China is so vast that its version of communist capitalism rumbles along in juggernaut faashion, but in relatively tiny Vietnam the tensions and breakdowns that are more or less guaranteed by the attempt, economically, to have it both ways are more difficult to conceal. Inflation is making food unaffordable to many, and one vast state-run entity, Vinashin, is hemorrhaging debt. But foreign investors remain optimistic, and the economy is growing at an annual rate of 7%. 

Still, many foreign investors say they are betting that Vietnam’s legendary work ethic and a history of overcoming adversity will help it get past its latest setbacks.

“There’s no way you can understand Vietnam unless you can see the frenetic activity and the happiness that’s here,” said Peter Ryder, the chief executive of Indochina Capital, an investment company. “It’s one of the reasons the government gets away with its incompetence. After 100 years of war and starvation, people never thought life would be this good.”

Double-digit inflation is indeed preferable to war.

Drop me a line at rjk@dailyblague.com
This entry was posted on Monday, January 10th, 2011 at 10:30 am.