The Economist's Special Report on Vietnam

Vietnam has made a remarkable recovery from war and penury, says Peter Collins (author of the Special Report on the future of Vietnam). But can it change enough to join the rich world? "If the Vietnamese were to look at the table of the world's richest countries, they are all liberal democracies. Surely this is not a coincidence.”



Key points:
* In a decade or two, when much of the rest of the world will be ageing rapidly, Vietnam's boomers will still be at the most productive phase of their careers. Currently more than half of Vietnam's population of 87 million people is under the age of 30. And 3/4 of its population is under 35.

* Higher education and scientific innovation were the keys to riches for Japan, South Korea and Taiwan, Vietnam is wooing foreign high-tech firms and inviting rich countries to set up universities and training facilities on its soil. An Australian university, the Royal Melbourne Institute of Technology (RMIT), has already opened state-of-the-art campuses in Ho Chi Minh City and Hanoi. A German university just opened its door in September, and several South Korean technical colleges are planned. The US has agreed to help Vietnam train 10,000 Phd over the next decade, and giving Vietnam priority status for student-visas.

* There is hope that there might be change from within [the Communist Party of Vietnam] once it is seen to have become inevitable. The CPV has allowed some debate about whether it should drop the obsolete “C”-word from its name and become the Labour Party or some such. And perhaps allowing formation of a second party by 2016, or as early as 2011.

* Vietnamese leadership must realize that a market economy works best when there is a free market in politics too, otherwise Vietnam may end up like some other South-East Asian countries, stuck firmly in the middle-income trap it is trying so hard to avoid, and suffering from predatory elites, weak institutions, crony capitalism and a pseudo-democracy. South Korea and Taiwan are clear examples for Vietnam to follow as their democratic transition helped them develop a high-prosperity, high-tech economy of just the sort that Vietnam wants.

* The return of the boat people - former refugees bring back skills and money. The large number of well-educated professionals returning are just what Vietnam needs to relieve its shortage of higher-level skills. Yet in the longer term they are bound to become a force for political liberalisation.