Forty years after the war, it is the ideals of the former South Vietnam that appear ascendant.

  • Motorbikes scoot past propaganda billboards in central Ho Chi Minh City on the morning of April 30, 2015.
  • Communist victory propaganda on Le Duan Street in central Ho Chi Minh City. The text reads, “celebrate the 40th anniversary of the liberation of the south.”
  • Aerial view of Nguyen Hue Street, in the center of Ho Chi Minh City’s District 1.
  • A scene in central Ho Chi Minh City.
  • Communist propaganda sits alongside fashion displays at the Diamond Plaza department store in central Ho Chi Minh City.
  • Communist billboards reflected in a fashion display at the Diamond Plaza department store.

HO CHI MINH CITY—ON April 30, 1975, the army of communist North Vietnam took Saigon, toppled the government of South Vietnam, and brought two decades of American military involvement in Vietnam to an end. Today the fall of Saigon is defined, at least in the west, by two indelible images. The first, taken by the late Dutch photographer Hugh Van Es, shows a line of desperate Vietnamese trying to board an American helicopter from a rooftop in downtown Saigon. The other image was captured on film by the Australian journalist Neil Davis: It showed a North Vietnamese tank, bristling with diminutive bo doi infantry, smashing through the cast-iron gates of the Presidential Palace, climbing to its roof, and running up the standard of liberation.

In their own way, both images were a fittingly shambolic testament to a war that was hastily conceived, poorly planned, and conducted with brutal indifference to the people of the country that it ostensibly sought to save. The U.S. intervention in Vietnam cost the lives of around 3 million Vietnamese and 58,000 Americans, devastating the country’s physical infrastructure and setting its development back by decades. Forty years on, those who are old enough still remember the mixture of fear, relief and uncertainty that marked South Vietnam’s final days and the end of the war. “On April 30 there were tanks in the street here. Saigon was very chaotic,” said Nguyen Quoc Kien, 48, the owner of a coffee shop in Cholon, the Chinese district of Saigon. “I remember a girl – she was shot at a roundabout because she was a Viet Cong.” Pham Van Minh, 67, a former engineer in the South Vietnamese navy, remembered an eerie calm. “We were very happy to have peace, to have the war finished,” he said, crossing his fingers and jabbing them to emphasize the closing of one era and the beginning of another.

Last month, Saigon – almost no one here calls it by its official name – marked the 40th anniversary of the great communist victory with lavish parades and reenactments. In preparation, the center of town was plastered with even more communist propaganda posters than usual. These blared the familiar socialist imagery: swooping doves, charging tanks, Uncle Ho etched on slabs of blue and red, beaming like a communist Colonel Sanders.

The city of Ho Chi Minh has become a place of wild economic energy, a mainspring of economic renovation, the hub and pulsing heart of a great Vietnamese Capitalist Party.

For years Vietnam’s communist leader was the most potent “brand” in the city bearing his name. But Saigon today is a very different place. Two decades of economic growth have created a burgeoning consumer class and Uncle Ho faces increasing competition from the corporate icons of the West. On Dong Khoi Street in the heart of old French Saigon, glitzy boutiques sell the most exclusive European fashion brands. Not far away, the high-end Diamond Plaza shopping center seems almost defiantly bourgeois, considering it sits on a street named after a famous communist leader, beneath a row of illuminated signs proclaiming, “Celebrate the 40th anniversary of the liberation of the south.” Next to the advertisements for Lancôme and Burberry and Salvatore Ferragamo are posters covered with ideological exhortations and cartoon proletarians, their arms raised in militant salute.

Forty years after the great communist victory, the ironies of Vietnam’s brand of “market-oriented socialism” have been dialed up to a high pitch. Far from a monument to its austere namesake, the city of Ho Chi Minh has become a place of wild economic energy, a mainspring of economic renovation, the hub and pulsing heart of a great Vietnamese Capitalist Party.


When Saigon fell, Than Trong Phuc was 17 years old, in his second-last year of high school. He came from a family that was solidly republican: his father was a retired officer in the South Vietnamese army and his mother worked at the U.S. consulate in Danang, close to one of the largest American military bases in South Vietnam. In early 1975, as the communists launched their all-in offensive against the southern regime, overrunning the Central Highlands and taking Danang in March, Than’s family relocated to join him in the capital where they waited out the final days. As the relatives of an American employee, these were among the lucky few eligible for evacuation and resettlement in the U.S. On the evening of April 29, nine members of Than’s family crowded onto three scooters and drove through the empty city streets towards the fortified U.S. embassy compound on Thong Nhat Boulevard. Just after midnight, Than was plucked from the roof and choppered out of his homeland.

