Vietnam: The Final Battle

by John Pilger

Covert Action Quarterly, Spring 1998

I returned to Vietnam in the winter of 1995. Hanoi presented a strange hybrid. The Odeon arcades, the avenues and villas and the replica of the Paris Opera, in which the French colons amused themselves with Berlioz and Bizet were only slightly more decrepit. In the crowded Old Quarter, little had changed; there was still a sense of what Victorian England might have looked like: beneath the slate-grey skies diminutive houses huddled over open drains in crooked streets and the air was thick with sweet-smelling smoke from wood-burning braziers.

Tiny parlors were filled with people swathed in scarves, sipping green tea drawn from large floral-painted flasks while sepia figures in mandarin dress looked down from oval frames. Almost everywhere there was a cluster of military medals and a photograph of a lost loved one.

Normality graced with laughter has a certain excitement here. Laughter drew me to one house where a wedding party was in progress, and I was invited in by Thuan, age 28, and his bride, Hong, 24. He is a dog-meat salesman, she a "flower girl": that is, she ekes out a living by selling single stems on the streets. They and their family and friends looked deceptively prosperous gathered in the small courtyard beneath a canopy made from an American parachute. There were pots of steaming noodles, sweets and betel nuts; and the bridesmaids wore shocking pink. The groom giggled, the bride cried, and we were all invited to inspect the marital bed.

Nearby, Nguyen The Khan, a venerable artist who speaks Chinese, French and English, sat like an old bird in his impossibly crowded loft, cigarette drooping, working on a series of lacquer panels. They show Hanoi in the mid-19th century before the French built their scaled-down copies of Paris and destroyed the ancient landmarks: the Princess Huyen Tran Temple, the Jade Mountain Pagoda, the Subdued Waves Pavilion.

"What work would you like to do before you die?" I asked him.

"Something that announced true peace," he said, "A tranquil life ... that's all. We are still not at peace; we are in a dilemma now."

Rising above us were the symbols of this dilemma: some of the most spectacularly ugly buildings on earth, made from black glass and slab concrete, shaped like clothes pegs, the inspiration, clearly, of the same Thai school of "architecture" whose monstrosities join up the power lines in the deserts that have replaced Thailand's teak forests.

Nguyen The Khan and other residents of the old quarter had marched on the City Hall to complain about them and the corruption that often smoothed the way for planning permission. In these buildings reside the high commands of corporate Japan, Korea, Hong Kong, Singapore, the United States, Australia and the City of London, who are changing almost everything in Vietnam. As one American banker put it, "The circus is back in town."

To those who knew Vietnam during the war, the familiarity of the circus is almost other-worldly In a bar on the corner of "Duong Chien Thang B-52" (Avenue of the Victory over the B-52) was Joe, a former US helicopter pilot, who runs a fleet of corporate jets flying in American businessmen, many of them from companies that profited hugely from the war. Nearby are the new offices of a pillar of the war, the Bank of America. When the bank's burglar alarm went off one evening, people gathered, wondering what it was. No one seemed to know, because no one robs banks in Hanoi. Not yet.

The teahouse opposite has been renamed the "No Noodles Sandwich Bar " The Marlboro Man covers its walls, and the old woman darting through the beaded curtain wore a red Marlboro baseball cap and a T-shirt with a picture of the Marlboro Man. At a stroke, she had surrendered her dignity: a metaphoric warning for her country.

Marlboro and Dunhill have claimed Vietnam, where the majority seem to smoke. Foreign tobacco companies were among the first to return, and now turn out cigarettes with a high tar content. Marlboro's advertising concentrates on its "macho image," long discredited in the West. The cowboy with a cigarette in his mouth, the one who died from lung cancer, has been replaced by images of young, muscle-bound lads winning the girls, while real lads, with stick-thin arms and rotten teeth, are given red caps too big for them and lent a Honda and paid in cigarettes for selling Marlboros to teashops. Such is the reality of what is called "Renovation. "

Revenge, Renovation and Recolonization

"Renovation," or Doi Moi, was conceived in collective desperation. The catastrophe wreaked in Vietnam by the US invasion was to be multiplied in the years that followed a cease-fire signed in Paris in 1973 and which, said Secretary of State Henry Kissinger, would bring "peace with honor."

A cornerstone of the cease-fire agreement was a secret promise by President Nixon of $3.25 billion in reparations, contained in a letter to Pham Van Dong, prime minister of the Democratic Republic of Vietnam ("North Vietnam"). Dated February 1, 1973, the letter remained secret for more than two years, until after the war was finally over, when the Vietnamese showed it to a group of visiting US Congress members.

The State Department confirmed its authenticity Eight, single-spaced pages specified the forms that the US "reconstruction grant" would take. Most of it would be spent in the United States; American firms would tender for contracts to build industrial plants and to restore bombed bridges, railway lines, dams, and harbor facilities. "We knew," a Vietnamese government minister confided later, "that without that minimum capital, we could never rebuild the country and remain independent.

Not a cent was paid. On April 30, 1975, the last day of the war, the US Treasury

Department froze Vietnamese assets of $70 million. Two weeks later, the Commerce Department classified Vietnam a "Category Z" country, requiring all exports to be approved by the State Department. This applied to foreign subsidiaries of US companies. The World Bank was frightened away, suspending a grant for an irrigation scheme that would have increased food capacity.

