The Reunification Electric Fan factory was built and named 16 years ago with the full confidence that North and South Vietnam would become one country again and that the factory would eventually produce 250,000 fans each year for the workers of this humid, tropical country.
By 1974, the factory was assembling 140,000 fans and victory on the battlefield in the south was less than one year away. Then came peace -- and the sobering discovery that the factory and all of Vietnam had even more economic hardships to endure.
"In the war years we had a lot of aid from socialist countries. Now we must pay for everything," said Pham Khue, the 38-year-old vice director of the factory. "This year our quota is 40,000 fans. Each year since peace, it has been less and less."
This stucco and red-tiled factory complex has been buffeted by every shift in foreign and domestic policy Vietnam has made since the 1975 capture of Saigon and reunification. Like the nation, the factory has faltered during the initial years of peace without aid and, now, wars without friends.
Production plummeted as the Army mobilized for the border war with Cambodia. Then, China cut off aid and closed the border. Southerners have balked at economic integration with the north. Most recently, the loss of other aid has forced Hanoi to cut back on domestic consumer products -- like electric fans -- and switch to producing goods for export to the Soviet Union.
Nothing stuns a new visitor to northern Vietnam and Hanoi more than the grinding poverty. The frail bodies, the tattered clothing, the dilapidated buildings and the scarcity of everything from meat to medicine is not what one expects in the capital of a legendary military power and the third largest Communist country.
Much of this poverty is new. "I know this doesn't make sense at first. I didn't understand it," said a Western resident of Hanoi. "But you could watch it through Tet [the Asian lunar New Year]. Each year, the table has been more meager. In 1976, the Tet was incredible: meat, fish, sweets, everything you could want. Last year, it was nothing. Some people didn't have rice."
The roots of this poverty are difficult to discover. While 1978 was the year of Vietnam's best rice crop in history (13 million tons), it cannot offset this year's food shortage, which is considered the worst Vietnam has faced, according to Le Vinh, vice director of the economic institute of the Commission for Social Science of Vietnam.
"You could say we can feed our own people this year because we produced all we need: 12.5 million tons. But we can not feed the people," he said. "We had to put our rice to other uses."
The other uses, he said, were raising livestock and feeding Vietnam's army stationed in Laos, Cambodia and along the norther border. "Now we have to give more food and spend greater amounts on the military. More of our foreign currency is reserved for the military," said Le Vinh. "The army takes the trucks we need for transportation and the labor we need to build up agriculture, every sector of the economy."
During the last war, American aid to the south and Soviet or Chinese aid to the north insured that the Vietnamese were fed regardless of the demands of their armies. But vietnam's new wars with Cambodia and China have not won it new aid grants from sympathetic states.
On the contrary, these wars are not ideological clashes between the United States and Asian nationalists, but wars among communists, and a number of Western nations suspended their assistence. Aid is now roughly one fourth the amount received by Saigon and Hanoi during their war.
Vietnam now depends largely on its own resources to feed the people and this has not worked. Hanoi has failed to assert complete control over the south and the two economies often work at cross-purposes. The farmers work at cross-purposes. The farmers of the fertile Mekong Delta in the south refuse to sell most of their rice to the government, Le Vinh said, and instead market it through private entrepreneurs who pay them higher prices.
The Vietnamese argue persuasively that the loss of Western aid, particularly American help after 1975, made them vulnerable to the economic pressures of the Sino-Soviet split.
"After 30 years of war out standard of living wasn't very high but we did not receive enough money to industrialize or to improve our people's lives," said Le Vinh. "Without more help we became short of money and we have had to carry out cooperative projects with the Soviet Union. We also have to make money immediately so we concentrated on export goods, not products for our own people."
Noncommunist countries, banks and International organizations have promised to contribute or lend $1.7 billion for Vietnam's current five-year plan. This does not begin to make up for the loss of billions of dollars in annual American aid to war-time Saigon or for the crippling effect the U.S. trade embargo has had on the southern economy. One Western businessman visiting Hanoi recently, said the embargo has idled key factories in need of American spare parts. The south has proved a drag on the north's economy, thus far, not the bonus it was to have been.
Yet foreign experts contend that China's cancellation of its aid program was the most severe setback Hanoi suffered. Until July 1978 Peking had given North Vietnam well over $10 billion over two decades. The toys, thermos jars, chopsticks, and kerosene lamps that once filled Hanoi's shops were Chinese and now the shelves are practically bare. Also gone are the Chinese aid projects to build up the industry, roads and bridges Vietnam so needs. Moreover, the problems with China led to the exodus of ethnic Chinese from the north. These people were key in the coal mining, fishing and manufacturing fields and with their departure there was a marked decline in all three sectors.Altogether, the economic effect of the Sino-Vietnamese split has been as "catastrophic as the end of Soviet aid to China in the late 50s," said one expert.
The Reunification Electric Fan factory was closed down for weeks when China sealed its border. The turquoise plastic blades had been supplied by China and most of the other imported material was shipped down on the Peking-Hanoi rail line. "Everything stopped." said the Vice Director Khue. "We had to start all over again, looking for alternative markets for our imports and we found the prices were much higher. The factory has never recovered."
However, this reduction in aid, the problems in the south and the drain imposed by the military does not explain completely the economic disarray in Vietnam today.
