Nineteen years after the end of the Vietnam War, U.S. businesses - including many of the same companies that armed the U.S. war machine - are eager to return to Vietnam.
General Electric opened offices last year in the Vietnamese capital of Hanoi and in Ho Chi Minh City, formerly Saigon. GE, a Pentagon supplier for decades, hopes to sell the Vietnamese aircraft engines, power-generating machinery, locomotives and medical equipment. GE believes there is a $ 500 million market for its goods in Vietnam the next two or three years, and up to $ 2.5 billion in potential revenue the next 10 years. "For us, that means about 5,000 (U.S.) jobs over the next decade," says GE spokesman George Jamison.
Vietnam today needs almost everything the industrialized world can supply, from turbines to telephones. The 70 million Vietnamese have led a primitive existence since the North Vietnamese army overran Saigon in 1975. Electricity and telephone service are erratic. Much of the country - including many roads, bridges, airfields and rail lines - remains untouched since the last bombs fell.
The Hanoi government knows consumer goods will reach Vietnam quickly enough. Many U.S. consumer goods are smuggled in or sold through third countries despite the embargo. For now, Hanoi is eager to begin building a modern infrastructure to handle the country's transportation, telecommunications and power needs. Vietnam plans to spend more than $ 7.5 billion on infrastructure between now and 2000.
The United States imposed a trade embargo on the communist north in 1964, extending it to the south after communist forces captured Saigon. Nearly 15 years of political isolation followed as U.S. trading partners in Europe and Asia observed the embargo at the behest of the U.S. government.
Vietnam began to emerge from its isolation in 1989 after withdrawing its invasion force from neighboring Cambodia. Since then, the effort to normalize economic ties with Vietnam has been led by Japan and France - nations that, like the USA, learned painful military lessons in Vietnam. Against the wishes of the U.S. government, the Japanese and French have helped Vietnam clear up its debts to international lending agencies so it can get billions in loans to finance its rebuilding.
Dozens of U.S. businesses have been lobbying for an end to the embargo since the Bush administration. Just last month in Bangkok, representatives of U.S. banks and brokerages cornered Treasury Secretary Lloyd Bentsen to bend his ear about the importance of lifting the embargo quickly.
Most U.S. firms struggled to keep their efforts quiet so they could avoid the political heat generated by the emotional issue of the 2,238 U.S. servicemen missing from the Vietnam War.
The United States was virtually alone in observing the embargo the last year or two, and that will prove costly. Lured by an untapped consumer market, companies from Japan, South Korea, Hong Kong, France, Germany and elsewhere have been pouring in, snatching up contracts the Vietnamese had hoped to reserve for U.S. firms.
"For almost every sector now, Vietnam has identified at least one non-American partner," says Virginia Foote of the U.S.-Vietnam Trade Council. "There isn't a sector any more being saved for the U.S., like the oil sector once was."
Still, there should be plenty of business to go around:
-- Caterpillar figures Vietnam will need $ 350 million to $ 700 million worth of heavy earthmoving equipment the next few years. The firm has been in Hanoi, talking prices since May.
-- Coca-Cola is eager to replace the smuggled Coke now peddled on the streets of Hanoi and Ho Chi Minh City with the real thing. "We expect to be there in 10 days" with Coke bottled elsewhere in Southeast Asia, says Andrew Angle, head of the company's regional division. The company plans to spend more than $ 40 million on two Vietnamese bottling operations.
-- Boeing lost out to France's Airbus on a big order of jets earlier this year. But the Seattle-based company believes the Vietnamese will buy 60 to 80 aircraft - worth $ 3 billion to $ 5 billion - between now and 2010.
-- Oil giant Mobil may have been waiting longest. The company expects to be able to explore and drill off Vietnam in a South China Sea oil field it discovered in 1975.
Some experts warn that Vietnam's potential has been hyped by overeager corporations. The country, they note, is desperately poor, with an estimated 40% of children malnourished and per-person income at a paltry $ 200 a year. "There is no gold mine," cautions Linda Lim, editor of the Journal of Asian Business. "Doing business will be difficult and the field is already crowded with many more-experienced competitors."
Indeed, doing business in Vietnam means being ready to take risks and improvise. Despite the presence of foreign banks, Vietnam lacks auditing and accounting standards and a tax structure. It has no legal framework to deal with direct investments, private property, bankruptcy, privatization of state-owned businesses or protection of foreign copyrights, patents and trademarks.
Foreign companies are targets of graft and misrepresentation. "It's tough to find (government) decision makers. Everyone says they're the guy," says Eric Rehmann of Washington, D.C.-based Vatico, which advises U.S. companies on business opportunities in Vietnam.
But Vietnam is almost irresistible. It is rich in natural resources - tin, bauxite, gemstones. It is the world's third-leading rice exporter. Its people are its greatest resource: Nine of 10 Vietnamese adults can read; many speak foreign languages - English and French in the south; Russian, Hungarian, Chinese and Cuban Spanish in the north. Vietnamese schools place great emphasis on science and engineering. Outsiders speak reverently of the labor force's affinity for hard work.
Thirty-four U.S. companies opened offices in Vietnam last year, the first year they were allowed. When they have sent employees to Vietnam to assess the market, many made sure to include some Vietnam veterans.
"One of the weird things is how welcome (U.S.) vets are," says Sam Peck, a Seattle-based marketing consultant who served in Vietnam during two tours with the U.S. Navy. "Maybe it's a warrior code or something."
Peck, who works with Boeing, has been to Hanoi three times since April. "I couldn't believe how friendly they were. They have a fascination with our war veterans. And they're obviously very anxious for U.S. businesses to come back."
U.S. firms set to get back to business in Vietnam
POPULATION: 70 million AREA: 127,300 square miles; about the size of New Mexico ANNUAL GDP: $ 15 billion EXPECTED GDP GROWTH: 8% a year through 2000 CAPITAL: Hanoi CURRENCY: Dong; 11,000 to $ 1 MAJOR FOREIGN INVESTORS: Taiwan, Hong Kong, Australia, France, Japan INVESTMENT POTENTIAL: Oil, telecommunications, autos, financial services EXPORTS: $ 2.2 billion/year (agricultural products, handicrafts, coal, ores) IMPORTS: $ 3.3 billion/year (oil, steel, railroad equipment, chemicals, medicine) PER-PERSON INCOME: $ 200 a year
Source: The International Economy, Universal Almanac, U.S.-ASEAN Council
