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 PREFACE i

VIET
NAM
a transition tiger?
ii VIET NAM: A TRANSITION TIGER?
 PREFACE iii

VIET
NAM
a transition tiger?
Brian Van Arkadie &
Raymond Mallon
Asia Pacific Press at
The Australian National University
iv VIET NAM: A TRANSITION TIGER?

Co-published by the ANU E Press and Asia Pacific Press

The Australian National University
Canberra ACT 0200, Australia
Previously published by Asia Pacific Press

National Library of Australia Cataloguing-in-Publication

Van Arkadie, Brian.

Viet Nam : a transition tiger?

New ed.
Includes index.
ISBN 0 9751229 2 4 (Online document)

1. Vietnam - Economic conditions - 1975- . 2. Vietnam -

Economic policy - 1975- . I. Mallon, Raymond. II. Title.

338.9597

All rights reserved. You may download, display, print and reproduce this
material in unaltered form only (retaining this notice) for your personal, non-
commercial use or use within your organization.

Edited by Matthew May, Asia Pacific Press

Cover design by Annie Di Nallo Design
All electronic versions prepared inhouse

First edition © 2003 Asia Pacific Press

This edition © 2004 ANU E Press and Asia Pacific Press
 PREFACE v

CONTENTS

Tables vi
Figures vii
Maps viii
Boxes viii
Abbreviations ix
Preface xi
Viet Nam and its recent experience with development
1 Viet Nam’s development experience 1
2 Geography, resources and population 11
3 Economic performance and key issues 27
The Doi Moi process
4 Prelude to reform: the attempted introduction of central planning 38
5 Political institutions and economic management 56
6 The introduction of Doi Moi 65
7 Strategic building blocks of Doi Moi 79
8 Ongoing reforms: building the institutions for macroeconomic
management 90
Enterprise development
9 Institutional change and business development 103
10 State enterprises 122
11 Household and private business development 153
Economic growth performance
12 The pattern of economic growth 176
13 Capital formation and external assistance 204
Income growth and poverty alleviation
14 Poverty alleviation 224
15 Causes of continuing poverty 235
16 Poverty, location and internal migration 239
Conclusion
17 Achievements of Doi Moi and future challenges 252

Statistical Appendix 267

References 274
Index 288
vi VIET NAM: A TRANSITION TIGER?

TABLES
1.1 Per capita incomes in selected Asian countries, 1950–98 5
1.2 Per capita income in Viet Nam, 1950–98 5
2.1 Biodiversity in Viet Nam 13
2.2 Key rural indicators in selected Asian economies 14
2.3 Population distribution by region, 1995–2001 19
2.4 Gross regional product per capita by major region,
1995–2000 22
2.5 Share of GDP by region, 1995–2000 22
2.6 Agriculture value-added by region, 1995–2000 23
2.7 Industrial value-added by domestic enterprises by region,
1995–2001 24
2.8 Total industrial value-added by region, 1995–2001 24
3.1 Average annual indicators of growth and inflation, 1976–80
to 1996–2001 28
3.2 Key indicators of economic developments, 1986–2001 30
3.3 Structural changes in the economy, 1986–2001 30
4.1 Comparative indicators of human development, 1990 52
6.1 Some milestones in the Vietnamese reform process, 1986–98 72
8.1 Allocation of bank lending to enterprises in Viet Nam,
1991–2001 100
9.1 Formal laws governing business entities 109
9.2 Share of industry group output by ownership,
1995 and 2000 116
10.1 Decision 91 State Corporations 134
11.1 Number of newly registered enterprises, 1991–2001 168
11.2 Average registered capital of new enterprises, 1991–2001 168
11.3 Newly established enterprises by region, 1991–2001 170
11.4 Cooperatives re-registered under new cooperative law 170
12.1 Annual growth rates, 1994–2000 180
12.2 Export performance, by main commodity, 1998–2000 183
12.3 Growth rates in selected Asian economies, 1996–2001 189
12.4 Average annual growth rates in paddy output and inputs,
1976–94 194
12.5 Industrial output, 1985–2001 199
 PREFACE vii

13.1 Gross fixed capital formation, 1991–2001 205

13.2 Investment, by ownership, 1995–2000 207
13.3 Allocation of state investment, 1995–2000 207
13.4 Savings–investment balance, 1995–2000 211
13.5 Foreign direct investment: disbursement by economic sector,
1988–2000 212
13.6 Manufacturing output by foreign-invested sector, total
and selected sub-sectors, 1995 and 2000 214
13.7 Annual ODA commitments and disbursements, 1993–2001 217
14.1 Food poverty and overall poverty headcounts in Viet Nam,
1993 and 1998 228
14.2 Poverty gap and poverty severity level headcounts for
Viet Nam, 1993 and 1998 231
A1.1 GDP at current price by economic sector, 1985–2001 267
A1.2 GDP at constant prices by economic sector, 1985–2001 268
A1.3 GDP growth at constant prices by economic sector,
1985–2001 269
A1.4 Retail price inflation—consumer goods and services,
1986–2001 270
A1.5 Total values of exports and imports, 1990–2001 271
A1.6 Merchandise exports by major commodities, 1992–2000 272
A1.7 Balance of payments, 1992–2000 273

FIGURES
1.1 Viet Nam’s per capita income relative as a proportion of
selected Asian economies’ per capita income, 1950–98 4
1.2 GDP growth in selected transition economies, 1980–2000 7
2.1 Viet Nam population pyramid, 1989 and 1999 18
2.2 Age dependency ratio in selected Asian countries,
1986–2000 19
3.1 GDP growth by sector, 1997–2001 28
9.1 GDP growth, 1986–2000 114
9.2 Share of GDP by sector, 1986–2000 114
12.1 Financing development and growth, 1986–2001 178
12.2 Export growth in selected Asian economies, 1986–2000 182
viii VIET NAM: A TRANSITION TIGER?

12.3 Total trade turnover in selected Asian economies,

1986–2000 187
12.4 Growth rates in selected Asian countries, 1986–2001 189
12.5 FDI inflows in selected Asian countries, 1986–2000 191
12.6 Per capita food production in Viet Nam, 1975–88 193
13.1 Savings ratios in selected Asian countries, 1986–2000 210

MAPS
2.1 Main regions of Viet Nam 12

BOXES
12.1 The seed sub-sector 197

SYMBOLS USED IN TABLES

n.a. not applicable
.. not available
- zero
. insignificant
 PREFACE ix

ABBREVIATIONS
ADB Asian Development Bank
AFTA ASEAN Free Trade Area
ASEAN Association of Southeast Asian Nations
CBR crude birth rate
CDF Comprehensive Development Framework
CIEM Central Institute of Economic Management
CIS Commonwealth of Independent States
CMEA Council for Mutual Economic Assistance
CPI Consumer Price Index
CPV Communist Party of Vietnam
CSCER Central Steering Commitee for Enterprise Reform
DAC development assistance community
EPZ export processing zone
ESAP Enhanced Structural Adjustment Program
EU European Union
FDI foreign direct investment
GDP gross domestic product
GNP gross national product
GSO General Statistical Office
HDI Human Development Index
HRD human resource development
IFPRI International Food Policy Research Institute
IMF International Monetary Fund
IRRI International Rice Research Institute
LSMS Living Standards Measurement Study
MARD Ministry of Agriculture and Rural Development
MFI multilateral financial institutions
MOFI Ministry of Finance
MOJ Ministry of Justice
MOLISA Ministry of Labour, Invalids and Social Affairs
MPI Ministry of Planning and Investment
NIC newly industrialised country
ODA official development assistance
OECD Organisation for Economic Cooperation and Development
x VIET NAM: A TRANSITION TIGER?

