Asian Development Bank country director Ayumi Konishi has projected a 7.8 percent economic growth for Vietnam this year. Konishi also referred to Vietnam as “the star of Southeast Asia,” while the World Bank also praised it for being “remarkably successful in generating growth and reducing poverty,” 30 million Vietnamese who were once considered poor no longer being in that category.
These paeans came in the wake of Standard and Poor’s (S & P) upgrading of Vietnam’s credit rating to “BB,” because of “positive changes” due to the economic reforms the government has instituted. S & P said Vietnam had a high potential for further economic growth, but cautioned that it still had “structural weaknesses” it had to address.
The World Bank echoed the same caution. The country, Managing Director Juan Jose Daboub said, “needs to accelerate” the tempo of reforms, and has to decide whether it will lead or follow in the Southeast Asian region. Daboub nevertheless was optimistic that the reform agenda WB is funding in Vietnam could be a model for other countries.
Not bad for a country that emerged from 30 years of war in 1975 with its economy in ruins, and much of its countryside devastated. Vietnam is incidentally now the second largest rice exporter in the world after Thailand, while the Philippines remains a net exporter of the Asian staple. Philippine credit rating is a notch below Vietnam’s, and its projected growth this year—5.4 percent–also below its 7.8 percent.
The contentious may cavil that the Vietnamese achievement–and the likelihood that it will soon overtake the Philippines–has been largely driven by its government’s faithful implementation of the World Bank agenda of market reforms, liberalization and government non-interference. While this may be true, and raises the question of whether, as announced, the present stage of economic development in Vietnam indeed marks any “transition to socialism,” the achievements are nevertheless real enough. And they’re all the more notable given the incredible devastation the entire country suffered starting in the late 1960s up to the early 1970s.
That period marked the intensification of the US war in Vietnam, although the country had been more or less at war since World War II. US efforts to prevail over the communist-led National Liberation Front of Vietnam–the NLF, whom the US baptized “the Viet Cong”– included not only the carpet bombing and defoliation of vast areas of the countryside of what was then South Vietnam, but also attacks on the north meant to bomb North Vietnam “back to the Stone Age.”
In addition to the constriction of the acreage of land that could be cultivated in both North and South, the war also left behind unexploded landmines, a legacy of environmental problems due to the US use of chemical warfare, and a death toll of over 1.5 million Vietnamese, most of them non-combatants.
Despite these legacies of nearly three decades of war, the government of Vietnam has managed to preside over high rates of economic development. As a result the country is indeed threatening to be the next economic star in a region that includes stellar achievers like Malaysia, Singapore and Thailand.
Significantly missing from the list of Southeast Asian achievers, and certainly far from being a potential regional “star,” is the Philippines. Many Filipinos are perplexed by their country’s record of non-achievement, and have at various times attributed it to (1) the “licentious” media, (2) an excess of freedom, and, (3) more recently, the gridlock supposedly inherent in the presidential system.
The last has in fact been advanced as the primary reason for the shift to a parliamentary system favored by Mrs. Gloria Macapagal Arroyo, House Speaker Jose de Venecia, and their allies in Congress and in the local governments.
Another study by S & P suggests, however, that the problem may not be so much in “the system” but in the people who run the system. Comparing Indonesia and the Philippines, the September 4 study said that the main difference between the two countries is not so much economic as political, in the sense that Indonesia is more politically stable than the Philippines.
The key to Indonesian political stability, said the study is the popular mandate of Indonesian President Yudhoyono, although the process of stabilization had begun with the presidency of Megawati Sukarnoputri in 2001. As a result of his unquestioned mandate in 2004, Yudhoyono has managed to build support in parliament and to implement policy reforms.
The differences between the political situation in Indonesia and the Philippines are as obvious as the difference between night and day. Political instability continues in the Philippines, where Mrs. Arroyo’s legitimacy remains in doubt. As a result she has been twice in peril of impeachment, even as military and civil society restiveness continues to haunt the regime. Thus S & P’s description of Mrs. Arroyo as a “divisive persona.” By implication, this view sees her as part of the problem rather than as part of the solution.
One might add that the regime policy of discontinuing talks with the CPP-NDF, and its launch of “all out war” against the insurgency, have also intensified opposition to the regime and escalated the number of armed confrontations between government and NDF forces in the Philippine countryside.
What these comparisons–between Vietnam and the Philippines, and between the Philippines and Indonesia–suggest is that it is the mandate and quality of political leadership that make economic progress and national development possible. This is evident in Vietnam, where the decision makers have a demonstrated capacity to draft the policies and implement the decisions of benefit to the country, as well as in Indonesia, where, because of the stability created by the sound mandate of President Yudhoyono, S & P sees the economic future more positively than in the Philippines.