Table of Contents
Executive summary
Vietnam, known officially as the Socialist Republic of Vietnam, is a small Communist country with one of the fastest growing economies in the world.
Throughout its history, Vietnam has been a country of war. The northern part of Vietnam was a province of China from 111 B.C. to A.D. 939. After winning their independence after many an unsuccessful revolt, the Vietnamese dynasties expanded further south to the edge of the South China Sea and defended its borders for many years.
The French colonization brought Western culture and influence to the country. Their years under French rule affected them in many ways. In that time Marxism became well known as both Russia and China were at the time succeeding with their nations. Ho Chi Minh was the spokesman in Vietnam. After winning successful battles against the French and Japanese, Northern Vietnam was under his command. Then the Indochina Wars both the first and second were fought and won and all of Vietnam was united once again.
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The following years saw the world watching as Vietnam climbed back from the bright of poverty to a stable economy after having fought literally everyone around them for centuries.
History
Early Vietnam
In B.C. 111, the Chinese conquered the land that would be Vietnam, bringing with them administrative structure, plows, schools, Chinese architecture, roads, canals, and harbors; all helped along with coerced Vietnamese labor. Despite many revolts, it wasn’t until 939 A.D. that the Vietnamese reclaimed their country.
China’s Thousand Year rule influenced much of Vietnamese culture. The Chinese brought Taoist, Buddhist, and Confucianist belief into the country where, once they left, the Vietnamese mixed and blended the beliefs into something of their own. However, Confucianist practices did not completely overthrow the original culture. For example, women in Vietnam, like women in other parts of lowland Southeast Asia, enjoyed more rights than the women in China, Japan, and Korea, where patriarchal Confucian doctrine exerted a pervasive influence over the social structure. They could inherit property and engage in business outside of the home.
When Chinese rule ended, many dynasties rose to power in the following years. Their first act of freedom being to set out and conquer Champa, a kingdom occupying the southernmost half of what eventually became Vietnam. Meanwhile, in 1279 a Mongolian army invaded. After three years of fighting, the Vietnamese drove the horde out, despite having their capital occupied three different times in the war. In 1407, the Chinese Ming dynasty reconquered Vietnam, but were driven out again in 1427; never again to successfully hold the country since.
European Influence
The Portuguese were the first Europeans to reach Southeast Asia, building trading stations functioning as Catholic missions in 1535. However, it was the French who were the main propagators of Catholicism in Vietnam. The French Jesuits established two different missions in 1614 and 1626 despite objections by the Portuguese and flooded Vietnam with missionaries. But it wasn’t until the 1782 that the French became entangled in political affairs, when the French Apostolic Vicar (a missionary bishop answering only to the pope), Pierre J. G. Pigeau, befriended Nguyen Anh and attempted to help gain him back his throne.
Nguyen Anh succeeded the Vietnamese throne in 1802 as the Gia Long emperor. He was friendly and rewarded the Frenchmen who had helped him by allowing Western missionaries and merchants into the country but did not allow them the commercial privileges they wanted. His successor, Minh Mang, persecuted foreign and local Catholics harshly, until after the first Opium War between China and Britain erupted in 1839. Fearful that the French would do the same, he stopped the persecution but died soon after. His son continued the persecution until the French government stepped in 1862.
French Colonization
China’s concessions to Britain after the First Opium war (1839-42) left the British dissatisfied, so they caused another Opium war in 1856 with the help of France, which China also lost. The two nations then received additional concessions. But France was still dissatisfied, so they set about colonizing Vietnam.
By 1862, the French forced a treaty with Emperor Tu Duc and received three major provinces, the ability to open three ports, sail up the Mekong river, send out missionaries, and four million Mexican silver dollars—the international currency of choice at the time. By 1883, the rest of Vietnam fell.
The French called Vietnam, French Indochina, and turned it into de facto fiefdoms owning thousands of acres of rice fields cultivated by Vietnamese tenants and landless laborers, making Vietnam the third largest rice exporter in the world. Working conditions in the mines, plantations, and factories were described as living hells. Food shortages were common as 70% of crops were sold overseas, and taxes were placed on everything.
