Hanoi (AsiaNews/Agencies) - Corruption, inefficiencies and unresolved structural problems are putting at risk Vietnam's economy, deemed one of the strongest among emerging nations, but now feeling the pinch of the world's economic crisis.
The country's Communist government has promised reforms but, so far, has failed to deliver them. In a country where many government and party officials have benefitted from growth, little of it has trickled down to the majority.
Now the crisis is taking on great urgency. In some areas, house prices have dropped by up to 50 per cent and jobs are reportedly drying up for school graduates.
Foreign investment has dropped 34 per cent this year, with investors put off by the economic instability, poor infrastructure and rising wages.
Small- and medium-sized enterprises like those in Bat Trang (Gia Lam District, Hanoi) are struggling to stay in business, their stock piling up, unable to get credit to invest in new products and technologies.
Things are so bad that factory manager Phan Anh Duc said that four years ago up to 40 containers a day used to leave the area, heading to overseas markets. Now just one does.
In view of the situation, Vietnam's Communist leaders appear more interested in crushing dissidents and arresting activists, not to mention members of religious groups, especially Christians, rather than adopt serious reforms.
At present, the authorities are focusing on fighting corruption. State media have emphasised the arrests of business people and financiers. But the problem goes much deeper, involving the party itself. A few highly publicised arrests will not solve it.
Until 2010, the economy had been growing by more than 7 per cent on average from 2001, lifting millions out of poverty and leading some to predict the country would follow South Korea and Singapore in leaping to developed world prosperity within a generation.
But growth has now fallen to just over 4 per cent in the first half of this year, and is predicted to be around 5 per cent for the next two years.
Such a rate of growth might cause envy in Europe, but it is a partial defeat for Vietnam where average incomes are very low, inflation often far outpaces growth and good schools, hospitals and other basic infrastructure are still in short supply.
With concerns of contagion, the central bank pumped cash into the system to ensure banks are able to pay customers.
This might have averted fears, but it did not stop the stock market swooning because foreign investors are still worried about a crisis in the banking system and the effects of a power struggle within the ruling Communist party, which could destabilise the country.
Despite arrests and proclamation, experts remain sceptical the government has the will to fully clean up the system.