The War Nobody Won 21

After driving the Khmer Rouge out of Phnompenh, the Vietnamese established a surrogate government. They halted the genocide and por¬trayed themselves as saviors, but their intention had not been to rescue Cambodians. They chiefly feared that the Khmer Rouge, spurred by China, would seize parts of Vietnam that, centuries before, Vietnam had seized from Cambodia. Khmer Rouge forays into Vietnam had begun as early as in 1977 and, in February 1979, Chinese troops streamed into Vietnam from the north. They were swiftly repulsed but, to the Vietnamese, the lunge signified Chinese encirclement. “When we look at Cambodia,” an official in Hanoi told me, “we see China, China, China.”
By then two hundred thousand Vietnamese were battling Cambodian factions—with Sihanouk peculiarly allied to the Khmer Rouge even though members of his family had died in the genocide. Moscow, to foil China’s aims, backed Vietnam while the Chinese, with Thailand’s cooperation, armed the Khmer Rouge. Tilted toward China, the United States opposed the Vietnamese puppet regime in Phnompenh—and even upheld the Khmer Rouge as Cambodia’s legal representative at the United Nations.
The imbroglio lasted more than a decade as the Khmer Rouge and Phnompenh regime talked and fought. Finally, in the summer of 1990, they consented to a UN peacekeeping force that would supervise elec¬tions. The Vietnamese had withdrawn from Cambodia the previous September, partly to placate the United States and also because Soviet aid had declined. A government was improvised in Phnompenh with Sihanouk as figurehead king and, somehow, it endured.
In 1977, President Jimmy Carter had endorsed an initiative to forge a link between the United States and Vietnam. He delegated the negotia¬tions to Richard Holbrooke, assistant secretary of state for Asia, who had served as a civilian official in Vietnam during the war. The talks opened in Paris and stalled as the Vietnamese insisted that Nixon’s pledge of “reparations” be fulfilled. They had factored the sum into their eco¬nomic plan but, untutored in the American system, did not understand it was up to Congress to vote appropriations. At the end of 1978, realiz¬ing that they had erred, they dropped the demand. It was too late. Carter’s national security adviser, Zbigniew Brzezinski, seeking to exert leverage on the Russians, argued that “normalizing” America’s quasi- official ties to China was more important. White House political experts concurred, noting that U.S. opinion was hostile to Vietnam over the issue of the missing Americans. Then came the “boat people’ exodus paralleled by the Vietnamese invasion of Cambodia. Recognition of Hanoi was relegated to a back burner, and remained there through the Reagan and Bush administrations.
It was also a low priority for President Bill Clinton. Attracted by rosy forecasts for Vietnam, numbers of American businessmen beseeched him to consider a relationship. But, having been both a draft dodger and an antiwar protestor, he felt vulnerable to criticism from Republicans as well as from elements within his own Democratic party. As he often did when confronted by controversy, he waffled—and might have contin¬ued to do so had not two members of Congress with impeccable war records urged him to act. They were Senator John McCain, an Arizona Republican, a former navy pilot who had spent nearly six years as a pris¬oner of war, and John Kerry, the Democratic senator from Mass¬achusetts, a decorated navy veteran. In February 1994, Clinton lifted the embargo on trade and investment with Hanoi—and at a small White House ceremony on July 11, 1995, announced full recognition. With his cabinet, congressional leaders, military brass and the heads of veter¬ans’ groups standing beside him, he said, “This moment offers us the opportunity to bind up our wounds. . . . Whatever divided us before, let us consign to the past. Let this moment, in the words of the Scripture, be a time to heal and a time to build.”
Its promoters applauded the gesture, but Vietnam fell short of their expectations. Labeled by the Communists “a market economy within a socialist framework,” its new structure was a euphemism for state capi¬talism. Government involvement in business was pervasive. The army was engaged in everything from building hotels to running golf courses. The ministry of agriculture sold fertilizer, the ministry of industry op¬erated textile factories. The foreign ministry charged visiting journalists fifty dollars a day for guides who earned one hundred dollars a month. Officials routinely favored relatives with contracts for supplies that, by no coincidence, were purchased by party and government bureaus.
The more they explored Vietnam, the more businessmen found it to be, as one said, “the biggest investment tease in Asia.” The bureaucracy was a swamp, the laws a tangle of bewildering regulations. Foreigners were barred from owning property, which enabled Vietnamese to ac¬quire a major stake in a joint venture just by contributing an overpriced site. Obtaining an investment license frequently necessitated the approval of a dozen ministries and committees—with payoffs at every echelon. Either jealous of their prerogatives, or out of inertia, local officials often ignored the reforms promulgated by Hanoi. Once, when the American Chamber of Commerce in Saigon planned a meeting, the People’s Committee of Ho Chi Minh City prohibited it on the grounds that the chamber lacked a permit for a public gathering. Commented a U.S. busi¬nessman: “The head of the dragon knows where it’s going, but I’m not sure the tail does.”
Accordingly, foreign investment faltered. Experts estimated that Vietnam needed $20 billion to sustain its growth until the end of the century but, by 1996, only $3 billion of the billions pledged had actu¬ally been dispersed. The leading investors, oddly, were South Korea and Taiwan, the most implacably anti-Communist nations in Asia. Despite predictions that they would dash in, American companies had invested less than $200 million—a large chunk of it in the offshore oil sector. Michael J. Scown, an American lawyer in Saigon, remarked to me that the Vietnamese had deluded themselves into thinking that the world was panting to get into Vietnam: “Businessmen are a tough bunch. They’re not going to put up with headaches when they have other options else¬where.”
In 1996, a group of Harvard economists, commissioned by the regime to study Vietnam’s progress, warned that despite the country’s phenom¬enal rebound, the “gains achieved so far are extremely fragile”—adding, “The reforms, begun with a bang, are turning to whimpers.” Among their proposals, they recommended that the ambiguous laws be clari¬fied, the rigid rules for foreign investors eased, the sluggish bureaucracy streamlined and the state monopolies dismantled in order to encourage genuine competition. Their assessment concluded: “The question is not whether Vietnam can succeed, for it can. The doubt is whether it will.”