For many years, Than put Vietnam behind him. After short spells in Minnesota and Florida, the family finally settled down in Torrance, California. Than graduated with an engineering degree from the University of California at Davis and, in 1986, went to work for the computer giant Intel in Santa Clara. There he built a solid career, as the firm rode the 1990s consumer computing boom. One day in late 1999, he took a call from one of the firm’s executives. “He said to me, “look, we are expanding to Vietnam, are you interested in going back?’” Than recalled. “Of course I said yes.” In January 2006, Intel announced it would construct its largest chip assembly plant in Ho Chi Minh City, an investment that was eventually worth $1 billion.

Than Trong Phuc is just one of thousands of viet kieu, or overseas Vietnamese, who have returned to do business in the land of their birth. “When I left I never thought that one day I would come back,” said Than, now the managing director of DFJ VinaCapital, one of Vietnam’s first venture capital funds. “When the Intel idea came up I said, oh, Vietnam’s opening up, so here’s a chance to do something meaningful.”

Between Than’s departure as a refugee and his return as a businessman, Vietnam had come a long way. When the war ended, 70 percent of the population lived below the official poverty line. This was only compounded by the vindictive campaign waged by the U.S. government. Humiliated by its defeat in the war, Washington imposed a trade embargo, cutting off the devastated country from most of the Western world. Socialist Vietnam became an international pariah state, reliant on handouts from the Soviet Union. To be sure, Communist policies shared some of the blame. After the war, the party introduced collectivization and land reform policies that hit agricultural production hard and drove tens of thousands to flee the country on leaky boats, seeking better lives in the West.

In 1986, the party discarded hardline socialist policies and announced doi moi, a campaign of economic reforms aimed at creating a “socialist-oriented market economy.” Hoisting high the banner of socialism, the government embraced the market. Foreign investors arrived, and the economy grew. By 2000, the poverty level had fallen to 32 percent; twelve years later, it was just 11.3 percent. In that time, the country’s GDP grew by an average of nearly 6.5 percent per year. In 2007, Vietnam brokered a trade deal with the U.S., its former enemy, and joined the World Trade Organization. Thirty years after victory and reunification, communist Vietnam was hailed as Asia’s newest tiger economy, a fully integrated member of the global capitalist economy.

Today, amid the manifold ironies of hammer-and-sickle capitalism, it would be reasonable to revisit the question of exactly which side won the war. Reflecting on a changing Vietnam, Than Trong Phuc said the insistence of Vietnam’s socialist propaganda masked the fact that it no longer had any relevance outside of a small “legacy group” in the party. “It’s just a façade,” he said. “Nobody gives a hoot about the hammer and the sickle… They don’t want to lose face, they don’t want to lose face that we won the battle, but we may have lost the war.”

‘Interest Groups’

Sometime around 2011, a new phrase entered the popular lexicon in Vietnam. Seemingly overnight, talk of nhom loi ich, or “interest groups,” was everywhere, especially in the country’s newly flourishing blogosphere. The reason was a string of high-profile corruption scandals involving the friends and relatives of powerful members of the Vietnamese Communist Party.

Corruption and nepotism were nothing new in Vietnam, but an economic downturn had suddenly focused public ire on the new elite class that was using its political connections to get rich. With internet access spreading rapidly, critics also now had a way of circumventing the state’s tight control of the press, which had previously kept these sorts of high-level scandals under wraps.

The phenomenon of “interest groups” came up frequently in a conversation I had recently with Pham Chi Dung, a former communist party member. Dung resigned his membership in late 2013, disgusted with the government’s unwillingness to tackle graft. “The origin of heavy corruption in Vietnam is one party,” Dung told me. “If we want to change this we must have multi-parties, democracy, and human rights.” In late 2013 Dung caused a stir when he penned an open letter explaining his reasons for renouncing his party affiliation. “Never before has corruption been so rampant at all levels,” he wrote in the letter, which was published widely online. “Never before have specific groups and political cronies benefited so profoundly from their cooperation [with the party]. Never before has the gap between the poor and the rich been so wide.”

“What we often refer to as ‘reform’ is as much about attempts by rival political-business interests to gain control over financial and other resources,” the British academic Martin Gainsborough wrote in 2002.

I met Dung at the Wheel House Café, an American diner-style establishment on a narrow street in the Tan Binh district of Ho Chi Minh City. The wiry 49-year-old sat on a red vinyl couch, leaning forward with one leg crossed over another, as he told the story of his disillusionment. In his youth, Dung was a true believer. He recalled the pride and excitement he felt on April 30, 1975, when news of the great victory reached Hanoi, where he was then living. The son of a high-ranking party figure, he graduated from the military academy in 1989 and joined the party as soon as he could.

