Saturday, January 18, 2014

Musings on economics and demographics

Vietnam had a population boom around the same time that the US did and it continued for a while after the war.  Most of the people my age come from families of six or more children, and nine or ten is not uncommon.  The population of Vietnam at the time of the war was 40 million or so; today it is over 90 million.  But in the 1990's the government instituted a two child rule and, although enforcement was weak to nonexistent, family sizes have dropped dramatically.

As we drove by all the rice paddies, I noticed that everyone working in them was old.  There is a very strong emphasis on education and professional work.  The children are studying engineering and IT in the universities.  All of my guides, like Binh and Chien, are college educated, and all are the children of farmers.  Thinh is also the son of farmers and he is aspires to develop his tour company in Hoi An.  I asked him what will happen to the farms when this generation passes on.  He said that the few farmers who remain will buy up land and consolidate the small family farms into large farms that can afford to automate.

Although there are rice paddies for as far as you can see, they are subdivided into fairly small sections.  You always see bicycles or motorbikes next to the fields where people are working, because they ride to their plots.  But it is not clear to me who owns the land and I can't get a straight answer.  I was told that each person gets 50 hectares.  So can he leave it to his children?  If he has more children, does he get another plot?

Everyone that I see in Vietnam is a merchant or entrepreneur, but as near as I can tell, it is a buyer's market.  Tourism is big here but there is too much supply by a factor of at least five or ten.  Ten times as many hotels, ten times as many restaurants, way too many vendors selling the same souvenirs to too few tourists.  On the one hand, thirty year old Thinh can start his own company with the best bicycles in Hoi An.  On the other hand, there are twenty other tour companies that offer bike tours in Hoi An.  So the prices are very low.

Chien's parents, who are farmers in the Mekong Delta, want him to get a job in government so he can have security.  Chien's degree is in education but he does not want to teach, at least not right now.  He works for several tour companies, accepting the assignments he wants and turning down those he does not.

While Vietnam is clearly a modern country and becoming more modern by the minute, the pace of life is still slower here than in the US and many things are still done "the old way."  Every town has a daily open air market where vendors sell produce, meat, clothes, and everything else.  There are some grocery and department stores in the big cities, but most people buy things daily at the markets.  It appears to me that there are more sellers than buyers at these markets too, but the system must be working.

I can not tell if Vietnam is a poor country, whatever that means.  Things are very cheap here, and everyone seems to be selling something or in business for themselves.  The houses are long and narrow, and the front room of almost every house is a shop or restaurant of some kind.  But next to these houses, they build marble burial sites and temples that cost $20,000 or more.  We drove by hundreds of them yesterday, some right next to hovels.  The guide said it was a poor area and that the land there was sandy and not good for farming.  But even if the land is cheap, the memorials are not.  I have seen other signs of expensive purchases.  There are lots of wedding dress stores here and I have seen dozens of wedding parties dressed up and doing photo shoots.  (By the way, the wedding dresses come in all colors - red, blue, pink, yellow - and are quite striking.)

People seem to be eating out all the time.  It may be street food and cheap, but I see people sitting in cafes and sidewalk restaurants all day long.  There is a lively, outdoor culture that has nothing to do with the tourists.  It would be difficult for me to go into most restaurants because there is no English menu and no one speaks English, but they are packed with Vietnamese.

So I can't tell if the people are poor or if they choose to live in poor house and save their money for other things. And I'm not sure if anyone knows.  The people distrust the government, police, and banks, and most transactions are done for cash.

No conclusions, just some random observations.  It is clear to me that Vietnam is rapidly transitioning from an agrarian country to a first world country, but I'm not sure what that will look like.  And I continue to not fully understand what it means to be communist (single party) and capitalist.  But southern Vietnam is definitely capitalist.  I am told that northern Vietnam is more communist.  Next week I'll see ...

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