So do more than 30 other U.S. corporate titans. They’re poised to grab a piece of the action in Vietnam, which has begun to throw off the shackles of a socialist economy. Most companies will have to play catch-up; for the last few years, European and Asian rivals have been operating successful enterprises of every description. They must also exercise patience -a virtue rarely found in American commerce. Vietnam is still one of the world’s poorest countries’. most of its 69 million people are only potential consumers of U.S. goods. The payback could be years away.
That isn’t holding back a company like Microsoft, which is planning to do business there as soon as it can. “There’s a small PC base, but now, without the embargo, we think it will grow exponentially” says spokeswoman Beverly Flower. “If that means we have to take the initial hit in order to get in there, we will.” Digital Equipment isn’t waiting to turn technological chaos into cash-it expects about $1OO million worth of consulting work to link incompatible computer systems this year alone. Caterpillar hopes to get at least $700 million worth of projects to repair Vietnam’s badly crippled infrastructure. No company has invested more over the long term than Mobil, which discovered vast quantities of offshore oil in the mid-’70s, only to retreat in the face of the embargo, surrendering the privilege of pumping to the Soviets. Now, with a 50 percent share in the exploration rights of the Blue Dragon field in the South China Sea, Mobil is ready to stake its claim.
Vietnam can’t wait. Despite years of a devastating war, followed by two decades of punishing isolation, the Vietnamese have a distinct fondness for Americans. Fresh capital and technological know-how will improve the lot of millions of farmers and city dwellers. A strong U.S. economic presence may also be Hanoi’s best defense against its thousand-year-old enemy, China. But some of the attraction is simply visceral: Vietnam can’t get enough of U.S. music, movies, cigarettes and soda.
Since liberalizing its foreign-investment laws in late 1987 and legalizing private production, Vietnam has experienced a tiny economic miracle. America’s embargo, as well as its veto of loans by international institutions, spurred Hanoi to broaden its diplomatic and trade contacts and to stabilize its centralized, Soviet-style economy. Last year the GDP bounded along at 7 percent. Money from abroad has cascaded into Vietnam; foreign investments from 34 countries climbed to $7.5 billion in January.
But the head start by foreign competitors spells trouble for U.S. companies. Many Vietnamese are hooked on Japanese and South Korean consumer electronics and cheap Chinese imports. Lost opportunities abound. Hanoi was holding a choice offshore oilfield for Mobil but couldn’t wait forever. Last April it finally signed a $1.8 billion exploration-and-production deal for the area with an Australian-Malaysian group. Last year Boeing negotiated an agreement to sell four 737s that fell through when the ban remained in place; state-owned Vietnam Airlines then turned to Europe’s Airbus Industrie and leased A320s.
Hanoi is still a long way from becoming another Hong Kong. Flimsy commercial codes, not to mention its entire legal system, invite victimization by political pressure and outright thievery. Red tape can tie up business deals for months-or kill them entirely. Behind the strong economic gains lies a country still in tatters: per capita income is about $200 a year, half that of Haiti. Cheap labor costs will draw some U.S. businesses. They’ll encounter a population steeped in the culture of hard work and respect for learning. But they won’t find a captive market for American cars and capital goods. McDonald’s, already preoccupied with burgeoning opportunity in China and the Mideast, has no plans to go to Vietnam. “You have to pick your shots,” says a spokesman. “Preferably where people can afford what you sell.” That assessment could prove shortsighted. Vietnam, after all, beat the odds once before.
