Vietnam’s ability to maintain political stability in the midst of economic transformation is seen as an attractive prospect for North Korea to emulate in its quest to prosperity.
North Korean leader Kim Jong Un in Vietnam.
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Vietnam’s Foreign Minister Pham Binh Minh traveled to Pyongyang on February 12 following North Korean Foreign Minister Ri Yong Ho’s visit to Hanoi last year. Ri's trip was reportedly aimed at studying Vietnam’s reforms, according to Yonhap News Agency. Such visits hark back to earlier years such as 2012, when a North Korean delegation visited the Vietnamese province of Thai Binh to examine rural development.
Just last month, Vietnam’s National Assembly Chairwoman Nguyen Thi Kim Ngan said the country was “willing to share an economic solution and know-how with North Korea,” reported South Korean newspaper Maeil Business at the time. Washington is in favor of the idea — US Secretary of State Mike Pompeo said last July that Kim could enjoy an economic miracle akin to Vietnam’s if he wished.
In the late 1980s, Vietnam embraced free-market reforms known as “doi moi.” That eventually opened the country up and resulted in its present socialist-oriented economy. Vietnam’s frontier market is now one of the world’s fastest-growing economies, thanks to an expanding middle class, strong manufacturing sector and young population.
"The country has already become a major exporter of textiles, electronic goods and footwear, among other items, with one in ten of the world's smartphones produced in Vietnam," Australian bank ANZ said in a recent report.
Powered by manufacturing, economic growth in Vietnam jumped from 2.8% in 1986 - when reforms were introduced - to 7.1% last year. Vietnam recorded its strongest expansion in more than a decade in 2018 and was one of the fastest-growing economies in the world that year. Kim, meanwhile, has promised to improve domestic development since coming to power in late 2011.
“North Korea has been willing to experiment with reforms under Kim Jong Un,” said Bradley Babson, who serves on the advisory council of the Korea Economic Institute of America, in a published note on 38North.
“Since 2016, these reforms have been expanded and greater emphasis has been placed on more decentralized decision-making,” he said.
Since last year, Kim has also embarked on a peace offensive to improve relations with the international community, reflected by his landmark meetings with the presidents of South Korea and the US.
Vietnam’s appeal
Upon arriving in Vietnam for the upcoming meeting with Kim Jong Un, US president tweeted “Vietnam is thriving like few places on earth. North Korea would be the same, and very quickly, if it would denuclearize. The potential is AWESOME, a great opportunity, like almost none other in history, for my friend Kim Jong Un.”
Vietnam’s appeal is for everyone to see, but more importantly, the country’s gradual path to development is intrinsically appealing to Kim, according to Fitch Solutions in a January report.
Vietnam began receiving assistance from the International Monetary Fund and the World Bank in the 1990s after it began enacting reforms. That was followed by significant foreign investment in the mid-2000s and membership to the World Trade Organization in 2007. Kim is a fan of small-scale reforms and would prefer this slow approach to economic rewards if it ensures political stability, Fitch said.
Vietnam has also maintained “geopolitical flexibility and relationship-building” — two qualities that “are likely to be admired” by Pyongyang, Fitch added. For example, Hanoi enjoys close ties with Washington despite stark ideological differences and decades of hostility during the Vietnam War.
"Vietnam's path from a mortal enemy to a friendly partner of the United States is particularly appealing to North Korea, who believes a good relationship with the United States can help create the right environment and necessary conditions for achieving North Korea's new strategic drive toward economic development," said Tong Zhao, a fellow at the Carnegie-Tsinghua Center for Global Policy in Beijing, was quoted by CNN.
Echoing the same view, Adam Sitkoff, executive director of American Chamber of Commerce (AmCham), told Hanoitimes that “in Hanoi, Kim will see first-hand what his country can become if he makes good decisions. Citizens of countries that join the world community and cooperate with their neighbors reap the benefits of a rising standard of living.”
In 1995 -- the year Hanoi and Washington normalized relations -- US exports to and imports from Vietnam were worth just U$252 million and US$199 million, respectively. However, in the first 11 months of 2018, the US exported more than US$8 billion worth of goods to Vietnam and imported goods worth US$45 billion, according to US Census figures.
Moreover, Vietnam has also managed to cultivate ties with many countries, including both Koreas, Russia, Japan and India.
Nevertheless, any North Korean attempt at liberalization will depend on the progress of ongoing nuclear negotiations. If Kim makes good on his promise to denuclearize, sanctions could be lifted, paving the way for Pyongyang to resume foreign trade.
“Progress takes time. North Korea will not transform overnight. And success it is not inevitable,” stated Sitkoff.