PIP Public Investment Program

PSA Provincial Seed Agency
SAC Structural Adjustment Credit
SBVN State Bank of Viet Nam
SGELI Steering Group for Enterprise Law Implementation
SOE state-owned enterprise
UK United Kingdom
UN United Nations
UNDP United Nations Development Programme
US United States
USSR Union of Soviet Socialist Republics
VAT value-added tax
VCCI Vietnam Chamber of Commerce and Industry
VLSS Vietnam Living Standards Survey
 PREFACE xi

PREFACE

This volume is a by-product of the work done by the two authors in Viet Nam
over the past 15 years. Over that period we have worked with many different
government agencies in Viet Nam and for a large number of donors. We have
had the opportunity to discuss developments in Viet Nam with many
knowledgeable observers—Vietnamese scholars and government officials,
domestic and foreign business people, foreign academics, NGO representatives,
the staff of donor agencies, diplomats and others. Given the help we have
received from so many, it is difficult and a little invidious to acknowledge only
a few. Nevertheless, there are a few people who have been particularly helpful
and particularly deserve our thanks.
Early in our work in Hanoi, we were both very lucky to work with Vu Tat
Boi, then with the office of the Council of Ministers, and the able team of
young Vietnamese he assembled to staff and advise the UN Management
Development Programme. Under that project, we both participated in a
program to select and train twenty-seven young Vietnamese for overseas
postgraduate training in subjects relevant to the economic reform process.
From those two groups of young people, we made many friends whom we
keep meeting in increasingly high-level positions in government, business,
academia and donor agencies.
Le Dang Doanh and his colleagues, national and international, at the Central
Institute of Economic Management also have provided us with valuable insights
and challenged our thinking and interpretations on numerous occasions. Pham
Chin Lan from the Vietnamese Chamber of Commerce and Industry was an
important source of ideas on business issues.
Many individuals from the offices of government; ministries of planning
and investment, finance, agriculture and rural development, and foreign affairs;
and provincial peoples’ committees have assisted us, both professionally and
at a personal level, making Viet Nam a stimulating and productive work
environment. In particular, we gained valuable insights working on projects
headed by former planning ministers, Do Quoc Sam and Tranh Xuan Gia.
xii VIET NAM: A TRANSITION TIGER?

We have also learnt much from discussions with the international community
during our work, sometimes learning most when we agreed least. The two
Adams—Adam Fforde and Adam McCarty—have been a continuing source of
stimulus. Among aid officials during the early 1990s, David Dollar of the
World Bank provided valuable insights to all those working on economic reform
in Viet Nam, while in more recent years, J.P. Verbiest, previously the Asian
Development Bank (ADB) resident representative, and Robert Glofcheski of
the UNDP office in Hanoi, have proved stimulating colleagues. Two successive
Swedish ambassadors, Borje Lljunggren and Gus Edgren, were also most helpful
in generating lively exchanges of ideas. A number of domestic and foreign
lawyers and business experts (too many to name) helped stimulate our thinking
about law and economic development.
We also thank the development agencies that have funded much of our
work in Viet Nam, including the Asian Development Bank, United Nations
Development Programme and World Bank, from the multilateral agencies,
and the Australian Agency for International Development (AusAID), GTZ,
SIDA, DANIDA, NORAD, and the Netherlands DGIS amongst the bilateral
agencies. If in the text we have occasionally bitten the hands that have fed us,
we have no doubt it will be taken in good spirit.
In preparing the text for publication we received help from Richard Jones in
Hanoi, who volunteered his time and energy to check the manuscript, and
Matthew May, of Asia Pacific Press, who has taken on the daunting tasking of
preparing the manuscript for publication. We also thank those readers who
took the time to provide valuable comments on earlier drafts of this manuscript.
Ray Mallon would particularly like to offer his personal thanks to To Hanh
Trinh and her family for their insights into Viet Nam. Brian Van Arkadie
would like to offer personal thanks also to Ray and his family, and to Goran
Andersson, of the Swedish Institute of Public Administration (SIPU), for offering
encouragement and hospitality.
Needless to say, as this volume offers personal judgments and interpretations
on a number of complex and sometimes contentious issues, none of those
thanked should be held responsible for any of the contents, although they
surely can claim credit if our efforts prove useful.

Brian Van Arkadie and Raymond Mallon

March 2003
 VIET NAM’S DEVELOPMENT EXPERIENCE 1

Viet Nam: a transition tiger

Viet Nam’s development experience

Abstract for chapter 1

The two themes of this book are introduced: the first, a comprehensive review
of developments in the Vietnamese economy and the evolution of economic
policy since the mid 1980s; the second – more ambitiously – an effort to
interpret and explain some key factors driving economic growth.
Essentially, this chapter describes what Viet Nam has achieved in terms of
socio-economic development – especially the level and distribution of economic
growth during the period of transition. Viet Nam’s performance is compared
and contrasted with two main benchmarks – East Asian economies during their
period of accelerated growth, and other reforming centrally planned economies.
The timing of the revival of Viet Nam’s economic fortunes coincided with the
introduction of Doi Moi, Viet Nam’s own version of ‘economic renewal’. The
reversal of the relative decline of Viet Nam is the main subject of this book.
The authors argue that some important building blocks of later success
were laid in the pre-Doi Moi period. However, the policy regime of Viet Nam
has been criticised in the following areas: reform of state enterprises, regulatory
environment for foreign investment, issues of public administration, governance
and corruption. Even so, the predicted dire consequences of failure to reform
more vigorously have not yet materialised.

Keywords:
Cambodia, China, Council for Mutual Economic Assistance (CMEA), Doi
Moi, East Asia, economic renewal, International Monetary Fund (IMF),
Marxist-Leninist state, per capita income, Washington consensus, World Bank

Published by ANU E Press, 2003

 VIET NAM’S DEVELOPMENT EXPERIENCE 1

1
VIET NAM’S DEVELOPMENT EXPERIENCE

Since the late 1980s Viet Nam has been remarkably successful in achieving
rapid economic growth and reducing poverty. While per capita income levels
are still far behind most other East Asian economies, economic growth rates
and rates of poverty reduction during the 1990s were amongst the highest in
the world.
In addressing that experience this book is intended to make two
contributions. First, a comprehensive review of developments in the economy
and the evolution of economic policy since the mid 1980s is presented. Second,
and more ambitiously, an effort has been made to interpret and explain some
key factors driving Vietnamese economic growth.
The latter task is not easy. Viet Nam is a large, diverse and populous country,
with a turbulent modern history. During the period covered, Viet Nam has
implemented its own version of economic reform (Doi Moi, or ‘economic
renewal’) which has been profound enough in its effects to justify identifying
Viet Nam as an economy ‘in transition’. It has, however, retained a stated
commitment to developing a Marxist-Leninist state and has been criticised by
many international commentators for the slow pace of reform of an apparently
cumbersome administrative and regulatory apparatus.
The high growth rates and reductions in poverty achieved by Viet Nam
during the 1990s took the international community by surprise.1 Throughout
the 1990s, many international advisors warned that Vietnamese development
targets were overambitious. During the last 15 years, Viet Nam was repeatedly
1
2 VIET NAM: A TRANSITION TIGER?