From 1981, under the Trading with the Enemy Act, a legacy of the First World War, US voluntary agencies were denied export licenses for humanitarian aid to all of Indo-China: Vietnam, Cambodia and Laos. The first aid to be banned included modest amounts of seed-processing and storage equipment, which Oxfam America had promised to an agricultural co-operative in Vietnam, together with help in setting up a small bee-keeping co-operative designed to supply honey as a food supplement to pre-school children.

Revenge was the policy Washington's allies joined in. In 1979, the new British prime minister, Margaret Thatcher, persuaded the European Community to halt its regular shipments of milk to Vietnamese children. As a consequence, the price of a kilo of milk powder in Vietnam rose to ten times the price of a kilo of meat. During visits in 1975 and 1978,1 saw many children with distended bellies and fragile limbs in the towns as well as the countryside. According to World Health Organization measurements, one third of all infants under 5 so deteriorated following the milk ban that the majority of them were stunted or likely to be, and a disproportionate number of the very youngest were reportedly going blind because of a lack of Vitamin A.

In Hongai, a coal-mining community on the Gulf of Tonkin, which claims the distinction of the most bombed town in Vietnam-during 1966, US carrier-based planes bombed it from seven in the morning until five in the evening-Dr. Luu Van Hoat told me that 10 percent of the children were deaf. "Although they lost their hearing during the raids," he said, "they lived. It was a sign of hope. Now we are losing the next generation to malnutrition. The situation is straightforward; children need milk to live, and we don't have it."

Among Washington's demons, not even Cuba was subjected to such a complete embargo. "We have smashed the country to bits," wrote Telford Taylor, chief US prosecutor at the Nuremberg trials, "and [we] will not even take the trouble to clean up the blood and rubble. Somehow we have failed to learn the lessons we undertook to teach at Nuremberg. "

There seemed hope in 1978. The Vietnamese Government made contact with the Carter administration, seeking "normalization." No conditions were sought; no mention was made of the $3.25 billion pledged by Nixon. The foreign minister at the time, Nguyen Co Thach, a humane and conciliatory man, flew to New York and waited a week in a room at the Holiday Inn on 42nd Street for a promised call from Richard Holbrooke, the assistant secretary of State.

"He assured me our countries would have an 'historic reconciliation,'" Thach told me. "Those were the words he used. But it never happened. I never got the phone call. Other developments were overtaking us. That summer China had become the big interest in Washington. Deng Xiaoping had been to the US and worn a cowboy hat. No one seemed to be bothered that China was then backing Pol Pot in Cambodia, whose forces had been attacking us for over a year. On the contrary, when we counter-attacked [Christmas Day 1978] and drove the Khmer Rouge into Thailand, the new allies, China and America, made us the pariahs."

No Good Deed Goes Unpunished

In January 1979, the Chinese attacked Vietnam from the north. It was a massive assault by 600,000 troops, more than the Americans had deployed. China, said Peking Radio, was "teaching Vietnam a lesson." Before they were thrown back, the invaders destroyed dikes and canals that had withstood the US bombing, and most of the country's reserve stocks of rice.

A siege mentality now consumed the Communist Party leadership in Hanoi as the country descended deeper into isolation. Having cast Vietnam as an aggressor, the US under Ronald Reagan sought to justify and redeem its "noble cause" in Indochina. A United Nations blockade, engineered by the US, its Western allies and China, was mounted against Vietnamese-liberated Cambodia. At the United Nations and other world bodies, such as the World Health Organization, Pol Pot's representatives continued to speak for their victims. Two US relief workers on the Thai border, Linda Mason and Roger Brown, wrote, "The US Government insisted that the Khmer Rouge be fed ... the US preferred that the Khmer Rouge operation benefit from the credibility of an internationally known relief operation." Under US pressure, the World Food Program handed over $12 million , worth of food to the Thai army to pass on to the Khmer Rouge. "20,000 to 40,000 Pol Pot guerrillas benefited," according to Assistant Secretary of State Holbrooke.

As the threat of Pol Pot's return effectively trapped the | Vietnamese army in Cambodia, the strain on Vietnam's war-ruined economy proved intolerable. For many Vietnamese, this meant austerity, hunger, and repression: a time of bitterness. Although hundreds of thousands of war refugees were successfully returned to their land, and their villages rebuilt, many former soldiers and servants of the Saigon regime were imprisoned in extremely harsh "re-education camps," together with those who had owed no allegiance to either side. These were Vietnam's gulags.

Liberty came to be measured by your standing in the Communist Party Thousands of the newly impoverished took to the sea in boats, many of them Chinese-Vietnamese fearful of recrimination in the wake of China's invasion. They were followed by destitute farmers from the north. The Hanoi Government had agreed to an "orderly departure program" in 1979, but without the cooperation of the US this was all but impossible.

In 1986, faced with criticism from within the party and public discontent over shortages and rising prices, the old guard in the Politburo, who had led the

country for 40 years, resigned en masse. They were succeeded by a relatively youthful leadership, notably Nguyen Van Linh, "Vietnam's Gorbachev," who had led the National Liberation Front ("Vietcong"). Linh saw himself as a "pragmatist"; he had been dropped from the Politburo because of his opposition to the rapid "socialization" of the south in the late 1970s.

