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Last Updated: Thursday, 31 August 2006, 23:02 GMT 00:02 UK
Communist Vietnam rides consumer boom
By Bill Hayton
BBC News, Hanoi

Busy road in Hanoi
Confidence is returning to Vietnam

Vietnam has one of the fastest growing economies in the world - an impressive achievement for a country which, just 20 years ago, was mired in poverty and economic crisis.

Now an exhibition has opened in the capital Hanoi to show young visitors what life was like for their parents and grandparents under the old communist system.

The first thing visitors to the Ethnology Museum see is a mock-up of a food queue.

In the 1980s, under what was called the subsidy economy, food - and almost everything else - was rationed.

Back then the combination of war, US economic sanctions and a communist system in which the government decided who could buy what, meant that even bicycles were in short supply.

One visitor, Ngo Van Duc, remembered what that meant.

"When you wanted to buy a bike, even if you had the money, you had to wait your turn," he says.

"If you wanted spare parts you had to do the same thing."

'Better life'

Under the subsidy system you could only buy your assigned portion - now you can buy whatever you want, so long as you have the money
Nguyen Quang Hao, businessman

This is the first time that any public institution in Vietnam has turned such a critical eye on the past, and the exhibition has been hugely popular.

The museum's director, Nguyen Van Huy, says he wants visitors to take home a particular message.

"People will see that the subsidy system no longer worked," he says. "It constrained the creativity of the people and it made life harder than it needed to be.

"People needed reform to have a better life."

Things began to change in Vietnam almost exactly 20 years ago with the death of the then communist leader, Le Duan.

Under him, Vietnam had beaten the US but suffered the consequences: a stagnant economy with inflation soaring to 700%.

Things had to change - in particular Le Duan's policies.

Ration cards

Le Duan
Le Duan led the Vietnamese Communist Party for 26 years

These days Le Duan is a controversial figure. There are no monuments to him in Hanoi, in contrast to the thousands in honour of his predecessor Ho Chi Minh.

Just a single street is named after him.

It's hard to believe that people once queued for food in Hanoi's streets - but one building neatly demonstrates the transformation.

Above the shop fronts the old lettering reveals its former function.

It used to be a government store where people waited with their ration cards to buy food.

Nguyen Quang Hao used to work here then, but now he runs the place as the owner of a successful private business.

"Under the subsidy system you could only buy your assigned portion," he says. "You couldn't have more than that. Now you can buy whatever you want, so long as you have the money."

Nouveau riche

Well stocked Vietnamese shop
No more queues - many shops are now full of goods

Vietnam's achievements in the past 20 years stack up. The rate of poverty has halved, the population is literate and relatively healthy and living standards have vastly improved.

But the incomes of those at the bottom aren't rising as quickly as those at the top.

While some eke out a living on the streets, others are living a flashier lifestyle.

Just around the corner from Le Duan Street, old French colonial villas are being turned into consumer stores.

And in a country where the average wage is $700 a year, Hanoi's nouveau riche are buying the latest electronic accessories.

In one mobile phone shop they sell up to 10 phones a week at $2,200 each, mostly to state officials and big business people.

Communist legacy

On the streets of Hanoi, it can be hard to tell that this is still a communist state - so how communist is modern Vietnam?

Exhibit at Hanoi's Ethnology Museum
Bicycles were in short supply 20 years ago

It's still ruled by the Communist Party, the state still controls almost half the economy and the government puts a strong emphasis on reducing poverty.

However, even some people working for the government argue that the real communist legacy is the continuing effort to try to control almost every aspect of life.

Vo Tri Thanh, from the Central Institute of Economic Management, says the country's psychology needs to change.

"The legacy is in a way of thinking, of developing policy," he argues.

"This is a very serious obstacle for Vietnam to continue reform."

Vietnam's urban youth are enjoying the spoils of economic freedom and for the time being aren't questioning communist rule.

But things are changing very fast in Vietnam and the Communist Party still has to demonstrate that it can answer the questions posed by an increasingly capitalist society.

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