warned that it was at a critical turning point in the reform process, and that
concerted efforts were urgently needed to accelerate and ‘deepen’ its reforms to
avert economic stagnation. And yet the Vietnamese economy has performed
well, frequently exceeding ‘overambitious’ targets.2 In the face of many dire
warnings about the consequences of failure to implement all aspects of proposed
reform packages, Viet Nam continued with a selective (‘step-by-step’) approach
to reform, in some areas acting decisively, in others moving with a high degree
of caution.
During the period covered, the dominant paradigm informing international
policy advice was what has been called the ‘Washington consensus’, associated
with the Bretton Woods institutions—the World Bank and International
Monetary Fund (IMF). The central themes of the ‘consensus’ are an emphasis
on the virtues of greatly extending the play of free markets, reducing the
economic intervention of the state, and maintaining macroeconomic stability.
Many of the components of this consensus would be accepted by most
economists. Opinions vary, however, about the role of the state, the institutional
requirements to make markets work for the common good, and the interventions
required to ensure that the benefits of growth are equitably distributed.
While advocates of the Washington consensus are quite ready to claim that
the Vietnamese experience validates their paradigm, this volume argues that
Viet Nam’s quite remarkable development progress is not so readily subsumed
within the more orthodox versions of that framework. Basically, according to
the tenets of orthodoxy that call for minimum state intervention, the Vietnamese
economy should not have performed as well as it has, given continuing extensive
state intervention in economic activity.
In seeking to understand the factors that have contributed to Viet Nam’s
success, the intention is to contribute to a broader literature on the economic
performance of East Asia in recent decades which has explored the wide range
of institutional and policy experience of the region.3
There have always been voices in the mainstream economic literature which
have resisted the more simplistic versions of the ‘Washington consensus’.
Interestingly, in recent years some vocal criticisms have come from economists
associated with the World Bank.4
The diversity of views reflects the international reality that the development
profession and development institutions have still much to learn about economic
development processes. Douglass North asks
 VIET NAM’S DEVELOPMENT EXPERIENCE 3

How do we account for the persistence of poverty in the midst of plenty? If we know the sources
of plenty, why don’t poor countries simply adopt policies that make for plenty? The answer is
straightforward. We just don’t know how to get there. We must create incentives for people to
invest in more efficient technology, increase their skills, and organize efficient markets. Such
incentives are embodied in institutions. Thus we must understand the nature of institutions and
how they evolve (2000:n.p.)

Attempts to understand the Vietnamese reality should reduce the dangers

of offering irrelevant or counterproductive advice. Lessons also may be derived
from this experience that could be useful for other developing and transitional
economies. There should, however, be no expectation that a blueprint for reform
will be provided, to be applied mechanically elsewhere, as a recurring theme of
this study is that successful policy is built on pragmatic responses to specific
national circumstances.
While the focus is on more recent developments, the book includes a
description of the Vietnamese economic reform (Doi Moi) processes from its
antecedents in the early 1980s, through to 2001. The authors discuss both
the impact of policies on economic performance, and the impact of economic
experience on policy formulation.
This introductory chapter introduces some of the questions that motivate
this study.

DOI MOI IN AN INTERNATIONAL CONTEXT

The book aims to describe what Viet Nam has achieved in terms of
socioeconomic development, especially in terms of the level and distribution
of economic growth, during the period of transition. The main narrative depicts
events in Viet Nam, but some attempts are also made to compare and contrast
Viet Nam’s performance with two main benchmarks: East Asian economies
during their periods of accelerated growth; and other reforming centrally
planned economies.

Viet Nam as a developing East Asian economy: falling behind and

catching up
An obvious point of comparison is with the remarkable success the East Asian
economies have had during recent decades in greatly increasing per capita
incomes and reducing poverty. In the final four decades of the twentieth century,
Hong Kong, South Korea, Singapore and Taiwan were transformed from poor
underdeveloped economies to modern and relatively affluent economies through
4 VIET NAM: A TRANSITION TIGER?

growth rates that were among the highest recorded in the history of world
development. More recently, dramatic transformations have also been taking
place in Malaysia, Thailand and China. Figure 1.1 provides a historical
perspective of Viet Nam’s economic performance relative to selected Asian
economies.
Data from Maddison (2001) show that, at the end of the Second World
War, per capita income in Viet Nam was well above that of China, around 85
per cent that of South Korea, and 80 per cent that of Thailand and Indonesia,
but only 62 per cent that of the Philippines (see Figure 1.1). Military struggle
during most of the 1950s, 1960s and early 1970s, meant that the economy
stagnated and Viet Nam’s relative position deteriorated. Of the countries listed
in Table 1.1, since 1950 Viet Nam’s per capita income has only increased
relative to that of the Philippines.

Figure 1.1 Viet Nam’s per capita income as a proportion of selected

Asian economies’ per capita income, 1950–98 (per cent)

90

80

70

60

50
Per cent

40

30

20 Thailand
South Korea
Philippines
10
Malaysia
Indonesia
0
1950 1960 1970 1975 1980 1985 1990 1995 1998

Source: Maddison, A., 2001. The World Economy: a millennial perspective, Organisation for
Economic Cooperation and Development, Paris.
 VIET NAM’S DEVELOPMENT EXPERIENCE 5

The relative level of Viet Nam’s per capita income declined sharply compared
to the successful East Asian economies during the four decades 1950–90, but
there was a reversal in this decline in relative position in the final decade of the
century (Table 1.2).
The protracted military struggle was the primary cause of decline until the
mid 1970s. Military conflicts in Cambodia and with China, and a dysfunctional
economic policy regime compounded the decline during the later 1970s and
early 1980s. The subsequent reversal of the relative decline is the main theme
of this volume.
The timing of the revival in Viet Nam’s economic fortunes coincided with
the introduction of Doi Moi. The central importance of Doi Moi is accepted by
all commentators on the Vietnamese economy.5 However, although the shift
a
Table 1.1 Per capita incomes in selected Asian countries, 1950–98
1950 1960 1970 1975 1980 1985 1990 1995 1998
Viet Nam 658 799 735 710 758 929 1,040 1,403 1,677
Thailand 817 1,078 1,694 1,959 2,554 3,054 4,645 6,620 6,205
South Korea 770 1,105 1,954 3,162 4,114 5,670 8,704 11,873 12,152
Philippines 1,070 1,475 1,761 2,028 2,369 1,964 2,199 2,185 2,268
Malaysia 1,559 1,530 2,079 2,648 3,657 4,157 5,131 6,943 7,100
Indonesia 840 1,019 1,194 1,505 1,870 1,972 2,516 3,329 3,070
China 439 673 783 874 1,067 1,522 1,858 2,653 3,177
Note: a 1990 international Geary–Khamis dollars
Source: Maddison, A., 2001. The World Economy: a millennial perspective, Organisation for
Economic Cooperation and Development, Paris.
a
Table 1.2 Per capita income in Viet Nam, 1950–98
(per cent of incomes in selected Asian countries)
1950 1960 1970 1975 1980 1985 1990 1995 1998
Thailand 80.5 74.1 43.4 36.2 29.7 30.4 22.4 21.2 27.0
South Korea 85.5 72.3 37.6 22.5 18.4 16.4 11.9 11.8 13.8
Philippines 61.5 54.2 41.7 35.0 32.0 47.3 47.3 64.2 73.9
Malaysia 42.2 52.2 35.4 26.8 20.7 22.3 20.3 20.2 23.6
Indonesia 78.3 78.4 61.6 47.2 40.5 47.1 41.3 42.1 54.6
China 149.9 118.7 93.9 81.2 71.0 61.0 56.0 52.9 52.8
Note: a 1990 international Geary–Khamis dollars.
Source: Derived from Maddison, A., 2001. The World Economy: a millennial perspective,
Organisation for Economic Cooperation and Development, Paris.
6 VIET NAM: A TRANSITION TIGER?

in the policy regime explains the timing of the economic revival, it does not
explain the sustained strength of the subsequent growth performance.
How was it possible for Viet Nam to shift swiftly from being an inward-
looking stagnant economy to such a successful process of assimilation? The
answer to this question is partly a matter of policy reform, but also reflects
underlying institutional and human resource capabilities.