Overseeing the supposed transformation from a war to peacetime economy is an aging leadership and a secretive, complicated bureaucracy that worked well in war but is a barrier in peace.
"They cannot break their habits of war," said a Western official in Hanoi. "They try their old remedies on new problems and if it doesn't work they won't change. During the war almost everything was a military secret. That isn't so now but the bureaucracy acts as if that was still true."
The party newspaper has printed editorials complaining that it takes five special signatures to buy an extra can of milk in Ho Chi Minh City.
"They continue to ask for aid because they don't know how to structure a planned economy and they don't seem to care, "complained an East European expert in Hanoi. "It's worse for socialist countries to trade with Vietnam than a capitalist because they keep asking us for aid, more aid, more favorable conditions."
A more sympathetic noncommunist diplomat partially agreed: "They can respond to a catastrophe but they cannot plan for a coordinated economic transformation. You try to find a national plan. It doesn't exist."
The notion that the Vietnamese, especially the northerners who successfully expelled the Japanese, French and Americans from the country, could not turn their discipline and energy to the economy seemed improbable. But a visit to Bai Bang, a controversial $400 million paper mill complex under construction as a Swedish aid project, clarified what these experts meant.
The problebms are worth examining because they are peculiar to the postwar economy of Vietnam, which the Swedes have observed closely for the past four years.
The difficulties they encountered began with the discovery that wages are calculated, in part, by the size of a construction project, a system the Vietnamese used during the war to get buildings and fortifications thrown up in a hurry. "That made sense during the war but you can imagine what it meant for the fine detail-work. Nobody wanted to do it," said Mats Hadell, a project spokesman.
This year, the factory has been hit with a problem Westerners find difficult to comprehend: chronic absenteeism because workers have had to search for food for their families.
Astonishingly in this land of unemployment in the south and underemployment in the north, the Swedes complain of a constant lack of manpower. "We were promised a crew of 6,000 workers to build the plant and we've never had more than 2,000 at a time," said a spokesman. The small size of the work-force reflects the unwillingness of the Vietnamese to move to this new community northeast of Hanoi-one with far better facilities than a new economic zone which, among other things, are designed to increase self-sufficiency-and the effect of Vietnam's military draft.
Extravagant with praise for the Vietnamese ability to master a skill, the Swedes say, however that their success at training ultimately works against the project. Of the 150 welders trained at Bai Bang all but 50 have been conscripted into the Army. "I suppose that is to be expected in a country threatened by war," said one of the Swedish experts.
Demobilized veterans are assigned to Bai Bang as a reward and the Swedes have discovered that their military experience does not train them for work in a modern factory.
"It may sound good, getting veterans to work but these fellows weren't in a Western army with discipline and coordination. They were much more on their own. I have to teach them how to cooperate," said Hans Lagerhorn, whose task is to train a fire brigade for Bai Bang.
Lagerhorn's experience was similar to stories told by others working with Vietnamese. His biggest problem has been teaching the Vietnamese to respect new equipment and maintain it. "During the war there was no way to order spare parts and keep up their equipment. Now they have no idea how to keep something going. They use the water in the fire truck until it is empty. They drive the truck into town to buy vegetables. In one and a half years they have driven the truck as much as a Swede would in six years."
This attitude embedded in the national psyche may explain why, as one diplomat in Hanoi said, "They don't have confidence yet that their military goals have been achieved, or that the fatherland is free from real or imagined threats. Economic development cannot flourish without confidence. They'll remain hostages to the Soviet Union until they feel secure."
Economic hostage, in the view of that diplomat, means that Vietnam must gear its production toward the Soviet market, which it has done for the past several years and especially since the signing last year of economic and friendship treaties with the Soviet bloc. Plastics, medicines, rugs, textiles and handicrafts are produced in Vietnam for immediate delivery to the Soviet Union.
To pay back grants and aid, Vietnam has become a source of cheap labor to the Soviet Union. "Almost nothing is free from the Russians," explained one expert familiar with Soviet military and economic aid to Vietnam.
Some U.S. officials say Soviet aid to Vietnam rivals that of the U.S. Marshall Plan for Europe, after World War II. The Soviet contribution of 2 billion rubles ($2.9 billion) to Vietnam's five-year plan is a loan, not aid. The factories built in the south during the war now produce cloth for the Soviet market from Russian-supplied material. East Germany sends chemicals to Ho Chi Minh City for the production of plastic products to be sent back to East Europe and the Soviet Union.
"We must grow accustomed to co-operation now, not aid," said Le Vinh, the economic institute expert. "We established a commission for the co-operation between Vietnam and the Soviet Union for fisheries this year... It means Russian boats are allowed to fish in Vietnamese waters as long as they share their yield."
Since the war's end it has been almost impossible to buy a hand-woven rug in Vietnam, according to longtime Hanoi residents. They are all earmarked for export to the Soviet Union. At a rehabilitation center for prostitutes in Ho Chi Minh City, the young women were busy hand-embroidering silk bedspreads for export to the Soviet Union.
Excluded from most Western aid programs. Vietnam has had to sacrifice economic development for its military programs. The Soviet Union supplies military equipment and, reaps its rewards in the form of consumer goods from Vietnam. It is a common cycle in the developing world; it is unexpected in Vietnam.