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Forty Years Ago, April 30, 1975.
Forty Years Ago, April 30, 1975.
Who Won the Vietnam War?
April 1975 marks the official end of the Vietnam War. Yet today,
Vietnam is an impoverished countries. The Hanoi government is a US proxy
regime. Vietnam has become a new cheap labor frontier of the global
economy. Neoliberalism prevails.
In a bitter irony, Vietnam which was a victim of US war crimes
has become a staunch military ally of the US under Obama’s “Pivot to
Asia” which threatens China.
In 1994, I undertook field research in Vietnam with the support
of Vietnam’s Ministry of Agriculture, which enabled me to visit and
conduct interviews in rural areas in both the North and South.
This article was written twenty years ago, initially published on
April 30th 1995 in the context of the 20th anniversary of the
Liberation of Saigon. A more in-depth analysis focusing on Hanoi’s neoliberal reforms was subsequently published as a chapter in my book, The Globalization of Poverty, first edition 1997, second edition, 2003.
Michel Chossudovsky, April 17, 2015
On April 30, 1975, the Vietnam War ended with the capture of Saigon
by Communist forces and the surrender of General Duong Vanh Minh and his
cabinet in the Presidential palace. As troops of the People’s Army of
Vietnam marched into Saigon, U.S. personnel and the last American
marines were hastily evacuated
from the roof of the U.S. embassy. Twenty
years later a fundamental question still remains unanswered: Who won
the Vietnam War?
Vietnam never received war reparations payments from the U.S. for the
massive loss of life and destruction, yet an agreement reached in Paris
in 1993 required Hanoi to recognize the debts of the defunct Saigon
regime of General Thieu. This agreement is in many regards tantamount to
obliging Vietnam to compensate Washington for the costs of war.
Moreover, the adoption of sweeping macro-economic reforms under the
supervision of the Bretton Woods institutions was also a condition for
the lifting of the U.S. embargo. These free market reforms now
constitute the Communist Party’s official doctrine. With the
normalization of diplomatic relations with Washington in 1994, reference
to America’s brutal role in the war is increasingly considered untimely
and improper. Not surprisingly, Hanoi had decided to tone down the
commemoration of the Saigon surrender so as not to offend its former
wartime enemy. The Communist Party leadership has recently underscored
the “historic role” of the United States in “liberating” Vietnam from
Vichy regime and Japanese occupation during World War II.
On September 2, 1945 at the Declaration of Independence of Ba Dinh
Square in Hanoi proclaiming the founding of the Democratic Republic of
Vietnam, American agents of the Office of Strategic Services (OSS, the
predecessor of today’s CIA) were present at the side of Ho Chi Minh.
While Washington had provided the Viet Minh resistance with weapons and
token financial support, this strategy had largely been designed to
weaken Japan in the final stages of World War II without committing
large numbers of U.S. ground troops.
In contrast to the subdued and restrained atmosphere of the
commemoration marking the end of the Vietnam War, the 50th anniversary
of independence is to be amply celebrated in a series of official
ceremonies and activities commencing in September and extending to the
Chinese NewYear.
Vietnam Pays War Reparations
Prior to the “normalization” of relations with Washington, Hanoi was
compelled to foot the bill of the bad debts incurred by the U.S.-backed
Saigon regime. At the donor conference held in Paris in November 1993, a
total of nearly $2 billion of loans and aid money was generously
pledged in support of Vietnam’s free market reforms.
Yet immediately after the conference, a secret meeting was held under
the auspices of the Paris Club. Present at this meeting were
representatives of Western governments. On the Vietnamese side, Dr.
Nguyen Xian Oanh, economic advisor to the prime minister, played a key
role in the negotiations. Dr. Oanh, a former IMF official, had been
Minister of Finance and later Acting Prime Minister in the military
government of General Duong Van Minh, which the U.S. installed 1963
after the assassination of President Ngo Dinh Diem and his brother(f.2).
Dr. Oanh, while formally mediating on behalf of the Communist
government, was nonetheless responsive to the demands of Western
creditors.
