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Vietnam's Rulers Take Capitalist Road After Long Struggle for Communism

Vietnamese model advertising Pepsi beams down upon the morning rush hour in Ho Chi Minh City
In April of 1975, North Vietnamese troops captured Saigon, and Ho Chi Minh's long-fought communist revolution in Vietnam was complete. But as the 30th anniversary of the communist victory arrives, capitalism is taking over the business sector, and even some communists are engaged in private enterprise.

As North Vietnamese forces advanced through southern Vietnam in April 1975, one of the soldiers on the communist side was young Luong Anh Dung. A native of Hanoi, Mr. Dung was inspired by North Vietnamese leader Ho Chi Minh, and joined the Army, he says, to fight for his country's unification.

After the war, Mr. Dung extended his loyalty, and his skills as an artist, to Ho's Vietnamese Communist Party. For nearly three decades, he has been one of the Party's leading propaganda painters. He designs many of the stylistic billboards and banners that are everywhere in Vietnam, urging citizens to stay true to the socialist path.

But in the last 10 years, Mr. Dung has branched out. Now, he also sells his communist propaganda to curious Westerners for a profit.

"Nowadays, we have a market economy, and selling my paintings doesn't go against the policy of the country," he said. "If Uncle Ho was still alive, I'm sure he would approve."

The irony of a communist propagandist-turned-entrepreneur speaks volumes about life in today's Vietnam. In the capital Hanoi, streets bustle with commerce beneath the socialist hammer-and-sickle insignia. Souvenir shops, Internet cafes, even once-banned bars and nightclubs, all vie for business - more enthusiastically if the customers pay in dollars.

The transformation began in the mid-1980s, when the Communist Party announced economic reforms known as "doi moi", or renewal.

Before the reforms, private commerce was banned, and the nation's farmers lived in agricultural collectives that handled all business and financial transactions. But "doi moi" allowed farmers to sell their crops individually. After that, the Party extended the freedom to engage in private enterprise to other sectors of the economy.

Another of Vietnam's budding entrepreneurs is Bui Thi Duyen, who used to work for a state utility company. In 1995, she left her job and opened a silk clothing shop in Hanoi's Old Quarter, and also the Polite Pub, one of the capital's oldest bars.

"Now it is capitalism. You are free to develop and have a good business with no problem at all. Life is getting much better compared to the old times," said Bui Thi Duyen. "There were fewer goods with fewer styles, then. Now, people have better income and better living standard."

Vietnam took its cue on allowing a free market, while the government and party keep firm control over political affairs from the Chinese, who began to open up their economy in the early 1980s.

Hanoi calls its blend of communism and capitalism a "market-based socialist economy." On the street these days, it's hard to locate the socialist part at all.

There are still some holdovers from the old command-economy days. Ramesh Adhikari, an economist with the Asian Development Bank, says the more than 2,000 state-owned companies, ranging from oil production to clothing factories, mean that Vietnam is not fully capitalist.

"It is moving toward a capitalist or market-based economy, but at the moment it may as well be characterized as a mixed economy. It's a bit of both," he described.

Still, there's no doubt Vietnamese have taken to private enterprise wholeheartedly. Nearly 50,000 privately owned businesses sprung up within two years after a new law, which eased restrictions on commercial enterprises, was passed in 2000.

Specialty shops now sell once forbidden imports like shortwave radios and satellite dishes. Laborers who once toiled in government collectives now flock to factories that supply to foreign companies such as Nike and The Gap.

And though foreigners are still banned from key sectors such as oil, the government recently lifted restrictions on overseas investment and products in other areas of the economy.

With Vietnam hoping to join the World Trade Organization later this year, it will likely be opening up more of its market to private enterprise, and even foreign competition. Thirty years after the communists won the Vietnam War, it increasingly looks like capitalism is winning the peace.