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VN-Laos Weigh Foreign Investment’s Impact on Culture

By Nguyen Dinh Chuc, Trading Newpaper, Vietnam
     Douangchit Savatbounmy, Pasason Newspaper, Laos

The reform policies of Vietnam and Laos have had a strong impact on the growth of foreign investment in these countries. However, some people recognize that along with the increase in foreign investment, traditional cultural values must be protected.

Recently, in Bangkok, Thailand, Raymond Eaton, Chairman of the Integra Group, talked about "Indochina Investment Opportunities and Cultural and Ideological Resistance."

During the last eight years since the enactment of the Foreign Investment Law in Vietnam, more than 800 companies from 50 countries and territories have invested in Vietnam. By the end of April 1996, over 1,450 projects with a total investment of around US$20 billion in various economic sectors have been licensed.

In 1996, many important projects are expected to be licensed with a total capital of around US$6-7 billion.

"Hundreds of projects are being negotiated and executed by Vietnamese and foreign partners, among them a number of important projects, such as a refinery, thermal-power plant, cement plant, metallurgy factory, and facilities for the production of electronic components and chemicals." SSCI Minister Dau Ngoc Xuan said recently in Hanoi.

Foreign investment capital has been growing in terms of both the number of projects and the size of investment. Foreign investment in the first quarter of 1996 was more than five times that of 1988. There have been more projects of larger scale with capital of thousands or hundreds of thousand US dollars each. This shows increasing flow of foreign investment into Vietnam.

In his talk, Eaton recognized that "Vietnam has an attractive Foreign Investment Law". He also quoted Vietnamese Prime Minister Vo Van Kiet that "Vietnam is following a policy of industrialisation and modernisation with the aim of alleviating poverty and underdevelopment in order to have a strong country and a just and civilised country. To this end, we advocate the application of the market mechanism under the State for national development along the socialist line".

Also, according to Xuan, "The Vietnamese Government has issued more than 100 legal documents to concretize and provide guidance on the implementation of the foreign investment law, thus creating a more complete legal framework for foreign direct investment. So far, the Vietnamese Government has signed an agreement on investment, encouragement and protection with the governments of 26 countries on avoidance of double taxation with member countries so as to secure interest and safety of foreign investors."

Recently, foreign investment in Laos also has been developing rapidly.

According to Mr. Eaton, foreign investment in Laos now totals US$4.6 billion. Laos leader Khamtay Siphandone was quoted as having said: “The opening up of external economic relations and promotion of foreign investment is a major policy of the Party….According to that plan, we must open widely economic relations and cooperation with various countries, ensuring efficiency and true interests of the partners."

However, because foreign investment is increasing very quickly, many traditional cultural values could be damaged in Vietnam and Laos.

For example, the construction of many hotels around Hoan Kiem Lake in Hanoi has created an eyesore. The ravenous pursuit of money for itself also impacts on Vietnamese traditional life, especially where the younger generation is concerned. During the open policy of Doi Moi, the Vietnamese Government has been doing its best to promote Vietnamese culture and tradition.

Eaton quoted The Nation newspaper: "It’s uncertain how much longer the campaign to protect traditional values will go on or what new directions it may take. One thing that is obvious is that the country’s cultural purge has basically forced socially evil activities to go into temporary hiding."

About Laos, Mr. Eaton quoted a Western diplomat specialising in Laotian politics who commented that "the main thing that is driving the Laotian government is preservation of the Lao culture."

But another observer commented that "The Lao identity is in danger, especially among the younger generation and that the Government is promoting Laotian culture and tradition by organising festivals that emphasise unity among the 68 ethnic minorities in the country, people are very much attached to their traditions."

With the rapid growth of the economy and the continued influx of foreign investment in Vietnam and Laos, the question of whether these activities will damage traditional cultural values is likely to continue to be hotly debated.

 

Copyright 2009 IMMF.