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Learning from the Vietnamese

IT’S A bit disconcerting to hear President Benigno Aquino III telling Filipinos to learn agriculture from the Vietnamese. The advice at best appears to be one borne from misinformation, and at worse, another indication of our unnecessary insecurity over our country’s condition.

The Philippines after all is more developed than Vietnam, a country ravaged by wars of aggression by the French, Japanese and finally by the Americans since the start of the 20th century. Our country’s $1,890 GDP per capita, a measure of a nation’s level of development, is more than twice Vietnam’s $890.

Mr. Aquino advising Filipinos to learn from the success of Vietnam in agriculture is just like saying that residents of Metro Manila should learn farming from Mindanao since that region produces more rice than the metropolis. Vietnam is still a dominantly rural economy, with 73 percent of its people in rural areas (roughly the same proportion in Mindanao) compared to 37 percent for the Philippines. That our agricultural sector is more productive than that of Vietnam is reflected in the fact that even with much fewer people in agriculture, our agricultural value added as a percentage of the total economic output is 14 percent—close to Vietnam’s 20 percent.

I hope our impressionable President will be more properly briefed during his planned trips to Cambodia and Laos.

However, there are indeed valuable lessons we can learn from Vietnam, although they are quite different from what Mr. Aquino may have thought.

First, is that the decline—or the impending collapse even—of Vietnamese agricultural production was reversed only starting 1986 with a new policy of de-collectivization of farms. That is, the Vietnamese leadership decided to give farmers property rights over their lands, which it calculated was the best incentive for productivity. Before this, the Communist Party of Vietnam’s agricultural policy, hewing close to Marxist ideology, was for peasants to work as rural proletariats in huge farms consisting of formerly small farms collectivized as a unit.

Sounds a bit familiar? Yes, the capitalist counterpart of “collectivization” has been the corporatization of haciendas that has been the loophole in our agrarian reform law, and the tactic the President’s clan has taken to prevent Hacienda Luisita from being subdivided and distributed to its peasants. The Aquino clan may have all the economic or business reasons to resist the hacienda’s division among its workers. Still it remains a symbol of the landed elite’s resistance to agrarian reform. That’s an important lesson Mr. Aquino should have learned from his trip to Vietnam.

Second, the de-collectivization reform was actually part of a drastic change in state policy for Vietnam’s economic development started in 1986 and called the Doi Moi program, or “renovation.” The program, launched at the Sixth Congress of the Communist Party of Vietnam, basically moved the country’s economy away from a state-directed one towards a market economy. This was Vietnam’s version of China’s earth-shaking move towards capitalism, which started a decade earlier and which has made it an economic superpower now.

Doi Moi essentially involved the move towards a capitalist system, with individuals having property rights, under an authoritarian state run solely by the Vietnamese Communist Party. Doi Moi marked the end of the communist ideology in Vietnam, even as the nation is still officially called the Socialist Republic of Vietnam. This should be a major lesson for our communist ideological stragglers (whose leaders are now entering old age), who should drop their egos and look boldly at reality: The Marxist framework has been thrown into the dustbin of history even by communist parties which have won power in their countries.

Third, Vietnam enjoyed nearly two decades of political stability since the South was unified with the North in 1975, despite its brief war with China in 1979. The authority of the Communist Party of Vietnam has been unchallenged, and there was a smooth transition of power from party secretary general Truong Chinh (the successor of the revered Ho Chi Minh) to the more liberal-oriented Nguyen Van Linh in 1986, who launched the Doi Moi program. As I have argued in the Philippine case, in an article in this newspaper (Inquirer, 8/30/09), a country’s political stability is the sine qua non for economic growth.

Look at the data squarely, and one doesn’t need to over-analyze or invent “damaged-culture” hogwash to explain why our country has lagged.

Much of our country’s economic problems are simply due to the years we lost from 1983, the start of the Marcos regime’s collapse, to 1991, when the last coup attempt was defeated, and then in the two years 1999 and 2000, when the Estrada presidency unraveled. Despite all the controversies that hounded the administration of President Gloria Macapagal-Arroyo, her political base actually remained stable and there was no possibility at all (as the markets would attest) that the government would collapse. Thus, the country’s average GDP growth rates since the Marcos era were highest during periods of political stability: during the Ramos administration (3.8 percent) and during the Arroyo administration (4.4 percent).

It would be extremely tragic for our country if this time, sheer incompetence combined with moralistic arrogance creates political instability.

From the Philippine Daily Inquirer