Vietnam

Pham Duc Phong, Director of the Office of Public Property Management in the Vietnamese Ministry of Finance, revealed on May 20 that 5.8 billion dollars in assets are unaccounted for. Phong said the missing assets, made up primarily of property, luxury cars, and office equipment, came to light in a survey of more than 55,000 government agencies, and represent 29 percent of the total civil service assets of those agencies. Phong said, "We don't know what happened to the property," and suggested the blame for the assets failing to be accounted for was that "accountants don't know their jobs properly."

The revelation that there is corruption and graft spread throughout the government in Vietnam is not new. Indeed, since Vietnam "opened up" to foreign investment, there have been two significant consequences of this corruption. First, as foreign investors discovered its true depths in Vietnam, they rapidly decided not to commit large sums to the country. Second, regional and local corruption has triggered protests and threatened civil stability in some areas. On May 20, 250 Vietnamese from outlying provinces gathered outside the National Assembly in Hanoi to demonstrate against regional and local government corruption. They complained that their local officials had tricked them, lied to them, and stole from them, but they were unable to gain restitution at any other level. The protestors have vowed to stay outside the assembly until they receive a response from the government.

The government has already taken several steps to address the problem. Vietnam's largest graft trial was held earlier this month, and the Finance Ministry has begun plans to conduct audits on state owned enterprises by the end of the year. On May 18, the Communist Party launched another self-criticism campaign as well. In fact, the survey that discovered the losses in the first place was in part to review government operations. However, while the government has acknowledged that corruption exists and needs weeded out, the release of the figures of missing assets opens up a new battle within the government over who is responsible.

This will be a battle of high stakes. For nearly one-third of the assets to be missing demonstrates the depth of corruption in the government. As well, there is the continuous struggle between the more hard-line communists and the more pro-western reformers, neither of whom are willing to accept the blame for this scandal. The political battle to attribute blame may also have a major effect on Vietnam's economic reform process as well.

There are two main possible outcomes of this financial and political battle. In the worst case for investors and businesses, there could be a purge from the government of true reformers, thereby further institutionalizing the already rampant corruption. While this would severely set back any moves toward a more transparent economic system in Vietnam, it would maintain the status quo for investors and other cronies of the administrative elite who are already operating within the system.

On the other hand, the battle could instead help to purge the most corrupt out of the government, laying the groundwork for a better investment climate. This would be welcomed by the international community, which has been pushing Vietnam to speed up its reform process. However, despite the more accessible investment environment that would open up over the next few months and years, there would be a change in the contacts within Vietnam, as many of those dealing with foreign investors may be removed in the purge.

As Vietnam continues to decide its financial future, a battle of high stakes has begun. The result of the political changes this may cause will carry over into the investment environment in Vietnam. A further entrenching of corrupt and secret economic practices may occur. Contrarily, as corrupt officials are identified and weeded out, Vietnam could present a more inviting location for investment dollars, though with a whole new set of players. Either way, the political and economic situation in Vietnam will enter into a period of turmoil as these issues are sorted out.

The 25th anniversary of the end of the Vietnam War and the 30th anniversary of the tragedy at Kent State University generated a round of reflection on the origin and meaning of the Vietnam War. Much of it treats the Vietnam War as a series of errors and misjudgments on the side of America.

There is certainly truth in that; this explanation, however, does not go deep enough. The war was not an accident; it arose from the fundamental grand strategy the United States pursued after World War II. If Vietnam was a mistake, then the grand strategy was in error. On the other hand, if the grand strategy worked - and in retrospect it seems ultimately to have done so - then Vietnam as a war was inevitable.

One of the most important and forgotten concepts of the era is the notion of credibility. The Johnson administration argued that the war was a test of the credibility of American guarantees and will power. To the extent that the notion is remembered, it is treated as an American neurosis. It was, in fact, both the root cause of the decision to escalate the war and a rational and defensible principle. Paradoxically, it also meant that the United States would be defeated in the war.

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Who was America trying to impress by a demonstration of its credibility? It was not so much Ho Chi Minh as it was Charles de Gaulle. U.S. strategy in the Cold War was an attempt to encircle first the Soviet Union, and then the Soviet Union and China together, with a string of American allies. The objective was the creation of a barrier against expansion while also forcing Moscow and Beijing to distribute their forces on multiple geographically diffuse fronts, decreasing their ability to concentrate for an attack. Very early on, the United States created alliances that stretched from the North Cape of Norway to Hokkaido in Japan.

The United States had guaranteed the security of these countries, but the guarantees contained built-in ambiguities:

The entire alliance system depended on allies having confidence in points four and five. If allies did not believe the United States would place its own forces - or the United States itself - in harm's way, then the rationality of points one, two and three was dubious in the extreme. This set of calculations affected all the allies. But none felt the impact more than the West Germans and NATO.