Rise of Communism
By the twentieth century, Communism began making waves as the 1917 Russian Revolution proved the success of the working class. Vietnam began taking note as China’s Mao Zedong also began pushing Communism in China.
In Vietnam, Ho Chi Minh played the strongest role in spreading Communism. In 1919, he sent a petition to the Allies of World War 1 meeting in Versailles asking for French Indochina representatives to be allowed in French Parliament. The petitions were ignored.
In 1925, Ho Chi Minh established the Vietnamese Revolutionary Youth Association, aka Thanh Nien, and sent many people to military academies in Soviet Russia and in China. However, in 1927 the Chinese Nationalist Party revolted against the Chinese Communist Party, sending the message to all Communist and Socialist groups to rise and take over. By 1930, the Thanh Nien returned to Vietnam and renamed themselves the Indochinese Communist Party—ICP for short.
The 1930’s were a bad time in Vietnam. The American Great Depression (which had world-wide repercussions) turned the Vietnamese poor into straight poverty. Plantation riots rose and were shut down brutally. The French government throwing fifty thousand people, among them many ICP members, into prison; resulting in many more conversions to the ICP.
When Hitler occupied France in 1940, the Nazi French leaders allowed Japan to station 25,000 troops in French Indochina and use their airports and naval bases in exchange for recognition of France’s right to retain their colonies. This was the reason that Indochina was mainly out of WW2. However, the Japanese milked the colonies dry, demanding more and more money and food
It was during this time that Ho Chi Minh returned from his ten year stay in Moscow to lead the ICP to expel the French and Japanese. Despite French and Japanese efforts, the ICP formed a guerilla group known as Viet Minh that caused major damage to the two. In 1945, the Japanese carried out a coup d’état against the French Indochina government and surrendered to the Viet Minh.
By 1945, Ho Chi Minh was the represented head of the Democratic of Vietnam based in northern and central Vietnam. However, Cochinchinese politician d’Argenlieu formed a government of their own and declared the south the Republic of Cochinchina.
The first Indochina War started in 1946 ending eight years later when Viet Minh forces defeated the French. The Geneva Conference in 1954 left Vietnam officially separated from France and split into the North and South. The second Indochina War—also known as the Vietnam War by Americans—lasted from 1965 to 1973. The end resulted in the mass evacuation of American troops and South Vietnamese from Saigon as the Northern Vietnamese united the country under Communist rule.
In the following years, the Communists gathered up everyone from the South to be place in “re-education” camps. After being told it would only be for a moth or two, most people followed along. However, the camps were basically work/prison camps. And in one fell swoop, virtually all the potential major opponents were taken care of.
Those who weren’t taken to the camps began to leave the country in boats, fleeing to Thailand and Malaysia. Thousands of refugees were misplaced, and most countries didn’t know what to do with them. Some countries didn’t let the boat people land and just passed them food. After receiving a lot of media attention, President Jimmy Cater passed the Public Law Act to allow the refugees to become permanent citizens of the United States.
Modern Times
In the post 1975 years, Communist Vietnam had to do some serious rethinking of plans. After moving thousands of Northerners to integrate the South, thousands of Southerners had to be moved to the mountains. Cambodia started acting out of line in 1978, so the Northern Vietnamese troops went over the border and put them straight again. In response to that, China sent troops in 1979 into Northern Vietnam to bother them.
Chinese and Vietnamese relations were already rather low as the disputes regarding ownership of the South China Sea were revived again, as well as the disagreement with the Vietnamese Soviet alliance.
In 1980, the Vietnamese economy collapsed. However, the USSR sent $3 billion a year to help them out. In 1986, Nguyen Van Linh was elevated to General Secretary and campaigned for a better economic system. And eventually it worked.
Ever since, Vietnam has become a successful economic destination spot, and has become more relevant in the international stage.