In December 1986, at the Sixth Congress of the Communist Party, the new leadership announced a far-reaching program of economic and social change. This was Doi Moi, "renovation." The "free market" was embraced as the means of breaking down the Western-led embargo. Since then, the Party line has been that "all people in society and all Party members should strive to amass wealth for themselves and for the nation as a whole," thereby "promoting economic growth." Nervously, however, the leadership has warned that "it will be difficult to avoid gaps between rich and poor," which if not controlled "will lead to danger and social turmoil."

Within two years the World Bank had opened an office in Hanoi, along with the

International Monetary Fund and the Asian Development Bank. They were joined by investors from Europe, Japan, Korea, Singapore, and the other southeast Asian states. The "prize," as Richard Nixon used to describe the countries of Southeast Asia, was an abundance of natural resources: coal, oil, gas, and timber. US companies, still legally prevented from trading, brought pressure on the White House. In 1994, President Clinton lifted the American embargo, and the first post-war ambassador arrived in Hanoi three years later. "United States policy," said the ambassador, "is to help Vietnam [become] fully integrated into this dynamic region."

No Dogs or Vietnamese Allowed

Alfonso L. DeMatteis, from Brooklyn, New York, is the founder of the American Chamber of Commerce in Hanoi. When we met, he was sitting in front of a furled US flag and puzzling over why no one in Vietnam seemed to bear him a grudge. He reminded me of the old Hollywood comic Jerry Lewis, though his bonhomie was limited. I noticed on his desk a copy of a letter he had written to a ministry complaining about a proposed museum that would commemorate the US bombing of Hanoi.

Having made a fortune in the construction business, much of it in Saudi Arabia, DeMatteis is making another in Vietnam. After greeting me warmly, he wanted to talk about Mother Teresa. "Mother was recently in this very town," he said. "Mother was in this very office. She stood with me and was photographed next to the [American] flag." He handed me a press release about "Mother's movements" and how his company was "accommodating Mother's local Sisters."

By this time, DeMatteis was constructing a 15-story building at Hanoi's West Lake, the Ho Tay, also known as the Lake of Mist. A place of beauty and the source of legends, like the rising of the Dragon King and the casting and ringing of a huge bell that can be heard all the way to China, it was once overlooked by grand pavilions and pagodas. A few pagodas rise out of the mist, still surrounded by the funerary monuments of 12th century monks.

People come here in the evenings and on weekends on their bicycles, pedaling all the way from the rickety streets that cling to the Red River dikes. On Sundays they hire ancient clinker-built rowing boats, and picnic in the public space soon to be occupied by the DeMatteis tower, and others like it.

"It will come complete with health club and running track," said DeMatteis. "We're fortunate; we got in early All the prime sites have gone already"

"Will the Vietnamese have use of it?"

"You've got to appreciate the rents are not cheap. In a word, John-unlikely"

"Isn't it ironic," I said, "that the foreigners Vietnam has been repelling all this century, the French, Japanese, Americans, might by other means end up gaining what they've been unable to achieve by war?"

"I don't quite get you."

"Well, you're all back.... "

"We sure are!"

"And you may end up owning the place."

"You know, I never thought of it like that. Thank you, John."

Peter Purcell is an Australian version of DeMatteis. When we met, he was building the Hanoi Club, whose annual membership fees range from $6,500 to $15,000 and which, he says, "will only work if it's exclusive." "l hate communism," he said, "but the socialism here is just right."

As an illustration, he described how, with initial capital of $10.5 million, he had already made $37 million, and he still had a vacant lot. He told me a story about a senior Vietnamese government official who had asked him, on the quiet, to teach him about stocks and shares. "They're on the verge of being ripped off," he said, "as part of their necessary education program converting them to the wonderful world of capitalism."

There Is a Specter Haunting Vietnam...

A World Bank economist, David Dollar has predicted that Vietnam will end up as "another Asian tiger." "They have made an excellent start with the necessary reforms," he wrote. These "necessary reforms" were spelled out at a 1993 meeting of the Paris Club of donors, the richest Western states and Japan, which dispense "aid" to countries with prospects of exploitation.

The Vietnamese were told that a total of $2.8 billion in "grants" and loans would be forthcoming if they "opened up" to the "free market." The state economy would have to be"downsized", public enterprises scrapped or converted to "joint ventures" with foreign I firms, and tens of thousands of public employees sacked.

There would no l longer be a place for I public services, including health and education systems that were l the envy of the Third | World. These would | be replaced by "safety | nets" dependent on "macro-economic growth." Foreign investors would be offered "tax holidays" of five years or more, along with "competitively priced" (cheap) labor. And before all this got under way, Hanoi would have to honor the bad debts of the defunct Saigon regime: in effect, pay back loans incurred by its enemy which had helped bankroll the US war.

