Sun, Oct 21, 2012 - Page 14 News List

Bust threatens middle class made by Vietnam’s boom

Inequality and corruption may unravel all the good from the country’s post-war economic rebirth

By Nick Heath, Jason Folkmanis and Nguyen Dieu Tu Uyen  /  BLOOMBERG

Between the Bentleys and Range Rovers in the square by Hanoi’s yellow-and-cream opera house, street vendors carry food and wares on bamboo poles on their shoulders. Across the square, burnished in gilt, a Gucci outlet sells handbags for twice the average annual wage, while a cleaner in a French maid’s pinafore mops the marble floor.

“Business has been very difficult this year,” said Nguyen Thi Nhung, 38, who sells lingerie and hair accessories from a metal cart.

In a conical hat and face mask to shield her from the traffic fumes, she pushes her cart for miles each day until after 10pm to pay for her children’s schooling.

“If it [Vietnam] wants a smooth transition to an upper-middle-income status, it will have to bite the bullet and credibly restructure its economy,” said Deepak Mishra, World Bank lead economist for Vietnam in Hanoi.

In her yellow house, Do retains the optimism that characterizes many Vietnamese who have seen their lives improve since 1986.

“The situation will gradually get better in the next few years when the global economies recover and the government sorts out problems like the bank lending,” she said. “I’ve seen so many things here improve in the past few decades.”

Additional reporting by K. Oanh Ha

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