Visit Viet Nam or Japan? This was the question I faced weeks ago.
Viet Nam was about work. I was invited to attend the Vietnam Economist Annual Meeting (VEAM) and present studies on health taxes in the Philippines.
Japan was about leisure and the company of family, including my 93-year-old mom. But much as I love bonding with mom and family on a foreign trip, I chose work. I could forgo a week without being with my mom since anyhow I would be seeing her in frequent family get-togethers in the coming months. More, I wouldn’t like to miss the rare opportunity of meeting the Vietnamese economists. I wished to listen to the Vietnamese themselves to explain their country’s spectacular economic performance.
Since embarking on a strategy that transformed its command economy to a “socialist market economy” in 1986, Viet Nam has made spectacular progress in achieving high economic growth and achieving social development. Since 1986, the strategy of doi moi (“rejuvenation” or “renovation”) has sustained an average annual growth rate of over 6%.
And the poverty rate, defined as the proportion of the population living below the national poverty line, was brought down from over 50% in the 1980s to 4.4% in 2021. In 2022, the proportion of the employed population in Viet Nam living below the international poverty line, or those living in extreme poverty, was 1.2%.
The year 1986 was also historic for the Philippines. Viet Nam had its doi moi; the Philippines had the people-power revolution that toppled the Marcos dictatorship. Alas, what some called the restoration of “elite democracy” was characterized by anemic growth and persistent poverty for almost 25 years. It was only in 2012 onwards — to be interrupted by a deep recession arising from COVID-19 — that the Philippines managed to sustain an average growth rate of above 6%.
In short, doi moi Viet Nam has outclassed “people-power” Philippines in growth and development performance.
To see is to believe. And thus, the invitation from VEAM was providential.
I do not tire of visiting Viet Nam.
My visits to Hanoi, Da Nang, and Hué were pleasant and enjoyable despite the intense summer heat. The streets, whether boulevards or narrow lanes, are dotted with roadside trees.
Even the presence of too many motorcycles, which can be annoying, is tolerable. An odd combination of formal and informal rules makes traffic navigation work. But what a surprise to see that some taxis are electric cars. Perhaps, an appropriate symbol of Viet Nam’s transformation is the manufacture of its own electric vehicles, branded Vinfast.
The tourist destinations are as attractive as those in the Philippines. To be sure, Philippine beaches stand out, but Viet Nam has its share of world-famous beaches. It is tempting though debatable to compare the beaches of the city of Da Nang to those in Rio de Janeiro. Rio wins because of the Brazilian sensuality and sexiness. But what the Philippines does not have much of but that Viet Nam is mightily proud of are the reminders of old civilizations, ancient towns, and imperial cities.
Further, Viet food is fragrant and aromatic. The fruits are as sweet and refreshing as those found in the Philippines, except that our mangga — those from Zambales and Guimaras — are far superior to the Viet mangoes.
But this time, my visit was not mainly about tourism. It was about meeting people and learning from them.
The Vietnamese, like Filipinos, always smile. And they are easy-going and casual. For the meeting of economists, I thought it was customary to wear a coat and formal leather shoes. I was overdressed. The attire of an elder economist, the organizer and host of the meeting, was informal. He, too, wore a pair of sandals.
Some of the Vietnamese economists I met have an affinity with the Philippines. A young associate professor told me that he and other Vietnamese colleagues — there were 10 of them — had studied at the University of the Philippines Los Baños College of Economics and Management, circa 2005. Another Viet economist, now a professor in a US university, said that he was once a volunteer helping the Vietnamese refugees who temporarily stayed in Palawan.
The annual meeting of the Vietnamese economists was a unique learning experience. The topics, presentations, and discussions were of high quality. The agenda covered economic theory, green economy and climate change, health economics and health taxes, employment, migration, human capital, global value chain, institutions, behavioral economics, pandemic response, etc.
Most notable was the participation of many young people. In fact, they constituted the majority. And many of them submitted papers that competed for best paper awards.
Vietnamese economists have been schooled in many parts of the world. The language of the conference was English, and there was a special and amusing reason behind it. Other than the attempt to master the global language of science, the annual conference deliberately uses English as medium to avoid surveillance and censorship of local authorities. Yes, Viet Nam is authoritarian despite doi moi.
The economics profession in Viet Nam has contributed significantly to the country’s rapid progress. For example, an independent Viet Nam Initiative for Energy Transition has been established “to accelerate the transition of Vietnamese energy system in a sustainable and reliable manner.” The Development and Policies Research Center (DEPOCEN), an economic consultancy group, has published peer-reviewed economic papers which serve as inputs to Vietnamese policymaking.
I asked Le Thi Thu, a senior policy adviser for the global Campaign for Tobacco Free Kids, what in gist can explain Viet Nam’s economic success. Her response was pithy: rich resources that Viet Nam has parlayed through greater value-adding, cheap labor aided by cheap prices, and a sound policy environment. Of course, a sound policy environment requires sophistication and contextualization.
The Vietnamese economists are also good at telling narratives. Cuong Le Van, the senior research fellow at DEPOCEN, has an unusual but funny metaphor to describe Viet Nam’s economic strategy. He says that Viet Nam’s three economic pillars can be compared to a father having three children — the legitimate biological son, the illegitimate son from a mistress, and an adopted child. The biological son, pampered for so long, symbolizes the state-owned enterprises. The illegitimate son, who is now the favorite, represents foreign direct investments (FDI). And the adopted son is the domestic private sector. The “apple of [Viet Nam’s] eye” is FDI, the primary source of its rapid growth and technological innovation.
And this is the lesson I can take back home: how the Philippine policymaker can become more loving to the figurative mistress and illegitimate son. That is, how the Philippines can entice investments, not only FDI, which will generate growth and improve the people’s living standards.
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.