Dung’s falling out with the party was gradual. At first, he understood why the party mandarins turned to market mechanisms to boost the economy, but working as a journalist for the state-run press in the 1990s, he saw first-hand evidence of the corruption and inequality that had replaced the ideals of socialist brotherhood. Later, he began putting his concerns in writing and sending them to Vietnamese publications overseas. In July 2012 he was arrested and spent five months in jail. The experience drained what hope he had left that the system could be reformed. “I decided that the Vietnamese Communist Party is not for the benefit of the people,” Dung said. “It is for interest groups.”

In 2013 Dung finally quit. He had decided to leave ten years before, but was afraid of losing the associated privileges. The next year he founded the Independent Journalists Association of Vietnam, which today boasts 82 members, 23 of them overseas. As an outspoken dissident, Dung is now followed everywhere by police and has had his passport confiscated by the authorities. Pausing between quick swigs of iced coffee, Dung reflected on his political evolution since his nine-year-old self cheered the liberation of the south. “Forty years, there’s been an incredible change,” he said. “My idealism about communism is broken, quite broken.”

Widening Gap

In recent years, the communist leadership has struggled to reconcile the party’s message of social justice and equality with the widening gap between the new elite and the bulk of the population. Despite the patina of wealth in cities like Hanoi and Ho Chi Minh City, poverty remains stubbornly high. This is especially true in rural areas and among members of Vietnam’s 53 ethnic minority groups, who make up around 13 percent of Vietnam’s population of 90 million, yet account for over 40 percent of its poor.

In recent years, popular discontent has found an outlet in a rising number of labor strikes, which now occur at an average of around 1,000 per year – or three per day, according to Tuong Vu, an associate professor of political science at the University of Oregon. In March this year tens of thousands of garment workers at a Chinese-owned factory on the outskirts of Saigon walked off the job to protest a new insurance law that would prohibit workers from collecting a lump-sum insurance payment if they resign.

On a humid morning in late April, I met Nguyen Van Hoang in an empty lot next to bustling Tran Phu Road, near a strip of shops selling garish framed art prints. On the whole, the 55-year-old cyclo driver was impressed with the country’s growth after the past two decades. “Now that the Socialist Republic of Vietnam is oriented towards capitalism it is better,” he said. But while there were more opportunities for the young and well-educated, his lot remains tough. On a good day, he can make 100,000 dong (about $4.50) per day peddling passengers around town.

Lounging backing on the vinyl seat of his battered pedicab, he seemed torn between gratitude and hardship, between relief that the country is at peace and frustration at the lack of opportunities in the new Vietnam. “I’m living in two societies,” he said, “between the old one and the new one.”

In the new society, most people agree that the main problem is the close links between party leaders and the managers of Vietnam’s powerful state-owned enterprises. These account for around 40 percent of Vietnam’s economic output, yet are poorly managed and riddled with corruption. Tuong Vu said that the state’s continued ownership of Vietnam’s land and major productive assets had provided opportunities to place cronies in plum positions. “Those with political connections have benefited the most,” he said. “The state distributed the land and the assets to their cronies and friends and party members…they divided it among themselves, and that’s created a lot of resentment.”

In April 2012, the Vietnamese blogosphere went into a tailspin when To Linh Huong, the 24-year-old daughter of Politburo grandee To Huy Ria, was appointed the head of a state-owned construction company. Three months later, amid widespread criticism, Huong resigned her post.

Crony Capitalism

Then there is the family of the prime minister, Nguyen Tan Dung, whose children head the list of “red offspring” who have risen in the firmament of “market-oriented socialism.” Since taking office in 2006, Dung has proven himself to be a classic southerner, friendly to business, who has successfully guided Vietnam though a period of economic instability. But many say he has also presided over a slide towards crony capitalism and political back-scratching.

Vietnam’s new business-political nexus is well illustrated by Dung’s daughter Nguyen Thanh Phuong. Phuong is married to the viet kieu businessman Henry Nguyen, who holds a bustling business portfolio that includes a stake in a Los Angeles soccer team and the country’s first McDonald’s franchise, which opened in Ho Chi Minh City in 2013. She is also a formidable businessperson in her own right. She heads Viet Capital Asset Management, an investment fund, and a brokerage called Viet Capital Securities; she also served briefly as chairwoman of Viet Capital Bank, before stepping down amid an outcry about the family connections which allegedly delivered her the position. In a leaked diplomatic cable from 2006, Seth Winnick, the U.S. consul-general in Ho Chi Minh City, profiled the business successes of Phuong and her brothers. “There is no doubt that she is talented,” he wrote. “However, her rapid advance, and the many doors that opened for her and her two brothers are indicative of how the Vietnamese political elite ensures that their progeny are well placed educationally, politically, and economically.”