It was as if the Vietnamese were finally being granted membership in the "international community" as long as they first created a society based on divisions of wealth and poverty and exploited labor: a society in which social achievements were no longer valued; the kind of foreign-imposed system they had sacrificed so much to escape. It seemed, wrote Gabriel Kolko in Anatomy of a War, that the Vietnam War would finally end in "the defeat of all who fought in it-and one of the greatest tragedies of modern history"

Few apart from Kolko have raised the alarm. In his subsequent book, Vietnam: Anatomy of a Peace, he pointed out that the new policies, in less than a decade, had destroyed the high degree of equity that Vietnam had achieved by the end of the war, and created a class society with divisions of wealth greater than those of India, the US, and Britain under Thatcherism.

The Canadian economist Michel Chossudovsky, a specialist in Third World issues, wrote in 1994, "The achievements of past struggles and the-D aspirations of an entire nation are [being] undone and erased.... No Agent Orange or steel pellet bombs, no napalm, no toxic chemicals: a new phase ~ of economic and social (rather than' physical) destruction has unfolded. The seemingly neutral and scientific tools of macro-economic policy constitute a non-violent instrument of recolonization and impoverishment.""

The World Bank, together with the International Monetary Fund and the Asian Development Bank, are overseeing the implementation of these "reforms." The World Bank began by rewriting the land laws, affecting two-thirds of the population. Subsistence farming, which had kept famine at bay, is being replaced by cash-cropping for export, as Vietnam is "fully integrated into the dynamic region."

Restructuring or Rollback.

District cooperatives, which supported the elementary school system, antenatal clinics and emergency food stores, are being phased out. These have no place in the new order. In order to be "competitive," rice, the staple of more than 70 million people, is now linked to the depredations of the world market and sold below the world price. While the World Bank lauds Vietnam's "rice surplus," buried in the jargon is the implicit acceptance that famine has returned.

Where farmers in difficulty could once depend on rural credit from the state ("interest" was unknown), they now must go to private lenders, the usurers who once plagued the peasantry. This was the system under the French; peonage was the result. In its report, Viet Nam: Transition to the Market, the World Bank welcomed this change, explaining that it would cause the desired "greater land concentration and landlessness." Other reforms followed, such as the abolition of pensions and social welfare measures that had supported the sick and disabled, widows, orphans, and ax-soldiers.

After seven years of this "restructuring," according to the World Bank's own estimates, poverty has increased, with up to 70 percent of the population now in "absolute poverty," half the adult population consuming considerably fewer than 2,100 calories a day and half the children severely malnourished.' 3 At least a million people have been made unemployed, most of them in the health services. They, together with people thrown off their land, should be offered, says the World Bank, "unskilled work at low wages." (In the draft of this report I saw in the Bank's offices in Hanoi, someone had penciled in the margins that the "figure proposed by UNDP consultants is so low as to be virtually slave labor.")

Since these "reforms" got under way, the bank admits there is

"a higher proportion of underweight and stunted children than in any other country in south and Southeast Asia with the exception of Bangladesh. ... The magnitude of stunting and wasting among children appears to have increased significantly ... [T]he problem of food availability in the food deficit areas will not disappear overnight, since consumers in these areas do not have the purchasing power to bid up the price paid for food grains from the surplus regions In fact, it is financially more rewarding to export rice outside Vietnam than to transfer it to the deficit regions within the country Indeed, as private sector grain trade expands, the availability of food in the deficit regions may initially decline before it improves."

In other words, "consumers without purchasing power" will have to go hungry.

When I put these matters to Bradley Babson, a US economist who represents the World Bank in Hanoi, he was generous in his praise of the Vietnamese "independence of mind" in "defending their real achievements in the social arena." He was also extraordinarily frank. "I think it's fair to say," he said, "that Vietnam in the past has had more equality than many other countries, and that the reforms necessary for economic growth will bring greater inequality"

Limping with Tigers

According to Michel Chossudovsky, "the hidden agenda of the reforms is the destabilization of 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 with the Japanese conglomerates playing a decisive and dominant role.... [T]he movement is towards the reintegration of Vietnam into the Japanese sphere of influence, a situation reminiscent of World War II when Vietnam was part of Japan's 'Great East Asia Co-Prosperity Sphere.'

Japanese capital controls 80 percent of the loans for investment projects and infrastructure, while the dollar has taken over from the Vietnamese don", giving the US Federal Reserve Bank effective control of the flow of currency Singapore dominates the property market, and Taiwan and Korea the "tax holiday" sweatshops. The French and the Australians are doing nicely, too, with the British not far behind.

In 1995, the then British chancellor of the exchequer, Kenneth Clarke, visited Hanoi with a group of British businesspeople, who had been given a briefing document by the Department of Trade and Industry It was candid, almost ecstatic about the cheapness of people. "Labor rates," it said, "are as low as $35 a month." Moreover, the Vietnamese "can provide a new industrial home for ailing British products." "Take the long view," advised the British government, "use Vietnam's weaknesses selfishly. Vietnam's open door invites you to take advantage of its low standard of living and low wages.

I showed this document to Dr. Nguyen Xuan Oanh, the economic adviser to Prime Minister Vo Van Kiet. "We have inexpensive labor," he said. "I don't call it cheap labor. It allows us to be competitive on the international market." Thereupon he extolled growth rates, "tax holidays," diminished public services and the rest of the IMF deity

What was interesting about this man was that not only was he an architect of Vietnam's "market socialism," as he called it, but that he used to be deputy prime minister in the old Saigon regime. Detained at the end of the war, he convinced the communists they would need him one day and, like a bending reed, he survived. Today, from his smart Saigon offices, with their black leather chairs and remote-controlled air conditioning, he offers foreign entrepreneurs silky "personalized consulting" as they enter "a paradise for your investment."

