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At the very least, investors in hard assets, are in for a long haul. Vietnam's booming economy, however, is also attracting portfolio investors to its young stock and bond markets. Among those actively investing are foreign managed funds, like the Vietnam Opportunity Fund, a US$560 million closed-end fund listed on the London Stock Exchange, and the Dublin-listed US$200 million-worth Vietnam Growth Fund. We do not know of any funds considered as Socially Responsible Investments that have descended on the Vietnamese stock exchange.
The local equity market entered the radar of most international investors when Spencer White, the chief regional strategist for Merrill Lynch, wrote a report in February that became the oft-quoted confirmation of the growth prospects of the listed local companies. White described Vietnam as "a 10-year buy," and urged his readers to "buy equity exposure now, for your fund, for yourself, or for your children." 19
There are fears that these markets are rising for an eventual fall. Investor enthusiasm has pushed total market capitalization of the 106 listed shares to US$9.2 billion, which considering a base of only US$510 million a year earlier, translates to a whopping 1,665 percent increase. The number of listed companies grew from 30 to 106, of which 49 new listings were transacted in December alone.20 There has been limited information on earnings for these new listings which used to belong wholly to the state. For years, these companies were under no obligation to publish nor ever had the discipline for financial information disclosure. No wonder buyers of their stock had few ways to gauge company performance or whether an investment was sound. Although some websites track the prices of popular stocks, reliable market data is nonexistent. In other words, there is no certainty that the current prices are fair. Local investors, majority of them neophytes, depend mostly on gossip and hope that what goes up will continue to go up. 21
Underlying this stock market boom has been the sale of state assets, since 2000. As many as 3,600 state-owned companies have been partially privatized. Company shares were sold to employees, managers, and the public who then sold them either on-line or directly to families and friends. Rapid privatisation in Russia led to a 'grab what you can' culture and the generation of a new class of billionaire oligarchs that moved money out of the country with damaging impacts on the nations economy and employment. The social dislocation and injustices that followed needs to be recalled when we reflect on the current changes in Vietnam. Will the country manage its transition in a more socially just manner?
The answer may lie in the shifting values of modern Vietnam. The country is not just changing economically; it is also changing socially, with traditionally conservative attitudes gradually breaking down. As a booming economy creates more middle class, these people would eventually demand greater freedoms. And the youth-those aged 25 and below, who account for half of the population-enjoy the spoils of economic freedom are, for the time being, not questioning the reign and rule of the Communist Party. As things are changing very fast in Vietnam, the Communist Party would have to continuously demonstrate that it could answer the questions to be posed by an increasingly capitalist society.
The current officials who had lived through the wars and the hardships that followed tend to adopt the "strict father" model of George Lakoff, 22 which refers to the tendency to discipline "kids" or build a controlled mechanism in order to mold them to become self-reliant and obedient adults. This could be gleaned from how freedoms of speech, association, religion and the media are all still sharply curtailed. 23
But technology, specially the internet, has provided a venue for those who want to wiggle out of these controls and explore freedoms that those in a "nurturing parent" system 24 would typically enjoy. At some point, the ruling Communist Party will face a choice about whether the best way to deal with them is to pursue greater openness or ever-tighter control.
The underground movement of bloggers and citizen journalists known as Free Journalists Association of Vietnam (FJAV) has started to assert independence by gathering and disseminating news which they publish on their website. These are the stories that would be typically censored by the government, which remains a one-party state and typically does not tolerate opposing views. Every single publication in Vietnam, whether it is a newspaper or a magazine about interior design or golf, has to be registered with a Communist party organisation. Predictably, many of the FJAV activists have been interrogated and detained. 25
However, in a surprising effort to reach out to the techno-savvy citizens, in December former deputy prime minister, Vu Khoan, hosted the-and engaged in an-on-line chat to discuss expectations as far as Vietnam's accession to the WTO is concerned. It wasn't exactly exciting since it was not a live chat. All questions had been screened and sent beforehand, plus the discussions stayed on safe political ground. 26 Nonetheless, the fact that it happened at all shows that Vietnam's communist rulers are trying to demonstrate that they are listening to the people.
How willing or prepared the leaders are to go beyond mere lip service will be further tested as foreign investors and the growing middle class, we may hope, continue to push for aspects of good governance, such as transparency and accountability, both in public and private arena.
19 Financial Times (2006) Investors increasingly enthusiastic for Vietnam's growth story, May 3rd http://search.ft.com/ftArticle?queryText=vietnam&y=0&aje=true&x=0&id=060503000559&page=15
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