The Ascending Dragon
PerryScope
By Perry Diaz
December 1, 2006
Thirty-one years after the end of the Vietnam War, the country ravaged for decades by explosive armed
conflicts with foreign powers, a united Vietnam is exploding once again. But this time around, the explosion
is not the deafening sounds of warfare -- which generations of Vietnamese had been accustomed to -- but
the whooping reverberation of economic boom.
The recently concluded Asian-Pacific Economic Cooperation (APEC) conference in Hanoi showcased
Vietnam’s miraculous economic recovery. Hanoi, founded 1,000 years ago as Than Long -- which means
“ascending dragon” -- is now the hub of an international trade network attracting investors from the “G7”
industrialized countries. Once isolated by the major industrial powers including a trade embargo imposed
by the United States, Vietnam has become East Asia’s second fastest growing economy behind China.
With a population of 84 million, it’s growth rate of 8.4% has exceeded those of the established Asian
economic “tigers” -- Japan, Singapore, Taiwan, Hong Kong, South Korea, and Malaysia. Indeed, within a
few years, Vietnam could be the new Asian “tiger” -- or aptly, the “ascending dragon” in Asia. It is
anticipated that with Vietnam’s “renovation” of its economic policies, its membership -- which has been on
hold for several years now -- in the World Trade Organization is assured.
A few weeks ago, Intel -- the giant chipmaker -- announced that it had selected Vietnam to build its largest
chip assembly and testing plant with a capital investment of $1 billion. Scheduled to start its operation in
2009, the mega chipmaker would employ 4,000 workers.
Last Nov. 15, 2006, AT&T announced that Vietnam will be accessible from the AT&T global network with
one of the leading local telecommunication carriers. A few days later, Japanese Prime Minister Shinzo Abe
affirmed that Japan -- which has the largest disbursed investment capital in Vietnam -- would continue to
contribute to improving Vietnam's investment environment. Japanese companies will invest an additional
$718 million over the next few years. Indeed, investment capital has been flowing profusely to Vietnam.
When the Vietnam War ended in 1975, the communist regime of the unified country enforced strong
measures against the intrusion of foreign investors. To survive economically, the government relied on
agricultural production by imposing quotas on the farmers. In most cases, the quotas were not reached.
On the brink of economic collapse in 1986, the communist leaders made an about-face and boldly
instituted “Doi Moi” -- literally translates to “change new” -- changing its hard line economic policies to a
new capitalistic market system. While the government remained communist, it has progressively granted
individual ownership and profit-making. Farmers were told that they can keep the harvest they made in
excess of their production quotas. Amazingly, production dramatically rose; thus, proving once again that
Free Enterprise works.
Today, Vietnam’s per capita income has tripled since 1985. Private employment has increased
exponentially. It is the world’s second exporter of rice and number one in coffee, cashews and pepper. Last
year there were 3.5 million tourists. And English is now the second language.
It is interesting to note that Vietnam and the Philippines have a lot in common… including ancestry. It has
been postulated by several scholars and historians that the people who populated Vietnam 4,000 years
ago migrated from the Philippine archipelago by way of Borneo. In his Pulitzer Prize-winning book, “Guns,
Germs and Steel,” Jared Diamond concluded that the Austronesian expansion started with the migration
from South China to Taiwan in 3,500 B.C. and from Taiwan to the Philippine archipelago in 3,000 B.C. In
2,500 B.C. the migration continued southward to Borneo and eventually reached Vietnam in 1,000 B.C. Pre-
Hispanic trade existed between the Philippine archipelago and Champa, as Vietnam was called then.
Geographically, the Philippines and Vietnam are on the same latitude and a little over an hour away by air.
The Philippines is slightly smaller in size with 116,610 square miles to Vietnam’s 125,622 square miles.
After the Vietnam War, many of the Vietnamese “boat people” -- the refugees fleeing the communist regime
-- arrived in the Philippines and were camped in relocation centers for processing prior to their final
destination, mostly in the U.S.
The two countries took parallel routes in 1975 when the North Vietnamese communist regime imposed its
totalitarian rule in all Vietnam while the Philippines was in the midst of a martial law. In 1986, while
Vietnam struggled to free itself from harsh economic bondage under communist rule, the Philippines freed
itself from the political grip of the Marcos dictatorship. But this was where the parallel routes took opposite
turns -- Vietnam took the right direction to economic independence and the Philippines went on a roller
coaster ride. In 1987, the Philippines’ GNP started to plummet down. By 1991, it was virtually zero. When
Gen. Fidel Ramos became President in 1992, the economy started to grow again and between 1994 and
1997 it fluctuated between 5.1% and 5.8%. Today, the growth rate is an anemic 4.6%.
The Philippines has a lot to learn from Vietnam’s “Doi Moi” program. There is no reason why it can’t be
duplicated or even surpassed. Once the envy of its neighbors, the Philippines today is teetering from an
unstable political situation and inundated with an endless torrent of corruption.
It is interesting to note what US Senator Albert Beverage enunciated a century ago in what has became
known as Manifest Destiny. In part, he said, “the Philippines give us a base at the door of all the East…
The power that rules the Pacific… is the power that rules the world. And with the Philippines that Power is
and will forever be the American Republic.”
While the United States had abandoned its colonial expansion in Asia since Philippine Independence in
1946, one thing remains true today is that the Philippines is still the door to all of Asia. With its strategic
location as the gateway to Asia, it can regain the economic supremacy that it enjoyed 50 years ago. The
Philippines could chart its own destiny and become an economic power in Asia. All it takes is will power
and good government.
(PerryDiaz@aol.com)
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