"The regime you helped to run in the old days," I said, "was pretty corrupt, wasn't it?"

"We had a bad administration," he said. "It was supported by a black market, drugs, prostitution and war profiteering."

"It was not good.

"You were number two."

"I tried very hard to help, but not successfully"

"Aren't you beginning to re-create that same kind of government?"

"No, we are harmoniously blending socialism with capitalism. That is not to deny that when you open the door for new winds to come in, the dust comes in, too."

"That's an old Vietnamese saying?"

Laughter.

"I'm told Mrs. Thatcher has been an inspiration."

"We reamed some things from her, but what we are doing is distinctively Vietnamese. "

"The Vietnamese kicked out the French, who forced the population to work for next to nothing in foreign-owned factories. Isn't that now happening again?"

"I told you our people are merely inexpensive. . . "

Although those like Nguyen Xuan Oanh, David Dollar, and Bradley Babson speak publicly about Vietnam as "the next tiger economy," the truth is that, as the current crop of Asian tigers-Korea, Hong Kong, Singapore, Malaysia-run out of steam, with their share markets collapsing and currencies devaluing, the last thing they want is a competitor the size of Vietnam. For this reason, Vietnam's "integration" into the region is likely to be as an economic colony for the tigers, Japan, and the West.

This is dramatically evident in the Export Processing Zones, known as EPZs. Run by a Taiwanese company on cleared land on the banks of the Saigon River, one of them announces itself as "Saigon South ... a Brave New World." Inside, I was struck by the likeness to photographs of the cotton mills of Lancashire. Ancient looms imported from China, making toweling for export, were attended by mostly young women, who get a basic rate of $ l 9 a month for a 12-hour day. If they fall behind the target set by the manager, who secretly tags thread in their machine, they are fired. One worker controls four machines. "In Taiwan," said the Taiwanese manager, "we'd have one worker on six, even eight machines. But the Vietnamese don't accept this: They object."

The air was foul and filled with cotton dust, the noise unrelenting and the only protective clothing appeared to be hair curlers. One woman was struck in the eye while I was there. "We've got a medical center for that sort of thing," said the manager, who told me he had a business diploma from a California college. Under Vietnamese law, there ought to be a union at the factory "We haven't got one of those yet," he said. With 100,000 workers, many of them living in dormitories, "Saigon South" is a city state, with its own stock exchange, police, and customs. "We calculate," said the manager, "that this EPZ is what all Vietnamese cities will look like in the next century."

Commodifying Rights

Dr. Le Thi Quy runs the Center for Scientific Studies of Women and the Family in Saigon. Her work lately has concentrated on the conditions of workers in the EPZs, which she inspects unannounced. In a report commissioned by the government she describes as "commonplace" women forced to work from 7 am to 9 pm every other day "They must never stop," she wrote. "They are given a 'hygiene card' which allows them to do their personal hygiene only three times a day, each time taking no more than five minutes. The stress is something people have not known before, not even in war-time. It is systematic."

She concluded, "I have to report that something very serious is happening to our society Traps are being laid at the gates of profits. As public service employment is drastically reduced, our families are being commercialize..., prostitution has emerged into the open and is growing." She added eloquently, "The market economy is about mechanism. l wish to speak for humanitarian values. If we affirm that development can only be achieved by sacrificing these values, which have been long pursued by mankind and give us hope for freedom, democracy, and equality, it means that we reject the most basic factors that link people together as a community It is an insult to our humanity to maintain that people only have economic demands, and therefore economic development must be made at all costs. To live is not enough. People must seek many things to make their lives significant.

If development was measured not by gross national product, but a society's success in meeting the basic needs of its people, Vietnam would have been a model. That was its real "threat." From the defeat of the French at Dien Bien Phu in 1954 to 1972, primary and secondary school enrollment in the North increased sevenfold, from 700,000 to almost five million. In 1980, UNESCO estimated a literacy rate of 90 percent and school enrollment among the highest in Asia and throughout the Third World.

Now that education has been transformed into a commodity, "consumers of [educational] services," says a constipated UN Development Program report, "[are required] to pay increased amounts, encouraging institutions to become self-financing, and by using incentives to privatize delivery of education and training where appropriate." Teachers who have not been "redeployed" on road gangs and other "public projects" have had their salaries cut to as little as $8 a month. Most schools have been privatized, with the obligation to pay tuition fees now written into the constitution. By 1992, an estimated three-quarters of a million children had been pushed out of the education system, despite an increase in the population of children of school age.

At a village in the Mekong Delta a woman and her 12-year-old daughter sit in the shade making straw beach mats for export. A middle-man pays them a total of a dollar a day They work from five in the morning until five in the evening. Ten I years ago, the village had a cooperative that l funded a primary school. Now that cooperatives have been abolished, the girl must work such grinding hours to pay for sporadic lessons at a nearby fee-charging school.