Culture
Culture is an important thing. It makes you who you are. Its an identity. People can change it or add to it, but it’s the people themselves that make it. Cultures can exist in anything, from countries and kingdoms, to families, to corporations. People themselves make it.
The Vietnamese culture is heavily influenced by China’s philosopher Confucius. This emphasizes the importance of relationships, responsibility and obligation. And like most other Asian cultures, Vietnam is a collectivist country. The community comes before the individuals.
The standard religion of Vietnam is for most Buddhism. However, many are also heavily encouraged—if only to follow tradition—to ancestor worship. Taoism and Atheism are also very prominent.
Food is also a very important part of culture. In Vietnam, rice is the dietary stable of most families. The common practice is to prepare several dishes that are placed on a tray or table that people sit around. Individuals have small bowls filled with rice, and then take food from the trays as well as rice from their bowls with chopsticks. The Vietnamese often accompany the main dishes with leafy bits and salty sauces. A popular dipping sauce is salty fish sauce called Nuoc Mam. They also enjoy serving tea from small pots into even small tea cup. Diet varies with wealth of course.
In cities, there is a large amount of food stalls serving only one kind of dish located right outside the owner’s front door. The most common food stalls would include, rice and meat, Bunh Cha—a pork and fish sauce dish, and Pho—a rice noodle soup with different kinds of meat.
Hofstede’s Insight Scores
Scoring 70 in the power distance dimension means that people generally accept a hierarchal order in which everyone has a place. In an organization, this interprets to centralization is popular, subordinates expect to be told what to do, and the ideal boss is a benevolent autocrat. People don’t do well with challenging authority.
Scoring 20 in Individualism, make Vietnam a collectivist country. This can be manifest in the close commitments to family, extended family, or extended relationships. Loyalty is everything. And any offense can lead to shame or loss of face. This kind of society fosters many close relationships.
Vietnam scored a 40 in Masculinity. Masculinity in a country is indicated by the society’s drive in competition, achievement, and success. Femininity means that the quality of life is the sign of success and standing out in a crowd is not good. In Feminine countries, managers strive for collective agreement, people value equality. Conflicts are solved by negotiation and compromise. A good manager is a supportive one.
Receiving a 30 in Uncertainty Avoidance. This means that there is a consensual low preference for risk. This kind of society maintains a more relaxed attitude. People believe there should be no more rules than necessary and if they are ambiguous or unhelpful then they need to be changed. This is rather ironic seeing as Vietnam is a Communist country.
Scoring a 57 in Long Term Orientation makes it a very pragmatic culture. This allows for more flexibility when applying traditions to changed conditions.
Vietnam scored a 35 in Indulgence indicating Vietnam as a Retrained culture. They do not put much emphasis on leisure time and show self-control when dealing with personal desires. People with this orientation have the perception that their actions are Restrained by social norms and feel that indulging themselves is somewhat wrong.
Economy
Vietnam’s development over the past thirty years is incredible. The economic and political reforms in 1986 transformed one of the world’s poorest nations into a lower middle-income country. The capita growth has been one of the fastest in the world, averaging 6.4% a year in the 2000s.
According to the 2018 Index of Economic Freedom, Vietnam is 53.1, making it the 141st freest economy. From last year, the overall score has increased by 7%, balancing its improvements in financial health, government integrity, and judicial efficiencies with its lower scores in trade freedom, property rights, and labor freedoms. Vietnam’s rank is below both the regional and world averages.
To continue forward in this upward trend, Vietnam would have to reform most of the state-owned enterprises, reduce red tape, increase the transparency of businesses, reduce loans, and increase property rights.
Private property rights are not respected in Vietnam. As it is a communist country, all land is collectively owned by the government. The Vietnamese judiciary system answers to the Communist Party of Vietnam, which controls all the courts. This area is full of corruption and brides are made freely.
Trade is essential to the Vietnamese economy. The combined value of exports and imports makes up about 185% of the GDP. Foreign investors may lease but not own land. And having an under-developed legal system pushes away foreign investors.
Vietnam’s Exchange rate is rather low as well. Coming down to 22,452 VND per one US dollar. Meaning that things are very affordable for the average tourist.
