23 Aug 2018
Can Vietnam’s Doi Moi Reforms Be an Inspiration for North Korea?
By Huong Le Thu
North Korea’s future remains one of the biggest questions of current world politics. Not only because of the complexities related to denuclearization, but also, and potentially even more challenging, because of unprecedented questions on how to integrate a long-term rogue regime into the international system. This includes normalization of its economy and politics. The “Vietnam model” has become a popular proposal. Secretary of State Mike Pompeo explicitly suggested that when he last visited Pyongyang and Hanoi in July 2018.1 The interested party himself, Chairman Kim Jong-un, reportedly mentioned Vietnam as an inspiration.2 Kim is also showing more interest in the economic development of his country, increasing visits to factories, farms, and construction sites.3 More informal and people-to-people level exchanges with South Korea, ranging from sports engagement4 to family reunions,5 also suggest a growing appetite for some sort of normalization. Indeed, there are a number of parallels that can be drawn. But more importantly, there are differences that illustrate how North Korea may refer to some inspirations from Vietnam, but will ultimately need to invent its own path, tailored to its unique situation. This article explains how Vietnam pursued reforms and points out major differences between Vietnam thirty years ago, when it embarked on the Doi Moi, and a tentative future for North Korea when it finally opens up.
Vietnam’s economic success over the past three decades of average annual growth rate at 6.7% (it scored around 2.6% before Doi Moi) puts it among the most attractive investment markets in the region. With its active trade and diplomatic network,6 few would remember that Vietnam’s integration with the world is fairly new—or, in fact, that it was once also labelled a “rogue state,” whose “domino effect” presented a threat not only to the whole region, but would impact the world.7 For Hanoi, conditions for normalization were also a sum of understandings among the great powers, but the transparency around those conditions, as well as global attention was on a much lower level.8 The conditions included withdrawal of troops from Cambodia, as Vietnam had been involved in a border war that was a repercussion of the complexities of great power politics, decolonization, and extreme ethnic violence from the Khmer Rouge.
Unlike Vietnam, the Koreas have been separated for much longer, still in a de facto state of war and lingering hostility. More importantly, economic transformation for North Korea would require some ideological compromise to happen in the first place. While Kim seems to be much less focused on ideology than his father and grandfather, his interests in power and regime survival might prompt him to challenge the impossible. After all, he has quite remarkably engaged with major powers thus far. In fact, the unexpected turn of events made North Korea a desirable partner, pursued by the United States, South Korea, and also Japan. The “free world” seems open to negotiations and ready to go the extra mile to accommodate Pyongyang’s still, hypothetical “opening-up”—something that Vietnam did not have the luxury of assuming.
Despite the failure and abandonment of the mission to stop communism in Vietnam, after 1975 the United States and the Western World isolated it through economically and diplomatically.9 With souring relations with China, evolving conflict with Cambodia, and the collapse of the allied Soviet Union, Vietnam stood alone facing hostility and distrust from its direct neighbours and neglect from the international community. On top of that, the country continued to struggle with its badly managed, post-war economy, which eventually prompted Hanoi to pursue drastic reforms. Inspired by China’s Deng Xiaoping reforms in 1978 as well as the Soviet Union’s perestroika and glasnost, Vietnam came up with its own version, called “Renovation” (Doi Moi), often also referred to as “opening doors.” The Doi Moi reforms were introduced in 1986 and remain the most important and so far the only, comprehensive set of socio-economic and political reforms that have set the course of the country’s development. In 1988, there were some three million people near starvation and another five million malnourished. That was one of the grimmest periods in Vietnam’s contemporary history—not only was it ostracized by the West, but it also suffered from hostilities within its fraternal camp of socialist brothers. Domestic economic crisis pushed Hanoi to embrace market economy, which not only resulted in opening up to international integration, but also redefined its worldview and set new goals for the country’s foreign policy. The Doi Moi was hence an outcome of pressing domestic economic factors combined with international changes. The Vietnamese Communist Party has retained stable control with rather unlikely prospects of any drastic changes in the medium future.
While overall, the effect of the Doi Moi reforms has been positive, they were not a response to all persisting issues. These include economic restructuring, in particular solutions to agricultural collectivization and land reforms from the 1950s until the late 1980s—issues with which even successfully transforming Vietnam has been struggling. Land management remains one of the most sensitive and weakest links in Vietnamese reforms.10 Poor integration between agriculture and industry has also left lasting challenges to productivity and efficiency in the economy. Despite early successes, Vietnam is currently facing the challenge of the middle-income trap and even stagnation.11 Without adequate policies and effective implementation thereof, the Vietnamese economy will gradually lose its competitiveness as its labor force and manufacturing costs rise higher than those of other developing markets, while its innovation and value-added production is insufficient to compete with more advanced economies in the region. In fact, a number of analysts in Vietnam have been arguing for an updated Doi Moi (Doi Moi 2.0.) which would be better tailored to the current environment, rather than emulating the successes of three decades ago.12 The driver behind the Doi Moi 2.0. debate is to transform Vietnam into a real modern and industrialized economy, prepared for technological competition.
