Challenges to Vietnam’s State Capacity

State-building is an enduring process dating back from the 13th century. Since the emergence of modern states, there has never been a smooth and flat road for states’ development. States, ranging from strong to weak or from rich to poor, all have difficulties in every step of the progress. However, different states with a different history, society and nature will have to face up to different challenges, especially the challenges to state capacity which is a fundamental element of maintaining a state. Vietnam is not an exception.

Being a developing country, the challenges to Vietnam’s state capacity are understandably numerous. Among those varied challenges, this essay, based mostly on the study of Vietnam in the last decade, will identify and explicate three most prominent challenges to Vietnam’s state capacity, namely corruption, territorial disputes and participation in the World Trade Organization (WTO). The essay also sheds a light on how these factors challenge state capacity in every respect of life.

Of all the elements that are crucial to maintain and develop a state, state capacity is one of the most important. Stronger states have greater capacity and reversely, greater capacity makes far more powerful states. For a short definition of capacity, it is the ability of the state to do fundamental tasks of providing its citizens with security and bringing together freedom and equality [ (O’Neil, 40) ].

These basic tasks vary from implementation of policies and taxation, to the supply of fundamental needs to every person within the state such as infrastructure, education, entertainment and so on. A state with high capacity is able to guarantee stability and security for both itself and its citizens. On the contrary, a low-capacity state can not do these things efficiently. To this extent, Vietnam is a typical example which is examined carefully in this essay.

Since its independence in 1945 and unification of the North and the South in 1975, Vietnam has put great effort into both repairing the aftermaths of war and developing the country. French domination over nearly 60 years and decades of war with both France and America have left Vietnam with “not only a legacy of heavy war damage and extremely impoverished economy, but also institutional structures that were to have a profound influence on economic policy” [ (Thang 2000, 22) ].

After a 25-year process with great effort in transforming all sectors of life, Vietnam in the 21st century has got a new appearance, especially the maturity of political institutions, higher speed of economic growth and better living conditions for the whole community. However, these improvements are not to the sufficient level that can ensure the stability and security of the state in the first decade of the 21st century. In fact, there are still many obstacles that are attracting public concern from both inside and outside the state.

The very first challenge to the state capacity of Vietnam is corruption. According to the Corruption Perceptions Index (CPI), Vietnam owns a very high level of corruption during the last decade. It ranks 2.7 on the scale from zero (serious corruption) to ten (clean) [ (Linh 2010) ]. It is also reported that in 2007 alone, Vietnam discovered 584 cases of corruption involving nearly 1,300 people, which caused total losses of over 865 billion Vietnamese dong (roughly 54.1 million U.S. dollars) (Vietnam detects 584 corruption cases in 2007, 2008).

This serious corruption takes place in almost every sector in Vietnam such as bureaucracy, education, construction and infrastructure and so forth. Seniors are offered bribes in exchange for promotions. Contractors cut down expenses for the construction by replacing high-quality materials with low-quality ones; then make those expense differences become theirs. Teachers get valuable freebies and give students good grades. These things happen everyday and everywhere, which day by day raises public indignation.

Corruption is a very big challenge to Vietnam’s state capacity as it increases inequality and at the same time decreases the legitimacy of the government. Firstly, it challenges the state capacity in ensuring equality among the whole society. In most cases of corruption, wealth is concentrated in the hands of a minority of population as money and properties go to the pockets of those who have power and position. Vice versa, good positions and promotions are given to those who have money instead of genuine ability.

The burden of corruption falls on the poor since they are not able to afford the bribes to get good education, health care and other services (Myint 2000). Secondly, corruption, by creating inequality within the society also reduces the legitimacy of the government in the eyes of its citizens. A government which is seriously corrupted is hardly able to implement laws and policies efficiently.

Moreover, the capacity of the state to invest in national projects is also diminished because of serious losses of revenues caused by corruption. Businesses and companies in Vietnam pay bribes to get reduction of taxes, fees, dues, custom duties and public utility charges such as for water and electricity (Myint, 49). Thus, in direct or indirect ways, corruption is still a great challenge to the state capacity of Vietnam that both the government and citizens are for years trying to find a resolution.

Secondly, apart from corruption which is a challenge emerges within the state, Vietnam at the same time has to confront with other challenges coming from the outside. These are the disputes over sea territory with China. For as long as thousand years of history, these two neighbours have always had disagreements about territory.

But during the last decade, the situation has worsened as both countries attempt to claim their sovereignty over the sea, especially the areas that include an important shipping route and other resources such as oil and gas deposits. The enduring disputes between Vietnam and China reached a peak with the Vietnamese government accusing a Chinese fishing boat of intentionally ramming its exploration ship in the South China Sea on the 27th of May, 2011. (Vietnam accuses China in seas dispute 2011). Since that moment on, there have been burning arguments and actions from both sides to affirm their own rights.

The disputes, emerging in recent years, have challenged the state capacity of Vietnam in two ways. The first problem comes from financial issues. To defend itself against the aggression of China over the territorial dispute, the Vietnamese government has had to invest a huge amount of money to upgrade its military capabilities. [ (Vu 2010) ] This is truly a difficult task as Vietnam has just experienced an economic crisis in 2009 and the economy is now in an instable condition. In the context of rising tensions on the South China Sea, Vietnam has to shift its spending priority into new projects. Instead of spending on economic development and improving living

standards of its citizens, the national budget is now paid for modern equipment and technologies to defend at sea. Examples of this equipment are the three aircrafts C212-400 ordered from the Autobus Military, the four Gepard class frigates and the project of building a new modern submarine brigade. This military equipment is no wonder costly. Therefore, paying for them means a reduction in payments for other projects which aim at providing basic goods and improving living conditions for the citizens.