Viet Nam as a reforming centrally planned economy: a transition success

Comparisons with other transition economies are much more flattering for
Viet Nam. Viet Nam has outperformed other transition economies, except for
China (Figure 1.2). Moreover, it has done this while maintaining
macroeconomic and social stability, and while continuing to improve key human
development indicators such as life expectancy and educational and health
data. While Viet Nam halved its incidence of poverty, the incidence of poverty
in the Commonwealth of Independent States (CIS) increased from 1 in 25
persons to 1 in 5 persons in the decade to 1998 (World Bank 2002:xiii). For
most CIS countries, the economic decline in the early stages of reform was far
worse than the impact of the Great Depression on developed countries in the
1930s (see World Bank 2002:5).
Substantial changes in the economic system were implemented in Viet Nam
at the end of the 1980s without a decline in economic activity. The economy
grew despite the sudden collapse of Soviet aid and trade, a continuing US-led
boycott that blocked the provision of financial assistance from the multilateral
financial institutions. In contrast, deep economic contractions and social
dislocation generally accompanied reform in the European centrally planned
economies.
Why did Viet Nam perform so much better than other Council for Mutual
Economic Assistance (CMEA) economies?6 A theme developed in this study is
that the nature of the system subject to reform was in certain critical respects
different from other centrally planned CMEA economies.
Understanding the characteristics of the system subject to reform is critically
important to any interpretation of an economic reform process. In the
Vietnamese case this is not easy, as the working of the pre-reform system was
somewhat obscure.
A key argument of the study is that, despite the adoption of the vocabulary
of central planning, the Vietnamese economy was never effectively subjected
 VIET NAM’S DEVELOPMENT EXPERIENCE 7

Figure 1.2 GDP growth in selected transition economies, 1980–2000

(per cent per annum)

20
15
Growth (per cent per annum)

10

5
0
-5 China
Hungary
-10 Poland
-15 Russia
Ukraine
-20 Viet Nam
-25
1980 1985 1990 1995 2000
Year
Source: Data from World Bank, 2002. World Development Indicators, World Bank, Washington,
DC.

to the same level of centralised control as in the former USSR and Eastern
European centrally planned economies. Indeed, it could be argued that success
during the prolonged military conflicts was largely built around effective
decentralisation of day-to-day management decisions and encouraging local
initiatives.
Other important features were the relative importance of the rural sector,
the dominant role of household units in agriculture production, and the limited
development of heavy industry at the beginning of the reform process. The
economy was technically less advanced than Eastern Europe and the CIS
economies, but demonstrated greater resilience in the face of change and
dislocation in the macroeconomy. Soviet-style industrialisation had been
limited, so there was not the same inheritance of large scale, inflexible industrial
dinosaurs, which has posed such difficult challenges to reform in the former
Soviet Union.
The degree of institutional stability maintained during the transition process
was also crucially important. Instead of the ‘root and branch’ destruction of
8 VIET NAM: A TRANSITION TIGER?

old institutions as a prelude to the installation of new mechanisms, many

reforms were directed at making existing institutions work better, while
gradually introducing new market institutions. The step-by-step approach to
reform was based on continuity in the political system, which operates through
building and maintaining consensus on economic and institutional reforms.
Of course, Viet Nam also had one fortuitous advantage: its geographical
location. Adjacent to the region which was in the midst of a sustained boom
(until the crisis of 1997), there was a spill-over of capital and entrepreneurial
energy from dynamic neighbours. This was aided by growing political stability
in Cambodia, and improving relations between China and Viet Nam.
Demographic transition also contributed positively to growth in this period.

LEARNING FROM THE VIETNAMESE EXPERIENCE

In surveying the Vietnamese experience of successful economic growth, it is
not easy to separate the influence of exogenous factors from the impact of
policy. Powerful exogenous factors that supported the expansion of the
Vietnamese economy have included Viet Nam’s regional location and the
trajectory of the regional economy, the timing of natural resource (oil)
exploitation, the entrepreneurial vitality of the Vietnamese, access to a sizeable
and dynamic emigrant community, and the onset of peace. Yet the acceleration
of growth also began with strongly negative exogenous factors, such as the
economic consequences of the demise of the Soviet Union and the CMEA and
the effects of the US embargo.
Part of the problem is sorting out the impact of the systemic reforms
introduced under the aegis of Doi Moi from such exogenous effects. The balance
of the argument will be that the Doi Moi reforms were a necessary, but not
sufficient, ingredient in the Vietnamese success story (that is, that the degree
of success may not be readily replicable in different environments). Nevertheless,
it can be reasonably argued that certain lessons can be drawn about effective
policymaking.
Another set of difficulties relates to the interpretation of the timing and
sequencing of policy impacts. The introduction of the Doi Moi reforms began
in the second half of the 1980s, and the acceleration in growth began in the
early 1990s, suggesting a strong causal relationship. However, that leaves open
the issue of how far the foundations of Viet Nam’s performance in the 1990s
were laid in the pre-reform period. Should aspects of policy in the pre-Doi Moi
 VIET NAM’S DEVELOPMENT EXPERIENCE 9

be interpreted as important inputs into the later successes, or should that

period be seen simply as an era of mistaken policy, which failed to realise
inherent potential and held back the achievement of growth? This account
argues that, despite many mistakes, some important building blocks of later
success were laid in the pre-Doi Moi period.
A further area for speculation relates to policies that have not been
implemented. In donor tutorials, euphemistically entitled ‘policy dialogue’,
there have been areas of persistent nagging, where donors have felt that the
Vietnamese policy regime has had failings. The most persistent areas of criticism
have related to the reform of state enterprises and the regulatory environment
for foreign investment. More recently, issues of public administration,
governance and corruption have received increased emphasis.
By and large, the record suggests that the often predicted dire consequences
of failure to reform more vigorously in such directions have not yet materialised.
Does this imply that donor advice has been misplaced, or that even greater
achievements would have resulted from more receptivity to donor tutorials, or
even that the negative consequences have been merely postponed? These
questions are considered in this book, although it is difficult to provide definitive
answers.

