What Must Vietnam Do to Join the Asian Tigers?: News Releases: The Independent Institute

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News Release
November 10, 2008

What Must Vietnam Do to Join the Asian Tigers?
New Book Examines the Country’s Cultural and Political Past, Charts Path for its Future

Vietnam Rising is a much-needed book on a much-neglected topic. Ratliff clearly explains Vietnam’s pro-entrepreneurial evolution, where it’s come from, and the hurdles on the path to where it’s going.”
Peter T. Leeson, Professor of Economics, George Mason University

OAKLAND, Calif., Nov. 10, 2008—Ever since the Asian Tigers emerged as thriving members of the developed world, economists have marveled at the rapid growth and industrialization of Southeast Asia. Amidst America’s current economic woes, some already preach the rise of the Chinese century, with Beijing leading its neighbors to a position of world dominance. The latest of these rising stars, Vietnam joined the World Trade Organization in January 2007 after two decades of liberalizing economic “renovation” by the Vietnam Communist Party (VCP). As the world economy stumbles, however, will Hanoi’s success story last? Is nationwide economic prosperity truly possible under the stifling corruption of Communist oversight?

In Vietnam Rising: Culture and Change in Asia’s Tiger Cub (November 13, 2008 / The Independent Institute / $15.95), Independent Institute Research Fellow William Ratliff examines the nation’s unique approach to nurturing private enterprise and development while respecting its Confucian and Communist heritage. Ratliff highlights many encouraging signs in Vietnam’s recent development, but he warns that the country still faces major obstacles to ensure enduring prosperity and stability. Current economic growth rates, he argues, will be unsustainable in the face of a persistently high inflation rate (at times as much as 26 percent), VCP socialist inclinations, and Hanoi’s track record of propping up moribund state-owned enterprises with politically subservient and insolvent state banks.

For Ratliff, Vietnam’s economic prospects are best viewed in terms of its political and cultural history. Rooted in Confucianism and later influenced by the authoritarian framework imposed by Ho Chi Minh, traditional thinking in Vietnam still favors state paternalism and communitarianism, which run at odds with the free environment necessary to foster entrepreneurship. Indeed, the Communist legacy has also tolerated significant levels of corruption and inefficiency, both highly antagonistic to the nascent private sector.

The last twenty years have seen the poverty rate plunge from 70 percent to around 15, but Ratliff urges the VCP to be even more progressive in order to maintain current growth rates. Economic decisions must be both well informed and separate from political power and interests; and development efforts and funds must be used effectively.

While Ratliff sees some hope for this transition, he warns against the assumption that “the Vietnamese will henceforth talk and act just like us.” Instead, he predicts in Vietnam Rising that the VCP will search for a way of “squaring the circle, of finding a possible alternative path to development.” This may mean emulating other Asian economic success stories, particularly China’s thus-far successful strategy of supporting macroeconomic stability and market-oriented policies while maintaining a strong central government.

While acknowledging that a domestic or international crisis “could suddenly throw everyone back into an earlier and less hopeful era,” Ratliff emphasizes that much depends on the attitude of the VCP moving forward. Hanoi must continue to build an atmosphere conducive to entrepreneurship and private sector development while nurturing international contacts and commercial relations. Only further development along these lines will bolster economic growth in the areas currently most lacking.

Ratliff’s assessment of Vietnam’s complex economy is logical and comprehensive. In well-written, easy-to-read style, Ratliff paints a thorough and realistic picture of this rising star’s past, present, and future prospects. Readers will come away with an estimable knowledge of this remarkable country’s story.

Praise for Vietnam Rising

Vietnam Rising is an informed, wide-ranging, eye-opening survey of economic policies and practices in Vietnam since 1986, when the program of economic reform or Doi Moi was launched. Ratliff argues persuasively that Vietnam’s post-1986 development record is very impressive in some ways but mixed or poor in others. His interesting explanation for this outcome is the contradictory influences of Confucianism, colonialism, nationalism, socialism, communism, capitalism, and globalism in Vietnam. Ratliff writes clearly and engagingly and provides rich empirical detail and documentation to support his arguments.”
Robert A. Packenham, Professor of Political Science Emeritus, Stanford University

“The Vietnamese economy is a complex combination of ideology and pragmatism, central planning and entrepreneurship, and isolationism and openness. History and culture have left their imprint, but there has been vast economic change during the past two decades. This accessible and comprehensive book is a must read for anyone interested in economic growth and this increasingly important economy.”
James D. Gwartney, Professor of Economics and Director, Gus A. Stavros Center for Economic Education, Florida State University

“In Vietnam Rising, William Ratliff has written an insightful, informative, succinct account of contemporary Vietnam, with an emphasis on the business environment. Anyone planning a business or recreational visit to Vietnam should pack a copy of this book in his carry-on baggage.”
Alvin Rabushka, David and Joan Traitel Senior Fellow, Hoover Institution

“Especially given Vietnam’s modern history, this insightful book reveals the remarkable rejuvenation of that country’s economy in the last few years. Ratliff celebrates the progress that has been made but he also highlights the many challenges still to come if Vietnam is to create sustained economic opportunity and well-being.”
Robert A. Lawson, Associate Professor of Finance and Co-Director, Center for International Finance and Global Competitiveness, Auburn University

Vietnam Rising: Culture and Change in Asia’s Tiger Cub
By William Ratliff
Published by The Independent Institute
November 13, 2008 | Softcover | 128 pages | $15.95 | ISBN 1-59813-026-9

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