Other than financial problems, the territorial disputes also challenge the state capacity as it diminishes the government’s legitimacy in the eyes of its citizens and provokes insecurity within the country. The disputes have stimulated nationalism during the whole course. The Vietnamese government’s effort to maintain peace with China is criticized to be the weakness in responding to China over the clash.

Thus, the government is under pressure of transparency in its policy and also judgments from the public on its legitimacy and effectiveness [ (Vu 2010) ]. Moreover, dissatisfied with the diplomatic resolution of the government, many Vietnamese have joined protests and marches in Ha Noi, Ho Chi Minh City and some other cities.

Though these are all peaceful protests, they still somehow create insecurity among the society. They offer good opportunities for the reactionary forces to operate against the government. Therefore, the territorial disputes have indirectly challenged the state capacity of Vietnam as they embed the state in a dilemma of dealing with external threats and ensuring internal security.

Finally, forget these internal and external threats mentioned above, Vietnam is trying to develop its economy by joining international organizations like the WTO. However, even this effort of the state also turns out to be a great challenge to its capacity. Joining WTO is not just gaining assistance unconditionally from the organization; it requires Vietnam itself to carry out a lot of transformation to meet the requirements of the WTO. Vietnam became a member of the WTO on 11 January 2007. Since then, it has made a lot of effort to accomplish its WTO accession commitments.

One among these commitments is to open its market by reducing tariff and non-tariff barriers. It challenges the capacity of the state to protect the indigenous market, including producers and consumers, from the mass flows of commodities from outside the country. Local businesses and producers need assistance from the government since they do not have much competitiveness especially when exposed to the global market.

Once more the state capacity is challenged by a dilemma. On the one hand, it is bound to provide assistance to strengthen the competiveness of local companies and businesses. On the other hand, it has to make sure that the assistance is provided in a reasonable period of time in order not to make those businesses reliant on state support which potentially diminishes their effort and competitiveness. Without having rational policies which are able to address these problems, the economy of Vietnam is likely to face up to a turmoil in the context of integration.

Participation in WTO challenges Vietnam’s state capacity not only in protecting businesses and producers from the flow of competitive commodities from outside, but also in safeguarding its people from being exposed to “harmful and exotic culture” [ (Diem, Phuong and Bich 2007, 28) ].

The relaxation of taxation to meet the accession period of WTO has stimulated import of both common goods and cultural goods. Thus, the Vietnamese government has to work seriously to ban harmful material from being imported into the local market and approached by local people. Furthermore, the government has to make great efforts to protect its own cultural values and traditions. It is now easier than ever for the Western cultures to flow into the territory of Vietnam by taking the advantage of open markets and the growing uses of IT and internet.

These exotic cultures once coming to the oriental culture of Vietnam may have negative impacts in the name of cultural shocks. They may lead to “degradation in morals and lifestyles and increase in social evils and crimes” [ (Diem, Phuong and Bich, 28) ]. Thus, the capacity of protecting the citizens from these harms created by the participation of WTO is genuinely challenged. Once more the perspective comes clear that joining WTO is not just an opportunity but rather a great challenge to the state capacity of a developing country like Vietnam.

In conclusion, though having reached a high level of development in the last ten years, Vietnam still has to confront many challenges, especially to its state capacity. Corruption- the most burning issue of the whole nation has constrained the state from ensuring equality among the society and its ability to improve living standards due to serious revenue losses.

Besides that, territorial disputes with China also reduce the government’s legitimacy in the eyes of its citizens and poses financial problems as the state has to shift priority to invest in upgrading military capabilities. Finally, being a member of the WTO is also a challenge to the state’s capacity in providing protection for the local producers and consumers in the face of massive flows of commodities into the indigenous market. This analysis shows that the prominent challenges come from both internal and external factors and challenge the state capacity of Vietnam with issues in all respects of life. References:

Diem, Ngo Van, Tran Viet Phuong, and Vu Thi Bich. “Social Impacts of Vietnam’s Accession into WTO.” Seminar Report, FSP Integration, 2007.

Linh, Khanh. “Government.” Vietnamnet. October 28, 2010. (accessed August 05, 2011).

Myint, U. “Corruption: Causes, Consequences and Cures.” Asia-Pacific Development Journal 07, no. 02 (December 2000): 46-51.

O’Neil, Patrick H. “States.” In Essentials of Comparative Politics, by Patrick H. O’Neil, 40. New York: Norton & Company, 2010.

Thang, Bui Tat. “After the War: 25 Years of Economic Development in Vietnam.” NIRA Review, 2000: 21-25.

“Vietnam accuses China in seas dispute.” BBC News. May 30, 2011. (accessed 08 09, 2011).

“Vietnam detects 584 corruption cases in 2007,.” People’s Daily Online. February 13, 2008. (accessed August 05, 2011).

Vu, Tung Nguyen. Vietnam’s Security Challenges : Hanoi’s New Approach. Joint Research, The National Institute for Defense Studies, Japan, Tokyo: The National Institute for Defense Studies, 2010, 114-117.