NOTES
1
A joint United Nations–Government of Viet Nam study of the economy, produced in
1989 by a team under the leadership of one author of this volume was quite optimistic
about the prospects for growth. The same was true for an Asian Development Bank (ADB)
report which the other author helped draft the same year. A 1990 World Bank economic
report concluded that ‘[i]f Viet Nam follows through on its reform program, its medium-
term prospects are excellent’. However, none of these reports included quantitative
projections and, if the attempt had been made, projected growth would undoubtedly
have been more modest than the actual achievement.
2
Dollar (2001:1) notes that ‘Viet Nam has been one of the fastest growing economies in the
world in the 1990s, and yet by many conventional measures it has poor economic policies’.
3
The literature on this is extensive. Examples include Amsden (1989), Ha-Joon Chang
(1999), Jomo K.S. (1997), Krugman (1994), Wade (1990) and World Bank (1993a).
4
The most distinguished of these critical voices has been that of Joseph Stiglitz, Nobel Laureate
and former Vice President of the World Bank. Another ex-World Bank economist, William
Easterly, has also mounted a strong challenge to World Bank orthodoxies. And, in fairness
10 VIET NAM: A TRANSITION TIGER?

to the World Bank, its own research programs frequently offer a nuanced view of the range
of appropriate policies, as in Nelson and Pack (1999).
5
But some have argued that it has not been positive. Kolko (1997) argues that market
reforms have resulted in peasants losing their land, the emergence of a class society through
increasing inequality, and the fact that Vietnamese ‘industrial workers are amongst the
most exploited in the world’. He argues that Communist efforts to merge a socialist world
with a market strategy have resulted in the worst of both worlds.
6
CMEA was the Council for Mutual Economic Assistance, which included the former USSR,
the Eastern European centrally planned countries and Viet Nam, but not China.
 VIET NAM’S DEVELOPMENT EXPERIENCE 1

Viet Nam: a transition tiger

Geography, resources and population

Abstract for chapter 2

Viet Nam is the twelfth most populous country in the world, but only 58th in
terms of land area – a little smaller than Germany. This chapter outlines the
geography of the region, looks at the population and demographic transition,
gives an overview of the regions, and outlines the regional distribution of
economic activity.
The discussion on geography and the natural resource base focuses on
agriculture, forestry and fishing resources and the environment, as well as the
issues of energy, minerals and water. The population and demographic transition
points to the fact that life expectancy has continued to increase during Doi
Moi while the declining population growth is reducing the burden on the
state. In terms of regional productivity, with 42 per cent of the population
concentrated in the two deltas, foreign investment is based in the Southeast
region and the Red River Delta.

Keywords:
Agriculture, Central Coast region, Central Highlands, Climate, Da Nang,
demographic transition, Dong Nai, Fishing, Hai Phong, Hanoi, Ho Chi Minh
City, Mekong River Delta, natural resources, North Central region, Northeast
region, Northwest region, Red River Delta, shipping routes, smuggling,
Southeast region, tourism

Published by ANU E Press, 2003

 GEOGRAPHY, RESOURCES AND POPULATION 11

2
GEOGRAPHY, RESOURCES AND
POPULATION

Viet Nam is the twelfth most populous country in the world, but only fifty-
eighth largest in terms of land area (Communist Party of Vietnam 2001b). In
terms of land area and population it is a little smaller than Germany. The
population density is high and cultivatable land per person is very low. The
population is heavily concentrated in the Red River and Mekong River Deltas.
There is a long, narrow coastal strip linking the deltas. The two substantial
highland areas (the Northern and Central Highlands) are more sparsely
populated that the deltas. Viet Nam’s population is better educated and has a
higher life expectancy than that of most countries with similar average per
capita incomes.

GEOGRAPHY AND THE NATURAL RESOURCE BASE

Viet Nam extends 1,650 kilometres from north to south. At its widest point
the country stretches 600 kilometres from west to east, and at its narrowest
point, only 50 kilometres. Viet Nam is located close to major shipping routes,
and relatively prosperous and rapidly expanding East Asian economies. It has
a very long coast line (about 3,000 kilometres) providing opportunities for
fishing and tourism (and smuggling), and also ensuring that most areas of the
country are not far from access to transport to foreign markets. While natural
resources have played an important role in recent economic development, the
country is not particularly well endowed with agricultural, forest, energy, or
mineral resources.
11
12 VIET NAM: A TRANSITION TIGER?

Map 2.1 Main regions of Viet Nam

Northeast

Northwest

Red River Delta

North Central

Central Coast
Central Highlands

Southeast

Mekong River Delta

Source: Adapted from World Bank, n.d. Map of Vietnam, World Bank, Hanoi. Available online
at http://www.worldbank.org.vn/wbivn/map/map001.htm.
 GEOGRAPHY, RESOURCES AND POPULATION 13

The country’s location and length results in great variations in climate,

ranging from tropical to temperate, and allows for a diversity of flora and
fauna. The southern and central areas are tropical and humid. The northern
areas are also humid, but temperatures are much more variable with average
temperatures ranging from around 30 degrees in July to 16–18 degrees in
January. Average temperatures in the south range from 26 to 28 degrees
throughout the year. Typhoons are experienced in most parts of the country,
but are most severe in the central provinces. Rainfall variability is very high in
the North and Central provinces, contributing to variability in agricultural
output and incomes. Rainfall is more reliable in the southern areas, but all
parts of the country suffer from frequent natural calamities.
Viet Nam has rich biological diversity in its forests, rivers and oceans. A
great variety of crops, cultivars and domesticated animals are used in its
agricultural systems. Some 275 different animal, 826 bird, and 180 reptile
species are found in Viet Nam. Wild animals include elephants, dapple deer,
leopards, tigers, bears, wild buffalo, samba deer, mountain goats, monkeys,
goats, bobcats, foxes and squirrels. Three out of the seven new species of wild
animals identified during the twentieth century were found in Viet Nam’s
forests. More than 1,000 medicinal plant species have already been identified.
An indication of the richness of Viet Nam’s biodiversity is shown in Table 2.1.
On the other hand, habitat loss and hunting have resulted in 16 different
primate species, 4 large mammals, and 25 bird species being threatened (World
Bank 2000:105). Five large water bird species have become extinct in the

Table 2.1 Biodiversity in Viet Nam

Number of species Number of species SV/SW
in Viet Nam (SV) in the world (SW) (per cent)
Mammals 275 4,000 6.8
Birds 800 9,040 8.8
Reptiles 180 6,300 2.9
Amphibians 80 4,148 2.0
Fish 2,470 19,000 13.0
Plants 7,000a 220,000 3.2
Note: a It has been estimated that another 5,000 species have still not been formally identified.
Source: Biodiversity Information Management System On-Line, http://www.geoanalytics.com/
bims/vm.htm.
14 VIET NAM: A TRANSITION TIGER?

Mekong Delta in the last 30 years. Wetlands in the two main deltas are under
threat because of high population pressures, and increased economic incentives
to exploit these areas.

Agriculture, forestry and fishery resources and the environment

The long north–south axis, and mix of coastal and upland areas, provides
scope for Viet Nam to grow a wide variety of tropical and temperate crops and
forests. The relatively small ratio of cultivatable land per person greatly influences
agricultural technology and the rural economy. The high variability in rainfall
and frequent typhoons are important influences on rural social and economic
systems. Poorly developed physical infrastructure constrains market access in
many locations, especially in the mountainous areas.
The most productive agricultural land is found in the Mekong and Red
River deltas, the two most densely populated rural areas. Cropped land per
capita is low by international and regional standards—0.09 hectares per person,
compared with 0.16 in India and 0.30 in Thailand—but is comparable with
Sri Lanka (0.10 hectares) and Bangladesh (0.07 hectares).
The Mekong River Delta accounted for 38 per cent of total value added in
the agricultural sector in 1999 (with 12 per cent of the land area), while the
Red River Delta accounted for 19 per cent (with only 4.5 per cent of the total
land area) (General Statistics Office 2000b). Most of the population (especially
the Kinh majority) is concentrated in the two main deltas and a narrow section
of the east and southeast coast. Only a small portion of the highland areas
bordering Laos and China are suitable for cropping, and population densities