The Vietnamese health service was once famous. Primary care where people lived and worked raised life expectancy to among the highest in the developing

J world. Vaccination programs reduced the spread of infectious diseases; in contrast to most of the Third World, preventable diseases were prevented. More babies survived birth and their first precarious years than in most countries in Southeast Asia. Now, under the tutelage of the foreign "donor community," the government has abandoned direct support for all health services. Drugs are available only to those who can afford to buy them on the "free market." Diseases like malaria, dengue, and cholera have returned.

In its inimitable way, the World Bank acknowledges this "downside" of its "reforms." "Despite its impressive performance in the past," says the Transition to the Market report, "the Vietnamese health sector is currently languishing ... there is a severe shortage of drugs and medical equipment.... The shortage of funds is so acute that it is unclear where the grass roots facilities are going to find the inputs to continue functioning in the future."

During the US carpet bombing of Hanoi at Christmas 1972, the Bach Mai hospital in the center of the city became something of a symbol of resistance. A bomb destroyed a wing, including wards and laboratories; patients, doctors, and nurses died. One of the survivors was Professor Nguyen Van Xang, a stooped man who could be Ho Chi Minhs brother and whose office is dominated by a picture of the rubble it was. "I heard the bombs whistling towards us," he said. "I took the nearest patients and sheltered them over there, under the stairs. Everything seemed to collapse around us."

As we talked, there was a power cut; the hospital's weary generator failed yet again, turning the wispy-bearded figure seated in front of me into a silhouette in a Gothic setting, bathed in the thin, yellow light of early evening. The scene poignantly expressed the exhaustion of Vietnam.

Xang explained that, under the new, privatized system, a patient had to put down a deposit of 7,000 dong ($6.30) and a bed cost the equivalent of $4 per day This was a great deal of money for the majority, who were excluded, causing Xang to put his socialist beliefs into practice by handing out free drugs to poor people at a pagoda every Sunday "The situation here," said the professor, "is that we can no longer afford a filter for our one kidney machine. It costs $22. So we use the same filter several times, which is wrong and dangerous.... If a patient has renal failure and cannot afford to pay a quarter of the cost of the treatment, we have no choice but to treat them by traditional means; and they die."

Uncle Sam's Gift Horse

In Saigon, l made an appointment to visit the Tu Du obstetrics and gynecological hospital. Built by the French in the 1950s and extended by the Americans, it is one of the most modern in the country-in the circumstances, a handicap, for almost all the equipment is American, for which parts stopped coming in 1975. The last children's respirator had disintegrated a year earlier.

A former operating room is known as the "collection room" and, unofficially, the "room of horrors." It has shelves of large bottles containing grotesquely deformed fetuses. In the late 1960s, the US sprayed much of South Vietnam, which it said it had come to "save," with defoliant herbicides. Intended to "deny cover" to the National Liberation Front, this program was code-named "Operation Hades," later changed to the friendlier "Operation Ranch Hand." The defoliants included Agent Orange, containing dioxin, which is a poison of such power that it causes fetal death, miscarriage, chromosomal damage, congenital defects, and cancer.

In 1970, the US government banned the use of Agent Orange on US farmlands, but continued to spray it in Vietnam, where a pattern of deformities began to emerge: babies born without eyes, with deformed hearts and small brains, and stumps instead of legs. Occasionally I saw these children in contaminated villages in the Mekong Delta; and whenever I asked about them, people pointed to the sky; one man scratched in the dust a good likeness of a bulbous C-130 aircraft, spraying.

... In August that year, in a report to the US Senate, Sen. Gaylord Nelson (D-WI) wrote that "the US has dumped [on South Vietnam] a quantity of toxic chemical amounting to six pounds per head of population, including women and children." When the new US ambassador, Douglas Peterson, said that the "exact consequences of Agent Orange" were not "clarified," he was challenged by the director of the War Crimes Investigation Department, Vu Trong Huong, who said, "We have over 50,000 children that have been born with ~ horrific deformities; the link is clear." At the Tu Du hospital Dr. Pham Viet Thanh showed me a group of recently born babies in incubators. They all had thalidomide-type deformities. "These Agent Orange births are routine for us," he said. "Every now and then we have what we call a fetal catastrophe-when the number of miscarriages and deformed babies, l am afraid to say, overwhelms us." In one ward there were two women suffering from chorion carcinoma-cancer of pregnancy, which is extremely rare in the West. "We don't have the training to deal with this phenomenon," said Thanh. "We have asked for scholarships in Japan, Germany, the US, and the UK, but they say no, or they don't reply"

From Uncle Ho to Adam Smith The question begs: Why is this being allowed to happen? Why are foreigners once again being permitted to dictate the future of Vietnam? One answer is that the Vietnamese Communist Party was never as ideological as it appeared. The original impetus was nationalist; initially, the communists were the only political group that opposed French imperialism. Once they gained power in the north in 1954, many people joined the Party for reasons of personal ambition. There was a similar influx in the south after 1975; party membership offered power and privilege. Another explanation is that, like other Communist parties, with their hierarchy and disciplines and lack of internal democracy, they were best equipped to fight a protracted war, but not to govern and protect a society at peace.

Yet the party was immensely popular. The great majority of Vietnamese "provided its strength and often forced it to move in ways that broadened its popular appeal and, in turn, accepted and made monumental sacrifices," wrote Gabriel Kolko. "However elitist its top leadership, the party's success as a social movement was based largely on its response to peasant desires." And that, says Kolko, is at the root of its betrayal today, making "the war a monumental tragedy and a vain sacrifice ... for the majority of Vietnam's peasants, veterans, and genuine idealists."