In the 1950s, Eisenhower's doctrine of massive retaliation was less a nuclear strategy than a response to alliance concerns about the credibility of U.S. guarantees. Eisenhower did everything he could, doctrinally and operationally, to convince the Europeans that the U.S. commitment to Europe was absolute and automatic; U.S. reinforcements would be sent instantly and nuclear weapons would be used automatically if needed to halt a Soviet attack. Stationing U.S. forces in Europe was as much a political attempt to convince the Europeans of a massive U.S. response as it was a military necessity.

The problem with all the guarantees, of course, was that they meant nothing. Whether Washington would live up to its commitments would not be known until the moment it was necessary to honor them. The doctrine was clear, but no one - not even the Americans - actually knew what a sitting president would decide at the critical moment. Thus, there was a deep uncertainty embedded in the alliance structure that revolved around the credibility of American guarantees.

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The Soviets attempted to exploit this uncertainty by generating periodic crises in Europe and elsewhere; the goal was to demonstrate the essential unreliability of American guarantees. Berlin was the archetypal example. The Soviets forced massive U.S. exertions to defend a strategically irrelevant asset. For the Americans, credibility became an indivisible entity. Failure to honor any commitment - regardless of its marginality - could unravel the alliance.

The Soviets naturally probed at this fault line. The fault line emerged as a fundamental issue in Europe in the late 1950s and 1960s, following the election of Charles de Gaulle as president of France. De Gaulle argued that the European dependence on American guarantees was dangerous. De Gaulle was completely anti-communist, but his view was that each nation pursues its own national interest. He argued that at the moment of truth, the United States would certainly not risk Kansas City to defend Frankfurt or Marseilles.

Europe, he argued, would have to develop its own nuclear deterrence independent of the United States and an armed force independent of the United States. If independence meant that Europe would have to reach some political accommodation with the Soviets, this was not only acceptable, but desirable. It would create a balance of power between the Soviets and the Americans, increasing European power.

Ultimately, de Gaulle's arguments were not persuasive because the United States managed to maintain its precious credibility through the Berlin Airlift and successive crises in Greece, Turkey, Korea and Iran. The foundation of credibility was disproportionality. Nuclear war for the defense of Europe was, by definition, disproportional to U.S. interests. In turn, any sign of proportionality would immediately destroy the value of the guarantee - and unravel the alliance.

Both John Kennedy and Lyndon Johnson approached the Vietnam question from a standpoint fundamentally unconnected to Vietnam itself. They were far more concerned with what the Germans, Italians, Turks, Iranians and Japanese thought about American will than they were with the particulars in Vietnam. Vietnam wasn't about Vietnam; it was about the credibility of American guarantees to other much more valuable allies.

Many allies opposed the war. But, paradoxically, had the Americans said that Vietnam just wasn't worth it, everyone would have wondered whether they were worth it. Thus, Vietnam was no accident. It was rooted in the grand strategy of the American alliance system. The main purpose of the American intervention was to demonstrate the Kennedy principle, which was that we would bear any burden in fighting the communists.

The problem we encountered in Vietnam was a massive disproportion of interest. The North Vietnamese were pursuing fundamentally important geopolitical interests that could have been attained directly from the war. The United States was pursuing fundamental geopolitical interests that had nothing to do with the war. The North Vietnamese were engaged in total war, aided materially by the Soviets and Chinese, who both saw an opportunity to undermine American strength. For the United States, total war made no sense.

The amount of effort expended far exceeded the American interest in Vietnam - but was completely insufficient to achieve victory. Victory could not be achieved by a purely defensive war. Washington needed forces sufficient to threaten the survival of the North Vietnamese regime. A force capable of that would have to have been orders of magnitude greater than what was deployed - and would have completely unbalanced the U.S. strategic posture.

In hindsight, many would argue that the United States should have conceded Vietnam. In order to make this case, it is necessary to argue that in 1963, the United States would have had to announce that it was withdrawing support for the Saigon regime - and that this would not have destabilized its alliance system. In reality, Gaulist sentiment in Europe would have grown and tremors would have gone through the allies. Such an announcement would have undermined the American record of disproportionate commitments to its allies.

This was the central dilemma. And here is the kicker. It was ultimately easier to be defeated in Vietnam, having given it a massive, disproportionate effort, than to have declined combat or withdrawn without defeat. Defeat raised questions about judgment, strategy and competence. It did not raise questions about the willingness to defend allies. It did not threaten the grand alliance by raising questions of credibility.

Far from being a miscalculation, a misunderstanding or a mindless show of machismo, the war was an unintended but almost inevitable consequence of a rational strategy that ultimately worked. If the grand strategy made sense, then Vietnam was a war that had to be fought. If the grand strategy could have been abandoned, then Vietnam could have been avoided; history ultimately, though, might have been far different. This is, of course, small comfort to the war's many victims; the logic of history, however, is rarely kind.