Table 2.2 Key rural indicators in selected Asian economies

Country Rural population Agricultural output Arable land
(% of total in 2000) (% of GDP in 2000) (ha/capita in 1999)
Viet Nam 80.3 24.6 .09
Bangladesh 78.8 24.3 .07
China 65.7 15.9 .11
India 71.6 25.3 .16
Indonesia 58.8 16.9 .15
Malaysia 42.7 8.6 .35
Philippines 41.4 15.9 .13
Sri Lanka 76.4 19.4 .10
Thailand 78.4 9.1 .30
Source: Asian Development Bank, 2001. Key Indicators 2001, Asian Development Bank, Manila.
 GEOGRAPHY, RESOURCES AND POPULATION 15

in these areas are low, with higher proportions of ethnic minority groups.
Despite the low ratio of cultivable agriculture land, Viet Nam has emerged as
a leading agricultural exporter, and has also substantially diversified agriculture
exports in recent years.
Viet Nam’s forests are concentrated in the upland regions, with about 40 per
cent found in the central highlands. Forests are an important economic resource,
providing firewood, protein, income and materials for shelter. Until recently,
most of the population in mountainous areas lived near forests and earned part
of their livelihood through the harvest and sale of bamboo, firewood, medicine,
fruit, fodder and game from forests. Some 2,300 forest plant species are harvested
for food, medicine, construction, textiles and water proofing (World Bank 2000).
Forest resources are, however, being depleted. Population growth and
economic development are increasing pressures to clear forests and to expand
agriculture into highland areas and other environmentally fragile areas. Between
1943 and 1997, five million hectares of Vietnamese forests were converted to
other uses. Forest cover fell from 43 per cent of the country’s total land area in
1945, to just 28 per cent by 1997. Large areas were destroyed during the war
with the United States as a result of bombing and deliberate attempts to reduce
forest cover by spraying chemical poisons.
Underlying causes of continuing deforestation include poorly controlled
logging, rural poverty resulting in burning of forests for farming and foraging
for food for fuel, and inappropriate land tenure arrangements. While the
government has adopted programs to reduce poverty, better manage forests,
and reforest barren hill lands in an attempt to reverse the decline in forest
cover, the pursuit of other objectives (for example, promoting accelerated growth
of industrial crops for export) has placed increasing pressures on the natural
environment.
Inland fishing and marine products are important sources of protein and
income for many communities. Almost three million people are directly
employed in the sector; nearly 10 per cent of the population derives their
main income from fisheries, and fish consumption provides about half of
national protein consumption. Exports of aquatic products have been important
contributors to rapid export growth. The total area of natural inland water
bodies (lakes and rivers) is estimated to be about 4,200 km2, and there are
additional ponds and seasonal flooded areas of 6,000 km2. In addition, a number
of reservoirs are used for fishing. Concerns are growing, however, about over-
16 VIET NAM: A TRANSITION TIGER?

fishing, unsustainable fishing practices, the impacts of industrial pollution,

and the sustainability of shrimp farming in former mangrove swamps. With
rising demand for water, deforestation and weaknesses in watershed
management, and poor irrigation and drainage infrastructure, there are concerns
that water quality is deteriorating in many areas.

Energy, minerals and water

Another important contributor to rapid export growth during the late 1980s
and 1990s was the development of the country’s oil resources. New oil and gas
resources continue to be found and developed (mostly offshore from Vung Tau
in the south), and will be significant contributors to economic growth and
budget revenue for at least the medium term. While many areas are still to be
explored, most experts estimate that reserves are substantially less than oil rich
Southeast Asian nations such as Brunei, Indonesia and Malaysia on a per capita
basis. Coal and hydropower development (especially in the north) has also
contributed significantly to economic growth.
While the country is known to possess a wide range of other minerals,
commercial exploration is hampered by uncertainty about property rights. Lead,
zinc, antimony, pyrite, manganese, limestone, marble, salt and precious stones
are also currently being exploited. Studies suggest commercial potential to develop
bauxite, phosphates (mostly from apatite), lead, gold, tin, graphite, iron ore,
manganese, chrome and asbestos.
Viet Nam is endowed with river systems that have potential for hydro-power
development, estimated at about 18,000 megawatts. Some 3,700 megawatts’
capacity has already been developed.

POPULATION AND DEMOGRAPHIC TRANSITION

The population of Viet Nam was estimated at 78.7 million in 2001 (General
Statistics Office 2000a). The crude birth rate fell from 45 per thousand (1955–
59), to 38 (1970–74), to 31 (1985–89), and then to 19.9 per thousand in
the 1999 Census (General Statistics Office 2000a). Declining fertility reflects
widespread adoption of family planning practices. The government has
maintained a population policy that discouraging families of more than two
children, but without draconian controls. The decline in the birth rate must
also have been associated with success of health policies that increased life
expectancy at birth, and with the achievement of high educational enrolments.
 GEOGRAPHY, RESOURCES AND POPULATION 17

While distinct regional differences in fertility persist, with much higher

rates in the highland areas than in the delta and urban areas, a substantial
decline in fertility is recorded for all regions.1 The estimated rate of population
growth fell from 2.1 per cent per annum during 1979–89 to about 1.7 per
cent per annum from 1989 to 1999. The population growth rate has continued
to fall, and the General Statistics Office (2000a) now estimates the rate at
1.35 per cent in 2001, with a fertility rate of 2.3 children per woman. Life
expectancy has continued to increase during Doi Moi from an already relatively
high 67 years in 1992 to an estimated 68.6 years in 1999.
Thus, Viet Nam has experienced a rapid demographic transition (McNicholl
2002). Relatively low mortality rates and declining fertility rates have resulted
in a clear transition in the population’s age profile. At the time of the 1989
Census the profile was a pyramid, with each five year cohort larger than the
next older group.2 By 1999, this profile had changed in a crucial fashion, with
a 5–9 year old cohort smaller than the 10–14 group, and the 0–4 cohort
showing an even sharper drop in size. Viet Nam is now experiencing a
‘demographic bonus’,3 in which a declining population growth rate is reducing
the burdens on the education system, increasing the proportion of income
earners and making it easier to achieve increases in per capita income, which in
turn is associated with a further decline in birth rates.
The country is predominantly rural. Only 19.5 per cent of the population
resided in urban areas in 1990.4 At that time, Viet Nam’s economic structure
was characteristic of a low-income developing economy. In terms of the sources
of livelihood for the population, the country was (and is) still predominantly
agricultural. Of the total estimated active labour force in 1992 of 31.8 million,
23.0 million (72 per cent) were engaged in agriculture and little more than
one-tenth in industry. In 1990, agriculture and fisheries still accounted for
two-fifths (39 per cent) of GDP. Some 80 per cent of the population still live
in rural areas.5

OVERVIEW OF THE REGIONS

The Red River Delta, with a population of 17.2 million in 2001, is the most
densely populated region. It includes the national capital Hanoi and the port
city of Hai Phong (the second and third largest cities in Viet Nam). The
combined population of Hanoi and Hai Phong is less than half that of Ho Chi
Minh City.6 More than one in five Vietnamese live in the Red River Delta.
18 VIET NAM: A TRANSITION TIGER?

Figure 2.1 Viet Nam population pyramid, 1989 and 1999

Age group
80+
1989
80–84
75–79
70–74
65–69
Males Females
60–64
55–59
50–54
45–49
40–44
35–49
30–34
25–29
20–24
15–19
10–14
5–9
0–4

4800 3200 1600 0 1600 3200 4800

Age group
80+ 1999
80–84
75–79
70–74
65–69
60–64
55–59 Males Females

50–54
45–49
40–44
35–49
30–34
25–29
20–24
15–19
10–14
5–9
0–4

4800 3200 1600 0 1600 3200 4800

Source: General Statistics Office, 2000. Statistical Yearbook 2001, General Statistics Office, Hanoi.
 GEOGRAPHY, RESOURCES AND POPULATION 19

Figure 2.2 Age dependency ratio in selected Asian countries,

1986–2000

0.9 Viet Nam

China
Indonesia
0.8 Korea, Rep.
Malaysia
Singapore
Thailand
0.7

0.6

0.5

0.4

0.3
1986 1988 1990 1992 1994 1996 1998 2000

Note: The age dependency ratio is the ratio of dependants (people younger than 15 and older
than 65) to the working-age population (those aged 15–64).
Source: World Bank, 2002. World Development Indicators, World Bank, Washington, DC.