I understand his disillusion, but I think the privations that the Vietnamese have endured during 30 years of war and 20 years of isolation made some things inevitable, such as the erosion of principle and ideology and the growth of corruption in a war-ruined economy especially in a bureaucracy which, since the war, has operated substantially for the benefit of party cadres. Many of them had little interest or education in socialism and became, like those in Boris Yeltsin's Russia, the most visible and voracious members of the new urban consumer class.

As for the ones who refused to go this way, and who could legitimately claim to be the legatees of Ho Chi Minh, they, too, were both desperate and vulnerable- desperate to internationalize their country and fulfill a historic need for counterweights to the power of China, the ancient foe, and to lessen the dependency l on a Soviet Union in its death throes. The most generous explanation for their embrace of laissez-faire capitalism is that they have been seduced, and as one destructive "reform" follows another, the seduction is beginning to look like rape. In another sense, Vietnam is simply typical of poor countries denied an independent path for their economies and whose governments become more concerned, almost mesmerized, with satisfying their foreign creditors than with serving their people. The resolution of this is perhaps Vietnam's final battle and the most difficult one of all.

Shredding Culture

Certainly, the "dangerous time" that the artist Nguyen The Khan and many others allude to has arrived. That is to say, the point is passing where the Communist Party leadership loses control and becomes a captive of the foreign impositions it has endorsed. When that happens, the pact between the party and the peasants, which was probably unique to Vietnam, will be finally broken, and there will be a vacuum and trouble or, as Kolko calls it, "a divorce."

The signs are there. Every day, very poor people and disabled ax-soldiers are swept from the center of Saigon and taken to detention centers; and anti-government Buddhists-reminiscent of those who helped to topple the US-backed regimes in the 1960s-are again prisoners of conscience. The Vietnamese army, having expended the nation's blood, sweat and tears, and built the cooperative system in the countryside, regards itself as the keeper of historical memories and legacies. That is why it has allowed its own journals to criticize their political masters and has made a subversive hero of the late Gen. Tran Van Tra, the brilliant, nonconformist commander of the victorious army in South Vietnam in 1975, who later formed a dissident group, the Society of Resistance Fighters. Another war hero, Col. Bui Tin, said from exile in France, "I long for a humanist, modern, and pluralist socialism in my country"

Unlike China, obedience requires consensus in Vietnam. In his biography of Defense Minister Gen. Vo Nguyen Giap, Peter MacDonald wrote that "whereas in many nations there are thousands of family names, evolved over the centuries and added to by migrants, in the whole of Vietnam there are less than a hundred, based on tribal groupings such as the Ngo and the Nguyen: people are part of a big family" Tearing apart the fabric of this family will not be compensated for by Honda motorbikes, Pepsi-Cola, and mobile phones.

In advocating an "agricultural wage labor market" as a way of brutally disconnecting farm workers from their villages and making them "flexible," meaning itinerant, Vietnam's new foreign managers and creditors ignore the resilience of rural life, with its community of labor, its village councils, mutual aid societies, craftsmen's guilds, and emergency relief organizations. Much of this has lasted for 2,500 years: a model of natural socialism, you might say Instead of trying to destroy it, genuine reform would build on its foundations and, with resources that eradicated poverty, create a modern, vibrant, agriculture-based economy that matched the needs of the majority

Fighting Back

The final battle has begun. Saigon's biggest strikes since the war have swept over the Korean-owned EPZs. The issues are slave wages, excessive hours, and cruel managers. Although not reported in the media, labor rights are widely supported in Saigon. Seldom a week now passes without a major "wildcat" strike, which can be of such intensity that the civil authorities often choose to stand back: a clear sign that they are worried.

In 1997, Nike, the giant US running-shoe maker, which employs 35,000 mostly female workers in Vietnam, was hit by a series of rolling strikes. Illegal demonstrations were held outside the gates of the company's sub-contractors, and the police stood by A study by the US-based Vietnam Labor Watch found that the workers' average wage was $1.60 for eight hours, while the shoes they made sold for up to $149 in the US.

"Supervisors humiliate women," reported the Vietnamese investigator. "They force them to kneel, to stand in the hot sun, treating them like recruits in a boot camp. In one plant, workers were allowed to go to the lavatory only once during a shift and were limited to two drinks of water. The Taiwanese sub-contractor forced 56 women to run around the plant in the sun as punishment for wearing 'non-regulation' shoes. Twelve fainted and were taken to hospital. The next day, the factory was attacked by local people."

In the countryside, the privatization of land has brought administrative chaos and anger. This has been reported in the official press as "hot spots" that are "smoldering," "tense," and "very fierce." In Thai Binh province, south of Hanoi, government offices have been sacked and officials forced to flee for their lives. "The military and police failed to halt the problem," said one report.

