In City Symbolic of U.S.-Vietnamese Past, Clinton Looks to Future

HO CHI MINH CITY, Vietnam —  In a dizzying finale to his whirlwind Vietnam visit, President Clinton held a round-table discussion with young people on the Information Age, encouraged businesspeople to unleash their entrepreneurial skills, met the Roman Catholic archbishop to promote religious freedom, talked with the local mayor about social programs, urged schoolkids to use bicycle helmets on this country’s deadly streets, ate lunch among Vietnamese at a diner, and over and over again shook hands, posed for pictures and reveled in the throngs of Vietnamese who greeted him at every stop.

He genuinely seemed sad Sunday to wrap up one of the most triumphant foreign tours of his presidency. “I’d like to spend all day here,” he told the young people, in what may well have been a wistful reflection about the entire trip.

But the primary goal of his one-day stop in Ho Chi Minh City, where a quarter of a century ago U.S. helicopters scrambled to evacuate the last Americans before the fall of the city, then known as Saigon, was to lay the foundation for a new kind of relationship with Vietnam.

Clinton didn’t visit any of the old symbols of what Vietnamese call “the American war,” a 10-year conflict that killed 58,000 Americans and an estimated 3 million Vietnamese. The president instead announced a new U.S.-Vietnamese “economic dialogue” designed to “grow our economies in ways that improve people’s lives.”

He also pledged a $200-million line of credit to support American investment in Vietnam and help the impoverished Southeast Asian nation tap its enormous reservoir of skills and its educated labor force.

Both steps are designed to launch the U.S.-Vietnam Trade Agreement that was signed in July and awaits ratification in Hanoi and Washington. It has come to symbolize the American commitment to help develop a country it once massively bombed.

“I’d like more Americans to be involved with the Vietnam of the future, not the Vietnam of the past,” Clinton told the round table of leaders of Vietnam’s next generation whom he met at the Ho Chi Minh City Fine Arts Museum. He also called for a new “partnership,” a message he repeated in different forms throughout the final day of his historic three-day tour.

The trade pact will encourage badly needed foreign investment and help Vietnam develop a more open, sophisticated free market “based on the international rules of law,” he told Vietnamese businesspeople.

“Your best days clearly lie ahead, as you continue to find the means to release the skills and ingenuity of your people.”

Clinton generally expressed great optimism about Vietnam’s political future as well. In an interview with CNN before leaving, he said, “The trend toward freedom is virtually irreversible” in one of the world’s last Communist countries.

He predicted that, as the trade agreement is implemented and Vietnam moves toward membership in the World Trade Organization, the rule of law and openness will become more important.

“There will be a lot more access to the Internet and information of all kinds. And so there will be more freedom,” he told CNN.

For all the public enthusiasm and expectations surrounding the Clinton visit, however, his presence actually reflects Vietnam’s serious economic problems after a disappointing earlier spurt of cautious reforms. Many smaller American companies and entrepreneurs departed in 1996 and 1997 because of frustration over the government’s pace of reform, multiple layers of bureaucracy and widespread corruption.

Instead of becoming Asia’s new tiger, Vietnam watched foreign direct investment drop to $1.4 billion in 1999 from $8.3 billion in 1996, according to Andrew Pierre, a Georgetown University professor who recently spent four months at Vietnam’s Institute for International Relations in Hanoi.

To foster a new round of investment, Clinton brought with him a delegation of executives from major American corporations.

“The ball is in Vietnam’s court. We can help bring people there. The Vietnamese ultimately have to impress them that this is a place they can invest and make a good return on their equity,” Gene Sperling, the top White House economic advisor, told reporters traveling with Clinton.

With help from the United States in making the transition, the trade agreement gives Vietnam a chance to have a modern economy. It “allows” Vietnam to be successful but “doesn’t guarantee it,” said Thomas Vallely, a Vietnam veteran and a former member of the Massachusetts Legislature who now runs a Harvard University development project in Vietnam.