Table 2.3 Population distribution by region, 1995–2001

(per cent of total)
1995 1997 1998 1999 2000 2001
Red River Delta 22.4 22.2 22.1 22.0 21.9 21.9
Northeast 11.7 11.6 11.6 11.6 11.5 11.5
Northwest 2.9 2.9 2.9 2.9 2.9 2.9
North Central Coast 13.3 13.2 13.2 13.1 13.0 12.9
South Central Coast 8.6 8.6 8.6 8.5 8.5 8.5
Central Highlands 4.7 5.0 5.2 5.3 5.5 5.5
Southeast 14.9 15.1 15.2 15.4 15.5 15.7
Mekong River Delta 21.6 21.3 21.2 21.1 21.1 21.0
Source: General Statistics Office, 2001. Statistical Year Book 2001, General Statistics Office,
Hanoi.
20 VIET NAM: A TRANSITION TIGER?

With particularly high population densities and productive land, yields per
hectare are higher here than anywhere else in the country. This region is one of
the three focal economic zones identified as areas for concentrated development.
Hanoi, by virtue of its status as capital, attracts public and service sector
investment, but is also becoming an important industrial centre. The Hanoi/
Hai Phong industrial region is second most important location for foreign
invested projects after the Ho Chi Minh City/Dong Nai area.
The Northeast and Northwest regions (the Northern Uplands) have a
population of 11.3 million. It is one of the regions of concentrated poverty,
where weak infrastructure and limited agricultural land limit development
prospects. It has experienced a low rate of agricultural growth and lower than
average overall growth. Areas near Hanoi could, however, benefit from Hanoi’s
growth, particularly if investments are made to ensure good access. The area
could also benefit from increased tourism and economic links with Yunnan
province in China.
Another problematic region is North Central Coast. This region includes
some of the more inhospitable areas of Viet Nam, with frequent typhoons and
infertile land. As a result, the incidence of poverty is high. The region is
politically important as the link between the two more developed parts of
Viet Nam and has had an historical importance as the home area of key figures
in Viet Nam’s independence movement. The region has a population of about
10.2 million people. Like the Northern Uplands, it is a region of concentrated
poverty and has experienced the lowest growth rate of all the regions in the Doi
Moi period.
Further down the coast, the South Central Coast region (6.7 million people)
has higher income levels than its northern neighbour and a growth rate of
GDP and proportion of GDP generated from industry close to the national
average. This region includes Da Nang, the fourth largest city and third port
of Viet Nam, and a centre of one of the three focal economic zones. This area
has so far been the weakest of the three focal economic zones as a magnet for
foreign investment.
Inland from the South Central Coast region, where the land mass of
Viet Nam widens, are the Central Highlands. This is the least densely populated
of Viet Nam’s regions; with the second largest land mass of all the regions
(5,612 thousand hectares), it has only 4.3 million people (2001). While it
contains large mountain and forest areas which are either of low potential for
 GEOGRAPHY, RESOURCES AND POPULATION 21

agricultural development or deserve protection on environmental grounds, and

remote areas whose location and poor access has been a barrier to development,
there are also considerable areas of high-potential underdeveloped land
adaptable, for example, to high value tree crop development. As a result, it has
attracted a high rate of migration and has been the centre of the dynamic
growth of coffee production. This region has experienced the highest rate of
rural growth and is an important host to rural–rural migrants. In 1989–99
the population of the Central Highlands grew at 4.87 per cent per annum,
compared with the national average of 1.70 per cent. The share of the Central
Highlands in agricultural value-added has increased sharply and, despite the
net migration to this area, agricultural value-added per person in this region
has also increased much faster than in the rest of the country.
The southern part of the country includes the Mekong River Delta region
and the Southeast region. The Mekong River Delta is the second most populous
of the regions, with over 16 million people, although it is less densely populated
than the Red River Delta. It has an unrealised potential for agricultural growth
both at the intensive margin (increasing productivity per hectare) and at the
extensive margin (bringing more land into irrigated cultivation). It is in the
Mekong that further expansion in staple food production can be most readily
achieved,7 and this could be associated with movement of labour into the
region. Social and economic infrastructure is not as developed as in the Red
River Delta, suggesting the need for substantial investment in rural
infrastructure to take advantage of the region’s potential. There is also a need
to invest in road improvements to link rural areas with regional growth centres
(notably the town of Can Tho) and with Ho Chi Minh City.
With a population almost as large as the Red River Delta, but a larger land
area, the Mekong Delta is the main producer of a marketable food surplus for
domestic consumption and export. The Red River Delta also produces a modest
surplus. The rest of the country produces close to or below food self-sufficiency.
Maize and cassava are the two main food staples after rice and are also mainly
grown in the deltas.
The Southeast region includes Ho Chi Minh City and Dong Nai, the most
dynamic centres of commercial and industrial development in Viet Nam, and
the most attractive to foreign investors. Ho Chi Minh City, with about 5.4
million people (in 2001), is almost twice as populous as Hanoi. In designating
the area as a focal economic zone, government is doing no more than recognising
22 VIET NAM: A TRANSITION TIGER?

Table 2.4 Gross regional product per capita by major region,

1995–2000 (ratio of national average)
1995 1996 1997 1998 1999 2000
Red River Delta 97 97 98 98 98 99
Northeast 55 54 55 55 55 57
Northwest 40 39 39 42 41 40
North Central Coast 58 56 57 56 55 55
South Central Coast 73 73 73 73 73 73
Central Highlands 61 59 57 58 58 57
Southeast 233 236 234 234 232 228
Mekong River Delta 84 83 83 82 83 83
Source: General Statistics Office, 2002. Viet Nam Economy in the Years of Reform, Statistical
Publishing House, Hanoi.

Table 2.5 Share of GDP by region, 1995–2000 (per cent of total)

1995 1996 1997 1998 1999 2000
Red River Delta 19.53 19.14 18.86 19.30 18.86 18.59
Northeast 8.09 7.95 7.88 7.91 7.75 7.78
Northwest 1.30 1.26 1.27 1.24 1.15 1.15
North Central Coast 8.02 7.69 7.53 7.38 7.16 7.04
South Central Coast 6.27 6.24 6.31 6.43 6.25 6.25
Central Highlands 2.26 2.30 2.18 2.44 2.43 1.98
Southeast 36.44 37.11 37.76 36.96 38.67 39.99
Mekong River Delta 18.08 18.30 18.21 18.33 17.73 17.22
Source: General Statistics Office, 2002. Viet Nam’s Economy in the Years of Reform, Statistical
Publishing House, Hanoi.

the reality of the strong growth of Ho Chi Minh City, which is spilling over
into neighbouring areas. Although already a large city, Ho Chi Minh City still
falls short of being an East Asian mega-city,8 but it is likely to become so
within the next twenty years, with all the attendant problems and investment
requirements that implies.

