A touch of capitalism leaves Vietnam's communists in a quandary
The visitor sees a flurry of building activity in and around Hanoi these days. Farmers add extensions to their tiny houses, shops glisten with new coats of paint - all testifying to the success of the capitalist-style economic reforms introduced in this communist nation since 1979.
Evidence of this new prosperity also points to the problems of introducing elements of free enterprise in a centrally controlled economy.
For instance, some shopkeepers and peasants are doing well, but government and party officials - people in the nonproductive sector - are still making what one of them calls a ''hungry salary.''
Take one man I know, a middle-level official who has been committed to the communist revolution since 1945. He makes 300 dong (about $33) per month; his son, a freshly graduated engineer, makes 120 dong (about $13) per month.
These salaries seem derisory compared with the money to be made in the unofficial sector. A young rickshaw driver, whose father fought with rather than against the French during Vietnam's revolution, makes around 2,000 dong ($220) a month; a woman squatting at a street corner with baskets of vegetables to sell reckons she'll make about 1,000 dong this week. ''She was probably underestimating,'' the cadre commented dryly.
The relative prosperity, and the policies behind it, are a far cry from the situation at war's end in 1975.
The economy in the south had collapsed. Subsidized by the United States, it had developed an insatiable appetite for consumer goods but almost no capacity to make the money to buy them.
The north was leaner and poorer. But relatively substantial wartime aid had allowed Hanoi to dole out fuel, chemical fertilizers, and other key agricultural commodities at giveaway prices. And this had allowed the leadership to temporarily ignore the perilously inefficient management of agriculture.
Despite these massive problems the leadership launched an ambitious five-year plan in 1976. Under the slogan ''fast, strong, and firm development'' - coined by the country's most orthodox Marxist, Truong Chinh - Vietnam aimed at high-speed socialist change.
It was a disaster. Agricultural production plummeted and the south's rice-rich Mekong Delta peasants reverted to subsistence farming rather than pay taxes. A massive effort to ''abolish capitalist trading'' in Ho Chi Minh City in March 1978 collapsed.
Some local cadre and senior leaders began to have second thoughts about the fast drive to socialism. In 1977, quiet experiments in ''under-the-counter contracts'' began in some areas. Such contracts arrange that a group of peasants should provide the authorities with a set amount of food from a piece of land, allowing them to keep the surplus. And in 1978 Vo Van Kiet, the party chief under Ho Chi Minh and a southerner with a reputation for the unorthodox, began to draw around him a group of economists from the old regime - among them a former acting prime minister of the defeated republic in the south.
The recommendations of Kiet's group are thought to have been behind many of the reforms introduced at the end of 1979.
Briefly these were:
* Introduction of contracts in agriculture. A group of farmers agrees to produce a certain amount of crops from a piece of land, assuming that the weather is reasonable and the government provides certain key inputs like fertilizers and insecticides. Members of the group can dispose of any surplus as they like.
* Introduction of piecework in factories and handicraft workshops. Factories were allowed to buy raw materials on the open - that is, black - market rather than wait, perhaps indefinitely, for the central government to provide them.
* Permission for local overseas trade. Provinces and larger cities were allowed to set up their own export-import companies to trade directly with foreign countries.
Such economic liberalization was spurred by desperation. In 1978 Vietnam suffered its worst harvest ever, China cut off aid, and Vietnam intervened in Kampuchea.
''Without the crisis of 1978-79,'' an official commented later, ''we'd never have had reforms.''
But these reforms were bitterly opposed. A Politburo member reportedly urged his home province not to implement them. Another supposedly declared that the only way to solve the food problem was to confiscate all rice from the peasants and redistribute it equally.
Opposition was still continuing when the fifth congress of the Communist Party of Vietnam met in March 1982. The reforms were ratified, though, and the man most closely idenitified with them, Vo Van Kiet, was made a full Politburo member and vice-premier in charge of planning. Vietnamese are still debating whether the latter promotion was a reward or a stratagem to stunt Kiet's career; planners in Vietnam have tended to retire prematurely.
Proponents of the reforms base their defense largely on practicality. Results seem to have vindicated his plans.
For the first time ever Vietnam exceeded food production targets last year, and it is now hoping for food self-sufficiency by the end of this year.
The import-export companies have also helped mitigate the effects of Vietnam's chronically bad infrastructure. The transport system is unable to deliver fertilizer from the main ports to the rice-growing areas, particularly in the Mekong Delta. Soviet ships deliver a certain amount directly to some delta provinces, an agricultural specialist says, but the rest comes from overseas. The companies sell or barter surplus rice and shrimp overseas - largely to their archenemy Singapore - and obtain in return agricultural and consumer goods.
The new policies have also spawned major problems. The export-import companies, for example, compete against each other, fueling inflation in food prices. ''We don't eat shrimp here anymore,'' said one government official from the Mekong Delta. Last year shrimp cost 50 dong ($5.50) a kilo (2.2 pounds); this year it is 550 dong ($60.50).
Then there is graft. The large amount of whiskey that one company reportedly imported last year, for example, would not seem to have much to do with socialist construction.
The Ho Chi Minh City Company did $100 million in trade in 1981, a company official said. It would probably clear $350 million in 1982. But one-fourth of the 1981 figure came from sales of luxury goods to residents of the former capital of South Vietnam with foreign currency. The buyers almost certainly resold the goods on the black market. The picture of a state company perilously close to wholesaling to the black market has led to a recent government decision to control the companies more closely.
A more basic problem is that government is refueling an economy it does not fully control. Much of the trade in the south is still in the hands of Chinese traders who have generations of inherited wisdom in outfoxing governments of all colors.
''We control under half of the goods and money in circulation in Ho Chi Minh City,'' an official admitted. Over 180,000 families - about one-third of the city - receive packages from abroad. Many of the gifts are luxury items that end up on the black market.
The government has announced new measures aimed to control this, but certainly does not have the means to implement them. And then there is the key problem: the reforms have revived the economy, pushed prices up, and left those on a fixed salary pretty unhappy.
Take the middle-level official mentioned at the beginning. Every month he can buy 18 kilos of rice at a preferred price. He can also buy 1.5 kilos of meat (3 pounds) at a special price. ''But if I want any more pork,'' he says ruefully, ''I have to buy it on the outside market - at 150 dong a kilo ($7.50 per pound). Which means I don't eat it.''
There are broader issues, too. ''The contracts are effective,'' the official continued. ''But who will invite the crippled soldier or the widow with small children to join their work team? They're worried about profits now. But we have lots of widows and crippled soldiers, and I thought we were trying to build socialism to help people like these.''
The contract system is here to stay - the leadership makes that plain. But the debate in Vietnam between proponents of growth and equality is far from over.