The biggest single foreign investor in Vietnam, the Korean multinational Daewoo, plans to build a $147 million EPZ near Hanoi, including an 18-hole golf course for its executives and customers. The golf course will destroy the rice fields and the way of life of the village of Tho Da. The government has offered the villagers compensation of $197 per family Rejecting this, they erected barricades and a sign, "Dangerous Area. Do not enter," over a skull and crossbones. Police attacked twice and were thrown back; one woman was killed. Daewoo's chairman flew in from Seoul with reassurances that the golf course was "not just for golfers." At the time of writing, there is a huge row involving the prime minister, the Hanoi Peoples Committee and the Korean government. Meanwhile, the barricades remain, a symbol of a new popular resistance finding its natural leaders and confidence with every confrontation. Not only has the government admitted that this "danger and social turmoil" is "becoming more and more complex and serious," but the instigator of "Renovation," Nguyen Van Linh, has warned that the "gap between the classes needs to be solved promptly.

Cranes vs. Vultures

In Saigon, I stayed in the same room at the Caravelle Hotel that was my intermittent home 30 years ago. From the same balcony overlooking Lam Som Square, next to the French playhouse, I used to watch people show immense courage in demonstrating against the vicious foreign-backed regimes that came and went. Here, too, I watched the dawn lit up by tracer bullets on the last day of April 1975, the last day of the longest war this century.

The hotel's cashier in those days, always a morbid man, had threatened to shoot himself that evening; but he chose not to, and he survived and retired on a cashier's pension. The door-opener, a laconic character from Bombay, was there until recently. "I have ushered in victors and ushered out vanquished," he would say. "The good thing about this job is that, in hurrying in and hurrying out, they don't notice me."

Coming back, I met Dr. Nguyen Thi Oanh in the foyer. A gracious and wry person, she had trained as a sociologist in the US in the 1950s. "I was never a communist," she said, "but I was close to them because they expressed the nationalism I felt, and they were brave. The problem with the course we are taking now is that it flies in the face of the best of our history, which makes us proud and able to bear many privations. The real danger is that we shall lose our soul, and not realize it before it's too late."

I told her that the Ministry of Culture had wanted to censor the documentary film my colleagues and I had shot at My Lai, because they were afraid it would offend the Americans and be bad for business. She shook her head. "They know the Americans can never forget," she said.

"Why," I asked, "are the Vietnamese able to forget?"

"Because we didn't lose, we won. We lost materially speaking, but spiritually we won. We are losing a bit now, but we will win again."

Apart from such pride, there are, for me, two outstanding attractions about Vietnam. The first is that the maxims of Ho Chi Minh, which inspired a great popular resistance, are still admired for their common wisdom and acted upon. When the bombing began in the mid-1960s, Ho traveled down Route One, which was then known as "the Street of No Joy" by the US pilots who blitzed it and the Vietnamese convoys who depended on it. He made a speech along the way in which he said that when the war was over, "we shall make our country a thousand times more beautiful."

I met a man who is the embodiment of this, Professor Vo Quy, a restless 70-year-old whose office at Hanoi University is guarded by the ancient skeleton of an elephant. He has led one of the most dramatic environmental rescues in history. In 1974, while the war was still going on, he traveled south and found the environmental damage so great that he returned with the warning that, unless something was done, Vietnam in 20 years would look like the moon. "The ecosystem was in a terrible way," he said. "The mangroves were largely ruined by bombing and herbicides. The wildlife was gone. The tigers, which had followed the sound of gunfire, were extinct. I found no water birds."

The task of reforestation was enormous. In areas drenched in Agent Orange, not a single tree remained; the earth was thought to have solidified and "died." Quy initiated a re-greening campaign, that involved almost everybody Over the next five years, millions of acres of poisoned land were reclaimed. Every village planted a forest, every child a tree.

Today, in many parts of the country, the sound of birds and the rustle of wildlife are heard for the first time in two generations. "We thought the stork and the ibis and certain types of crane were extinct," said Quy "But as each new tree encouraged the tropical organisms, and the mangroves began to grow back, we had exciting discoveries: we found great birds we thought we'd lost: 25 cranes and the rare milky stork. I myself saw an ibis on the Laos side of the border. What a sight it was! I immediately ordered a sanctuary to be marked out!" A pheasant which reappeared was named a "Vo Quy".

For me, the other compelling attraction of Vietnam is the spectacle of human reconciliation. Under a program sponsored by the European Union, Vietnamese boat people scattered in refugee camps throughout Asia were asked if they wanted to go home. Tens of thousands said they did, but many were frightened. They were first reassured by videotaped interview with their relatives and friends at home A small nation has since returned. On arrival, they are lent enough money to start again; and their community is subsidized so that there is no talk of favoritism.

I was introduced to a fisherman, Mac Thi Nhan, who fled with his family to Hong Kong, and was now back in his village on Ha Long Bay, and with a new boat. "I was afraid at first, but everyone has been thoughtful to us," he said. His wife nodded agreement.

Michael Culligan, who runs the EU program in Haiphong, said, "I have traveled all over the country and met thousands of returnees, and I have not come across a single case of victimization. The Vietnamese are a very kindly people. They were very sympathetic towards the boat people who came home, and they went out of their way to ensure they didn't lose face. That is a civilized society"

This article is reprinted from John Pilger's new book Hidden Agendas.

John Pilger is an Australian-born journalist and film maker based in London. He has reported on Indo-China since 1966; his writing and documentaries have won numerous awards in Europe and the US.

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