For North Korea, harboring similar ambitions about a prosperous future with multiple trade and foreign policy options without giving up its regime may already sound like a good model. But there are significant differences in the two scenarios that present major obstacles for Pyongyang to pursue a Doi Moi-like path. The principal one is the fact that Vietnam’s reintegration with the world was a result of actually complying with the order that emerged after the end of the Cold War.13Despite preserving communist rule, Vietnam transformed itself into a responsible actor, an active participant in the international system, and a supporter of Western international law and norms. While North Korea’s intentions remain unclear, prospects of its compliance with the international system remain remote—and this is its strongest bargaining chip. Further, North Korea has a bargaining chip that Vietnam did not have—nuclear weapons—as well as China’s backing (thus far). Vietnam had no one else to whom to turn; the effect of economic sanctions and diplomatic isolation became unbearable, particularly when the Soviet Union was on the verge of collapse and relations with China were strained by the border war. Vietnam was exhausted coming out of decades of bombing and bloodshed, impoverished and on the brink of famine. At the time of normalization, it presented no real threat when it opted for integration with the world. With the collapse of the Soviet Union, the possibility of Vietnam further contributing to the spread of communism was over. While North Korea remains poor, it has maintained its trading activities with China and appears easily able to revive them with South Korea; and unlike Vietnam, it has had much more time to recover since the end of war activities in 1953. Even if there are parallels in the shock it felt from the abrupt shift in Soviet foreign policy leading to a sharp economic downturn, the question is whether North Korea is facing a similar urgency to transform.
Vietnam was also isolated for a much shorter time than North Korea, which allowed it an easier path to catch up. North Korea’s isolation and embargoes have also been much more severe than what Vietnam suffered; even under active sanctions, Vietnam’s education and scientific cooperation continued with the Eastern bloc. The North Korean people have been locked out not only ideologically, but also in a “time capsule” with much more restricted exchanges with the external world. Even at the peak of its ideological revolution, Vietnam was never nearly as repressive as the North Korean regime has been. And timing matters. Vietnam caught the wave of globalization in the 1990s, whereas North Korea would face an increasing trend of “anti-globalization.”14 Hanoi’s normalization of ties with China and the United States and its accession to ASEAN and APEC in the 1990s—enabling it to access the WTO in 2007 and other economic and political architecture—happened at the time of global economic integration and proliferation of trade and multilateralism. It was the time of inclusivity. At the moment, there are strong anti-globalization sentiments from the United States and the EU—a trend that is going in the opposite direction of disintegration and withdrawal from existing commitments. It is a challenging time for multilateralism and inclusiveness, when inward-looking tendencies demand domestic priority.
In terms of domestic differences, a key one is the organization of power. The governance of the Workers’ Party of Korea (WPK) and the Vietnamese Communist Party (VCP), despite both being depicted as communist regimes, is vastly different. While North Korea is run in a dynastic manner, the VCP has been faithful to the institutionalized collective leadership. There has never been a dynastic succession of power in Vietnam, and in fact, even the most charismatic leader of the Party and its founder—Ho Chi Minh—revered as the founding father of independent Vietnam, never enjoyed such absolute power within the Party as fellow communist leaders: the Kim family, Mao Zedong, or Josef Stalin in their respected parties. Vietnam’s leadership is divided into four key pillars: The Party—with the party secretary general (currently Nguyen Phu Trong); the head of the state—the president (currently Tran Dai Quang); the head of government—the prime minister (currently Nguyen Xuan Phuc); and the head of the legislative system—the chairperson of the National Assembly (currently Madam Nguyen Kim Ngan). The political system and its elites are distant to the citizens—also an effect of post-Doi Moi modernization, when social life grew increasingly free from Party control. The majority of citizens are not able to name the leaders by name and confusion is rather intrinsic. More importantly, many Vietnamese express openly their disinterest in politics, and it is common for them to hold critical views about the politicians. This is something unimaginable in North Korea. Moreover, little is known about the format of the WPK’s operations. The VCP holds periodic meetings, be it on the local or national level, plenums and national congresses. Every five years the leadership is subject to change through the process of inter-Party voting—a process that while restricted to an external observer, has in the recent years gained increasing attention from domestic and international media.15That means for Vietnam, the Party and the system work and are designed to prevail despite the lack of a key central leader.
The Vietnamese government would be keen to see its experience as a point of reference for North Korea, believing that this would be a contribution to the world it could make. It would not only reaffirm that its policy is a success for itself, but that it could be a model to other countries. A reformed and normalized North Korea would also mean another partner rather than a threat in the region. Moreover, it could also create a new role for Vietnam—a bridge between the opening North Korea and the rest of the world, perhaps even a mediator gaining increasing comfort in talking to the United States, but also sharing some empathy with a country like North Korea, which wants to maintain continuity in its regime.
Like any “model,” a framework provides a useful point of reference—and for North Korea, the Vietnam case might be the closest one. But its path of, hopefully, opening up, would need to be tailored to its own realities. Given the above-mentioned differences, North Korea will need to invent its own solutions, Thus, the entire reorganization of its economy is likely to take Pyongyang a much longer time. For North Korea, the path forward is, arguably, even more challenging. Not only does it have to respond to similar challenges of reinventing its collectivization system, which has been much longer in place, it will face even stronger pressure of both catching up and making a “leap forward” responding to current conditions in the global market.