welcome turn of transparency, government officials announced nearly 4,000 public protests had occurred over the last five years.

However, after this photo was taken the photographer was asked to leave or be arrested on the spot.

National Day

Economic peacetime fogs the history of war




The old men arrived this morning, moving slowly but determinedly down each narrow, twisting alley. They knew what they were doing—there was no need to rush. Their olive green uniforms contrasted sharply with the scarlet flags they were hanging outside each house. They were hanging larger versions of the small crests sewn on their right shoulders.

House by house, the men moved along, stretching up, sometimes on tiptoes, to insert the flags into thin brackets by each front door or gate—including ours. We too are officially marking the 65th anniversary of the August Revolution (goodbye Japanese occupying forces; now what to do with the French?). Undeterred, Ho Chi Minh proclaimed the Democratic Republic of Vietnam on September 2, 1945, and the French were defeated almost a decade later.

It’s a national holiday and the Vietnamese will go about their day peaceably, spending time with friends and family, listening to the thrum of rain on the roof tops. They're fine with that because for many it’s just a welcome day off work, as most were born after the last war with the Americans in 1975. If anything is commemorated, it’s their increasing prosperity.