Part Two
The players

Chapter 4
Why government policy still matters in Vietnam
Cross-sectoral policy coordination or 'orchestration'

When this report was being prepared, a major shift occurred in Vietnam's economic position in the world economy. This shift altered the technological preconditions for modernization and growth in the country's economy. The long-term trade embargo against Vietnam, imposed and orchestrated by the US government, was lifted on February 4, 1994.

The total effects of the trade embargo on Vietnam's technological and other innovative capabilities are hard, even impossible to assess in economic terms. For nearly thirty years in the North and nearly nineteen years in the South it has been difficult for Vietnamese firms and institutions to obtain the best electronic equipment and other information technology for the money available. Solutions such as hand-carrying computers into Vietnam did not address problems such as long waiting periods for new equipment, high costs, lack of spare parti, and lack of after sales service.

There are ultimate examples of problems in the operation of industrial enterprises due to the trade embargo. A cement plant that could not buy the powerful Hewlett-Packard computers it needed was forced to develop a sub- optimal technical solution to its production control system, which eventually led to an explosion with death and injuries among its staff members.

Today, Vietnam has full access to the world market in the field of microelectronics. In the months before the lifting of the trade embargo, some electronics specialists claimed that the end of the US blockade would not fundamentally change the technological preconditions for economic growth in Vietnam. We think they are wrong. If the spectacular growth of industrial production in Vietnam continues during the 1990's, and if the improvements in the country's socio-economic environment gains speed, there will a strong demand for sophisticated products and services that previously were not easily available to Vietnamese firms and institutions.

It would be dangerous, we think, if the government -- at both the central and provincial levels -- backs off and leaves this volatile situation entirely to the new market forces. The government still has important roles to play, for instance by facilitating the diffusion of computers and other electronics applications through standard setting, creating a better economjc environment for the advanced use of information technology in all sectors of Vietnamese society, and devising a trade policy that will help stimulate electronics production inside of Vietnam.

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