The deal signed with the IMF (which was made public) was largely
symbolic. The amount was not substantial: Hanoi was obliged to pay the
IMF $140 million (owned by the defunct Saigon regime) as a condition for
the resumption of new loans. Japan and France, Vietnam’s former
colonial masters of the Vichy period, formed a so-called “Friends of
Vietnam” committee to lend to Hanoi” the money needed to reimburse the
IMF.
The substantive arrangement on the rescheduling of bilateral debts
(with the Saigon regime), however, was never revealed. Yet it was
ultimately this secret agreement (reached under the auspices of the
Paris Club) which was instrumental in Washington’s decision to lift the
embargo and normalize diplomatic relations. This arrangement was also
decisive in the release of the loans pledged at the 1993 donor
conference, thereby bringing Vietnam under the trusteeship of Japanese
and Western creditors. Thus twenty years after the war, Vietnam had
surrendered its economic sovereignty.
By fully recognizing the legitimacy of these debts, Hanoi had agreed
to repay loans that had supported the U.S. war effort. Moreover, the
government of Mr. Vo Van Kiet had also accepted to comply fully with the
usual conditions (devaluation, trade liberalization, privatization,
etc.) of an IMF-sponsored structural adjustment program.
These economic reforms, launched in the mid-1980s with the Bretton
Woods institutions, had initiated, in the war’s brutal aftermath, a new
phase of economic and social devastation: Inflation had resulted from
the repeated devaluations that began in 1973 under the Saigon regime the
year after the withdrawal of American combat troops(f.3). Today Vietnam
is once again inundated with U.S. dollar notes, which have largely
replaced the Vietnamese dong. With soaring prices, real earnings have
dropped to abysmally low levels.
In turn, the reforms have massively reduced productive capacity. More
than 5,000 out of 12,300 state-owned enterprises were closed or steered
into bankruptcy. The credit cooperatives were eliminated, all medium
and long term credit to industry and agriculture was frozen. Only
short-term credit was available at an interest rate of 35 percent per
annum (1994). Moreover, the IMF agreement prohibited the state from
providing budget support either to the state-owned economy or to an
incipient private sector.
The reforms’ hidden agenda consisted in destabilizing Vietnam’s
industrial base. Heavy industry, oil and gas, natural resources and
mining, cement and steel production are to be reorganized and taken over
by foreign capital. The most valuable state assets will be transferred
to reinforce and preserve its industrial base, or to develop a
capitalist economy owned and controlled by Nationals.
In the process of economic restructuring, more than a million workers
and over 20,000 public employees (of whom the majority were health
workers and teachers) have been laid off(f.5). In turn, local famines
have erupted, affecting at least a quarter of the country’s
population(f.6). These famines are not limited to the food deficit
areas. In the Mekong delta, Vietnam’s rice basket, 25% of the adult
population consumes less than 1800 calories per day(f.7). In the cities,
the devaluation of the dong together with the elimination of subsidies
and price controls has led to soaring prices of rice and other food
staples.
The reforms have led to drastic cuts in social programs. With the
imposition of school fees, three quarters of a million children dropped
out from the school system in a matter of a few years (1987-90)(f.8).
Health clinics and hospitals collapsed, the resurgence of a number of
infectious diseases including malaria, tuberculosis and diarrhea is
acknowledged by the Ministry of Health and the donors. A World Health
Organization study confirmed that the number of malaria deaths increased
three-fold in the first four years of the reforms alongside the
collapse of health care and soaring prices of antimalarial drugs(f.9).
The government (under the guidance of the international donor community)
has also discontinued budget support to the provision of medical
equipment and maintenance leading to the virtual paralysis of the entire
public health system. Real salaries of medical personnel and working
conditions have declined dramatically: the monthly wage of medical
doctors in a district hospital is as low as $15 a month(f.10).
Although the U.S. was defeated on the battlefield, two decades later
Vietnam appears to have surrendered its economic sovereignty to its
former Wartime enemy.
No orange or steel pellet bombs, no napalm, no toxic chemicals: a new
phase of economic and social destruction has unfolded. The achievements
of past struggles and the aspirations of an entire nation are undone
and erased almost with a stroke of the pen.
Debt conditionality and structural adjustment under the trusteeship
of international creditors constitute in the aftermath of the Vietnam
War, an equally effective and formally nonviolent instrument of
recolonization and impoverishment affecting the livelihood of millions
of people.
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