But some Americans were optimistic. Eugene Matthews, a Harvard Law School graduate, settled in Hanoi in 1990 on the gamble that Vietnam would eventually become a ripe field for investment. He learned Vietnamese, and was later hired as a consultant by such corpora¬tions as Revlon, Lehman Brothers and American Express. Too young to have fought in the war or protested against it, he stressed that foreign businessmen could succeed in Vietnam if they took the time to under¬stand its strengths and weaknesses—and, above all, look forward rather than backward. “It’s a country, not a war,” he told me. “Don’t sell these people short.”
The United States did not begin to focus on Southeast Asia until World War II—and only because of its tangential link to the conflict with Japan. The few Americans familiar with the Vietnamese knew them to be passionately independent and atavistically hostile toward the Chinese. Their advice was disregarded in 1950, however, when President Truman decided to help the French regain their sovereignty over Indochina. He was prodded by his secretary of state, Dean Acheson, who maintained that France was crucial to U.S. policy in Europe. Acheson also advanced the “domino theory”—the notion that, unless the French were bul¬warked, Communism would engulf the region. His idea stemmed from the naive belief that Ho Chi Minh was a pawn of Russia and China— without examining the possibility that Ho was, like Marshal Tito of Yugoslavia, a nationalist committed more to Vietnam’s independence than to global Communism. So dubious assumptions propelled America into an area marginal to its real strategic interests.
As the cold war intensified, Southeast Asia became an international cockpit. But, for centuries, foreign powers had penetrated the region in quest of wealth or influence, or to counter the lusts of their rivals. No thrust had a greater impact than European colonial intervention, which transmuted new institutions and new ideas in the crucible of traditional customs and ancient values. The collision of East and West stimulated Asians both to resist and to adapt, infusing them with the vitality to re¬cover their identity, revise old practices and define fresh aspirations. The experience also stirred the Vietnamese—sowing the seeds of a struggle that was to culminate in more than fifty-eight thousand American names etched into a granite memorial in Washington.

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