Globalization Anxieties

Vietnam’s transformation is complicated by the government’s deep anxieties over globalization--and its impact on one of the world’s last dedicated Communist regimes.

“Vietnam’s leaders are very stubborn, and the government fears the consequences of globalization, like the Internet. They see all this subversive stuff seeping in and they see it undermining their authority,” said Stanley Karnow, author of “Vietnam: A History.”

The transformation has already begun. Ho Chi Minh City, Vietnam’s commercial center and the former capital of South Vietnam, has particularly blossomed. More Westernized than Hanoi, the city still called Saigon by many Vietnamese has several cybercafes where youths sign on to the Net and get e-mail.

Although Vietnam has only about 85,000 Internet subscribers in a population of 80 million people, millions more are using software obtained through piracy on a booming black market.

Speaking to the Vietnamese business community, Clinton pointed out the benefits of Vietnam’s opening to the outside world. Over the last decade, Vietnam’s exports have increased sixfold, he said. Income per person has risen almost 70%, while more than 15 million people have been lifted out of poverty.

Vietnam’s young people have the “talent and ideas to create the jobs of the future for themselves in a new era of entrepreneurship, innovation and competition. That must be the future for Vietnam,” Clinton added.

For Vietnam, however, the obstacles are also partly cultural. “Given the country’s history of wars, Vietnam has 5,000 years of paranoia,” Karnow said. “It’s intensely nationalistic and chauvinistic, which is good for fighting a war but not for encouraging foreign investment.”

Ultimately, the old-guard Communists fear that economic openings will allow the United States and the West, which lost the military war, to win the battle of ideology and influence.

Yet Vietnam has a strong incentive to respond. Because of a burgeoning young population--60% of its people have been born since the war ended in 1975--the country must create 1.4 million new jobs a year for an increasingly impatient public.

It’s an impossible task under its current system. At the moment, Vietnam’s gross domestic product is equivalent to only 25% of the sales of General Electric, Vallely said. Economically, “it’s not a big place.”

Inefficient state-owned enterprises that can’t compete in global markets are still a large sector of Vietnam’s economy and account for 30% of GDP, according to Pierre, the Georgetown professor. Economic growth slowed to 4% last year, less than half what it was five years ago.

“The only way it can hope to meet the demand is to trust globalization and take what’s happened with Nike and make it a national strategy--make things for export to the United States,” Vallely said. Nike, an Oregon-based company, is today the largest private employer in Vietnam.

A Softening of Tone

Even some conservative elements of Vietnam’s government have begun to soften their tone. In 1966, Communist Party Secretary-General Le Kha Phieu, Vietnam’s most powerful figure, proclaimed: “Capitalism is backward. It does not meet the people’s need for happiness. It will definitely be replaced.” And as recently as 1994, he said that peaceful evolution, the code name for reform, “is our gravest danger” and pledged to resist all outside efforts to introduce reforms that would “only bring anarchy and chaos.”

In 1997, as the withdrawal of Western firms sliced foreign investment, he appeared to mellow and said, “The economic reform effort must be intensified.” But in his meeting on Saturday with Clinton, Phieu, who remains an old-guard Communist, reiterated that Vietnam’s future rested in socialism, and he referred to the 1965-75 war as a war against “imperialistic” occupation.

Phieu views Vietnam’s return to growth as “a reaffirmation” of Vietnam’s socialist roots, “even in the face of the Soviet Union’s collapse,” Sperling told reporters.

But most U.S. businesspeople think that Clinton’s trip will eventually pay dividends. Said Wayne Bannon, regional director for Motorola: “I think the main benefit of the trip is psychological, in that it will enable us to go forward with the trade agreement and other important economic issues. Clinton didn’t have an in-your-face attitude. He showed an understanding of the past and the issues that need to be dealt with. The Vietnamese appreciate that.”

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Times staff writer David Lamb contributed to this report.