Legal and Business Issues
The World Bank ranked Vietnam 99th in the world for the ease of doing business. Meaning it is incredibly important to seek local help when doing business there. As Americans looking at other nations, it is imperative that you understand the place you are heading to. According to the World Bank there are ten different procedures to perform to open a business.
- Business Registration
- Construction Permits
- Getting Electricity
- Registering Property
- Getting Credit
- Protecting Minority Investors
- Paying Taxes
- Trading Across Borders
- Enforcing Contracts
- Resolving Insolvency
Each of these requires filling out and obtaining many different types of registrations from many different departments. This can take months to get all the paper work and permissions from everyone needed.
For example, the first procedure needed would be Business Registration. First your company would have to obtain the Enterprise Registration Certificate from the local business registration office under the Department of Planning and Investment, costing a total of five days and VND 200,000. Second, the company obtains a seal from a seal maker. Your company then owns the right to that design, content, and quality. But before you see the seal maker, you must send a notification to the Business Registration Office. Cost VND 165,000-370,000.
Third, you must register your new seal to the Business Registration Office who will then publish it on the National Business Registration Portal. That will take five days. Fourth, you must open a Vietnamese Bank account with an appropriate amount of money placed inside. To open the account the bank will require a bank-issued application form, a copy of the notification on use of the seal with a confirmation stamp of the Business Registration Office, the Charter of the Company, the Enterprise Registration Certificate and relevant documents as required by each bank. Fifth, you must pay the business license tax of VND 2,000,000. Then you must register all employees and their qualifications with the Labor Office and Social Insurance Fund provided by the Hanoi Social Insurance.
All of this takes time and having to find where to go and who to speak to. Having a local to help guide you to the right places would be essential to getting started.
Conclusion
Vietnam is an interesting country with a history of war and violence. It is a communist country and so is still dangerous. But as it moves into this new age of trade, technology, and economic growth, companies should do what they can to promote growth wherever they want.
References
- The University of California. (2006). Vietnam before the Mid-nineteenth Century. In Chan S. (Ed.), The Vietnamese American 1.5 Generation: Stories of War, Revolution, Flight and New Beginnings (pp. 3-11). Temple University Press. Retrieved from http://www.jstor.org/stable/j.ctt14btfg6.7
- Anonymous. (2017, April). Overview. Retrieved from http://www.worldbank.org/en/country/vietnam/overview#1
- The Heritage Foundation. (2018). Vietnam. Retrieved from https://www.heritage.org/index/country/vietnam
- State Bank of Vietnam Portal. (2018 March). Exchange Rate. Retrieved from https://www.sbv.gov.vn/webcenter/portal/en/home/rm/er?centerWidth=80%25&leftWidth=20%25&rightWidth=0%25&showFooter=false&showHeader=false&_adf.ctrl-state=153xliv3ra_4&_afrLoop=6190010584654000#%40%3F_afrLoop%3D6190010584654000%26centerWidth%3D80%2525%26leftWidth%3D20%2525%26rightWidth%3D0%2525%26showFooter%3Dfalse%26showHeader%3Dfalse%26_adf.ctrl-state%3D9tn80cwmd_4
- Pamela LaBorde. (2010) Vietnamese Cultural Profile. Retrieved from https://ethnomed.org/culture/vietnamese/vietnamese-cultural-profile
- Cristian Bain. (2017) Educational System of Vietnam. Retrieved from http://www.nafsa.org/Professional_Resources/Browse_by_Interest/International_Students_and_Scholars/Network_Resources/International_Enrollment_Management/Educational_System_of_Vietnam/
- Hofstede Insights. (2018) Country Comparison. Retrieved from https://www.hofstede-insights.com/country-comparison/the-usa,vietnam/
- TMF Group. Top 10 challenges of doing business in Vietnam. Retrieved from https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-vietnam/
- Zinoman, P. (2001). The Colonial Bastille: A History of Imprisonment in Vietnam, 1862-1940. Berkeley: University of California Pre
