Plans to revive the coffee industry that the French had started in the 1920s began a few years before FULRO’s disintegration. Like almost everything else in agriculture the government touched in the 1970s and 1980s, the early results were disastrous. “Yes, we had a small failure,” ad¬mitted Thai Doan Lai, who ran a state-owned coffee company in Ban Me Thuot. “The government tried to tell farmers everything, even where to plant their trees, and it really had no idea what it was doing.”
But doi mol allowed farmers to keep their profits and lessened the state’s role in production. It offered tax incentives and subsidies when the world price fell below certain levels. And by the time I got to the High¬lands, everywhere I went farmers were abandoning their beans and corn and planting coffee. Thousands of new settlers were rushing in, much to the dismay of the indigenous Montagnards, and claiming land for coffee plantations. A lot of it had been handed out by the Party to senior mili¬tary men. Times were good, and an entire region was being lifted out of poverty. Some farmers were earning $3,000 per year—about ten times the national average.
“I never dreamed coffee could do this,” said a thirty-five-year-old farmer, Y Mum Eban, with whom I chatted. He had built a spiffy home, bought a TV set and two motor scooters—“one of them a real luxury model”—and worked his three-acre farm with a tractor. “More coffee,” he said. “That’s the answer.”
Success came at a price. Farmers and settlers were clearing land for coffee production at such an alarming rate that Hanoi issued a new decree to protect the forests and stop erosion. Most people ignored it. In Dak Lak Province, which accounted for 60 percent of Vietnam’s coffee yield, the forest cover had been reduced from 70 to 15 percent since the end of the American War. At the same time, the acreage devoted to cof¬fee increased eighteenfold.
International agriculturists worried that Vietnam’s obsession with in¬creasing coffee production to garner foreign currency had led to unsus¬tainable farming practices. One example they cited: The widely used fer¬tilizers that accelerated growth were so strong they had made Vietnam’s per-acre yield the world’s highest. The downside was that they “burned” the soil and destroyed nutrients the next generation of farmers would need. But having been poor so long, the benefactors of the coffee boom were willing to let tomorrow’s farmers worry about tomorrow’s problems tomorrow.

THERE WERE A LOT OF REASONS TO BE UPBEAT about Vietnam’s long-term economic prospects. The country’s 80 million inhabitants, with increasing access to discretionary income, represented a huge consumer market. The labor force worked cheap (minimum daily wage: $1.28) and had brains (the literacy rate was 91 percent). Vietnam had resources—off¬shore oil as well as natural gas, coal, phosphates, manganese, forests—and a 1,900-mile coastline whose waters teemed with fish. Perhaps most im¬portant, it had hard-working, reliable people who thirsted for knowledge and were obsessed with education. I had no doubt that if the government just got out of the way and let its people exercise their inherent strengths, Vietnam could have advanced light-years instead of miles in terms of so¬cial, political, and economic development. Vietnam was like a racehorse whose jockey kept yanking on the reins rather than giving the animal its head to find full stride.
The Party bosses seldom acted until their collective backs were to the wall. When they weren’t sure which way to turn, they would fall back on Ho Chi Minh and ask, What would Uncle Ho have thought and done? But Ho didn’t leave behind extensive writings and treatises, and the thoughts of Ho remained something of a mystery. The Party’s intellectu¬als gathered with instructions to come up with a generalized definition of the “Thought of Ho.” After months of deliberation, there was no consen¬sus. Sixty separate definitions were offered. The search went on.
The summer of 2000 was one of those times when backs were to the wall. Just when everyone thought the turtle pace of reforms meant the politburo had fallen asleep at the switch, there was a shot of good news: Bulls started running on Chuong Duong Street. After seven years of talking, backtracking, and planning, the Ho Chi Minh City Stock Ex¬change—the world’s newest and smallest exchange—was finally open for business, and it didn’t take long to figure out that the veins of many good communists flowed with a generous supply of capitalistic blood.
“This isn’t like gambling, you know,” said Nguyen Thanh Tuong, a civil servant and nascent capitalist who, like most Vietnamese males, rated gambling up there with beer-drinking on the list of life’s great pleasures. He stood outside the converted French villa that housed the exchange, checking information on the listed companies that had been tacked to a bulletin board. “Gambling involves risk. With stocks you can study the company and make an intelligent choice, and right now I’m sure these stocks are undervalued.”
In a matter of weeks the Saigonese had become such enthusiastic big- board watchers that they’d often show up at brokerage houses at 7:30 A.M., their children in tow, and put in buy orders before heading off to work. The Party’s doctrine still considered profit an unsavory accomplish¬ment, and anyone with wealth was a target of public suspicion. But no matter. All of Ho Chi Minh City was abuzz with investor talk. The newspapers started printing stock prices and reporting the daily closing of the Vietnam Index. Within six months the index had more than doubled, even though the nervous government had decreed that stocks could not rise or fall by more than 2 percent a day.
“I stood on the floor of the New York Stock Exchange on one visit to the United States and said to myself, ‘Vietnam’s won’t ever be this big, this active,”’ the exchange’s deputy director, Tran Dac Sinh, said as we looked out over the small, orderly trading floor where a half-dozen deal¬ers, most just out of college, took telephone and computer orders at their desks. “Still, things have gone better than we dared hope, and I think more and more people will invest because of the possibility prices will go up.”
Certainly Vietnam’s exchange, which opened more than a decade after China’s, had some catching up to do. Only four companies—an electrical manufacturer, a utility, a paper company, and a warchouse-transforward- ing firm—were listed, and three of the four were state-owned enterprises. Share prices hovered at little more than $1 each. With prospective sellers reluctant to part with their holdings, total volume on some days—the ex¬change was open for two hours, three days a week—fell short of 50,000 shares.
But the important aspect of the Ho Chi Minh City Exchange was simply that it had opened. It was a necessary step in attracting foreign capital. And it underscored a fundamental fact in Vietnam’s transition from a traditional Marxist economy: However frightened the govern¬ment was about the impact of free markets, there was no turning back. Its very survival depended on delivering the improved living standards, the opportunity for meaningful employment, and general economic growth the Party had promised. A state-run economy had no hope of achieving those goals. Only free enterprise could.

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