The government seems to be aware of its mounting legitimacy problem. At a local meeting in 2012, Nguyen Phu Trong, the party’s general-secretary, told reporters that “so many party members have gotten richer so quickly, leading a lavish life that is miles away from that of the workers.” In the past few years, the authorities have made a show of cracking down on corruption at the highest levels of government. Last year, the government sentenced three bankers to death for corruption and embezzlement, and handed down life sentences to a number of their accomplices. One prominent case involved a former executive at the Vietnam Development Bank who was convicted of misappropriating $93 million.

Over the years, critics have questioned the motivation of high-profile anti-graft trials in Vietnam. “What we often refer to as ‘reform’ is as much about attempts by rival political-business interests to gain control over financial and other resources,” the British academic Martin Gainsborough wrote in 2002. More recently, others have argued that the anti-corruption purge is connected with an internal power struggle between the prime minister and his main rival, the party boss Nguyen Phu Trong. “Part of it is political,” said Carlyle A. Thayer, a Vietnam expert at the Australian Defense Force Academy in Canberra. “It is to pull down allies in the banking sector, allies of the prime minister who have political cover.”

This struggle is only likely to intensify as Vietnam approaches the 12th Party Congress of the Vietnamese Communist Party, scheduled for early next year. Tu Vuong said that there were two broad groups in the party. On one side there is the “moneymaking faction,” a group connected to the prime minister which uses its access to power to enrich relatives and cronies.

“It has taken the path which has been about preserving the party rule, which is seen as the most important thing,” Hayton said. “Everything else has been up for negotiation.”

On the other is a “loyalist” faction retaining some adherence to the party’s founding values. With Dung set to vacate his office, there is some talk that he will seek the position of party boss, currently held by his rival. Either way, Tu Vuong said, he is likely to face considerable opposition. Bill Hayton, a journalist and author of the book Vietnam: Rising Dragon, said internal disagreements may crystallize around the issue of whether Vietnam should join the Trans Pacific Partnership, a U.S.-led regional free trade pact. Dung and his supporters are widely believed to support Vietnam’s membership. But while Hanoi and Washington have grown close in recent years, in large part because of China’s rise as a global power, many others in the party remain deeply suspicious of “peaceful evolution” towards the democracy advocated by the U.S. “They regard it as a sinister threat to the rule of the communist party, the idea that through the power of Facebook and Starbucks, the Americans will overthrow the communist party,” Hayton said. “They are reluctant to have any kind of partnership which kind of gives the U.S. a say in Vietnamese politics.”

Loyal Protest

Whatever happens, the party faces will face challenges sustaining the economic growth and beating back corruption, the main things it will need to do to maintain popular support. However, Hayton pointed to recent signs of accountability in the party. Earlier this year, when authorities in Hanoi announced plans to cut down 6,700 trees across the city, outraged residents mobilized to oppose the plan. A Facebook group was formed and received 20,000 “likes” in the first 24 hours. The state media was let off the leash and ran op-eds and news stories about the opposition to both the tree-culling plan, and the poor state of decision-making in general. “Good, transparent governance is what people demand,” one concluded.

Eventually, Hanoi’s authorities put the tree-cutting on hold and promised to reconsider the policy. Hayton sees it as a rare and promising sign that the system might be capable of change. “People used the system,” he said. “They protested, but they were loyal. They used the media and they used their connections. That’s probably more significant than the dissident activities… It embodies a sense of dynamism within the party.”

It remains an open question, however, whether the party will allow more fundamental conversations – about history, the war, and what came after. In the official commemorations at the end of April, the communist party presented the war as the latest in a long line of Vietnamese victories against foreign invaders. Somewhere between Marx and Mastercard, the party quietly discarded its socialist inheritance. Hayton said it was just one of the many pragmatic adjustments it has made to remain in power. “It has taken the path which has been about preserving the party rule, which is seen as the most important thing,” he said. “Everything else has been up for negotiation.”

In his recent two-volume book Ben Thang Cuoc (“The Winning Side”) journalist and army veteran Huy Duc reflected on his experiences of Vietnam since the end of the war. In hindsight, he wrote, it was the south that liberated the north, rather than vice versa. The book has been controversial in Vietnam, but Tu Vuong said its enthusiastic reception was a sign of a growing understanding that the communist victory of forty years ago marked the end not just of a foreign occupation, but also the end of a bloody civil war, and the victory of one particular vision of Vietnam’s future. Perhaps one day, forty months or forty years from now, another vision will emerge.

Published in The Diplomat magazine, May 2015.