REGIONAL DISTRIBUTION OF ECONOMIC ACTIVITY

Some 42 per cent of the population are concentrated in the two deltas. The
two main deltas account for more that 55 per cent of agricultural output. The
Southeast (including Ho Chi Minh City and Dong Nai) and the Red River
Delta dominate industrial output (60 per cent of total industrial output). By
 GEOGRAPHY, RESOURCES AND POPULATION 23

Table 2.6 Agriculture value-added by region, 1995–2000

1995 1997 1998 1999 2000
Percentage of total
Red River Delta 20.1 19.6 19.6 19.0 18.6
Northeast 8.0 7.9 7.8 7.7 7.7
Northwest 1.9 1.9 1.8 1.9 1.9
North Central Coast 9.0 9.1 8.6 8.6 8.7
South Central Coast 6.1 5.9 5.9 5.7 5.5
Central Highlands 5.9 7.4 7.3 8.6 10.2
Southeast 11.1 11.3 10.8 11.1 11.2
Mekong River Delta 38.0 37.0 38.3 37.4 36.2

‘000 dong/person (constant 1994 prices)

Red River Delta 1,027 1,096 1,162 1,200 1,226
Northeast 780 847 884 920 961
Northwest 759 801 796 881 914
North Central Coast 772 855 857 916 967
South Central Coast 806 854 908 934 929
Central Highlands 1,425 1,818 1,840 2,240 2,702
Southeast 855 935 930 999 1,039
Mekong River Delta 2,012 2,161 2,369 2,457 2,485
Whole country 1,143 1,245 1,313 1,389 1,444
Source: General Statistics Office, 2000. Statistical Year Book 2000, General Statistics Office,
Hanoi; General Statistics Office, 2001. Statistical Year Book 2001, General Statistics Office,
Hanoi.

far the highest per capita incomes are in the Southeast, more than twice the
national average. Per capita incomes in the Red River Delta are the same as the
national average, but incomes in the Mekong Delta are about 83 per cent of
the national average. The poorest area is the Northwest (about 40 per cent of
the national average).
While the two deltas dominate agricultural output, the share of the deltas
in total agricultural output has recently declined. This reflects the more rapid
industrialisation and urbanisation of these areas, and the rapid development
of industrial crops in upland areas, especially in the Central Highlands. The
Central Highlands share of agricultural value-added increased from 5.9 to 10.2
per cent between 1995 and 2000 due to a rapid expansion in the output of
coffee and other industrial crops. The Central Highlands region has the highest
per capita value-added in agricultural output in Viet Nam followed by the
Mekong River Delta.
24 VIET NAM: A TRANSITION TIGER?

Table 2.7 Industrial value-added by domestic enterprises by region,

1995–2001 (per cent of total)
1995 1997 1998 1999 2000 2001
Red River Delta 19.8 19.6 19.7 20.0 20.0 20.3
Northeast 7.4 7.6 7.3 7.0 7.0 7.1
Northwest 0.4 0.4 0.5 0.4 0.4 0.4
North Central Coast 4.6 4.3 4.3 4.3 4.5 4.2
South Central Coast 5.9 6.2 6.3 6.5 6.7 6.7
Central Highlands 1.5 1.4 1.4 1.4 1.4 1.3
Southeast 38.9 38.9 38.7 39.0 39.3 39.5
Mekong River Delta 14.6 14.0 13.8 13.5 13.0 12.9
Not allocated to a province 6.9 7.6 8.0 7.9 7.8 7.7
Sources: General Statistics Office, 2000. Statistical Year Book 2000, General Statistics Office, Hanoi;
General Statistics Office, 2001. Statistical Year Book 2001, General Statistics Office, Hanoi.

Table 2.8 Total industrial value-added by region, 1995–2000

1995 1997 1998 1999 2000 2001
Percentage of total
Red River Delta 17.7 18.4 19.1 19.6 20.4 20.2
Northeast 6.0 5.8 5.6 5.4 5.4 5.4
Northwest 0.3 0.3 0.3 0.3 0.3 0.3
North Central Coast 3.6 3.3 3.2 3.1 3.6 3.8
South Central Coast 4.8 4.8 4.8 4.8 4.9 5.0
Central Highlands 1.2 1.1 1.0 1.0 1.0 0.9
Southeast 49.4 50.3 50.5 50.9 50.2 50.0
Mekong River Delta 11.8 10.6 10.2 9.7 9.3 9.5
Not allocated to a province 5.2 5.4 5.4 5.2 5.0 5.0

‘000/person (constant 1994 prices)

Red River Delta 1,134 1,495 1,725 1,960 2,369 2,650
Northeast 736 906 963 1,027 1,192 1,357
Northwest 155 184 224 223 237 249
North Central Coast 387 449 489 526 709 837
South Central Coast 801 1,018 1,114 1,237 1,476 1,688
Central Highlands 362 390 390 409 452 458
Southeast 4,777 6,031 6,650 7,292 8,252 9,163
Mekong River Delta 788 901 962 1,016 1,131 1,305
Whole country 1,435 1,809 2,004 2,203 2,555 2,877
Sources: General Statistics Office, 2000. Statistical Year Book 2000, General Statistics Office,
Hanoi; General Statistics Office, 2001. Statistical Year Book 2001, General Statistics Office,
Hanoi.
 GEOGRAPHY, RESOURCES AND POPULATION 25

Some commentators, focusing on Ho Chi Minh City with its higher income
and more developed services, conclude that all the south of Viet Nam is more
developed economically than the north. The southeast (which includes the
major industrial centres of Ho Chi Minh City, Dong Nai and Vung Tau) does
have a considerably higher GDP per capita and accounts for nearly half the
country’s industrial output. On the other hand, per capita incomes in the
Mekong Delta in the south are lower than in the northern Red River Delta. It
is the gap between the larger urban centres (including Ho Chi Minh City,
Dong Nai, Hanoi and Hai Phong) and rural areas that is more pronounced.
Nearly 40 per cent of industrial output from domestic enterprises comes
from the southeast and 20 per cent from the Red River Delta. The Mekong
River Delta accounts for a further 13 per cent (Table 2.6).
Most foreign investment in industry has been concentrated in the southeast
and the Red River Delta. When industrial output from enterprises with foreign
investment is included, almost 50 per cent of total industrial output is from
the southeast and 20 per cent from the Red River Delta. The share of total
industrial output in the southeast has remained largely unchanged over the
last seven years. Output in the Red River Delta has increased marginally, while
that in the Mekong River Delta has fallen.

NOTES
1
Even a stable proportion of urban population in the total population would imply some
rural–urban migration, as fertility rates have fallen faster in urban areas than in the
countryside (in 1989 the crude birth rate in urban areas was 24.1 compared to 33.6 in
rural areas). The corresponding crude death rates were 5.1 and 7.9, suggesting a significant
difference in the urban and rural natural rates of population increase (General Statistics
Office 1994). A 1994 survey indicates that the differences in fertility persist (General
Statistics Office 1995).
2
Except for the male cohort of 45–54 at that time, which had been severely depleted by
war deaths.
3
A term used to denote ‘the radical declines in death and birth rates associated with societal
modernization’ (Boom and Williamson 1998:419–56). They argue that a demographic
bonus has contributed to the stellar economic performance in East Asia in recent decades.
4
Alternative definitions might result in a significantly higher figure. The Viet Nam Urban
Sector Strategy Study (Final Report November 1995) noted that the Vietnamese definition
of urban residence did not conform to international practice, as rural areas within cities and
26 VIET NAM: A TRANSITION TIGER?

municipalities were excluded from the urban totals; the study team estimated that, using
the more inclusive definition about 8 per cent more of the population resided in urban
areas (resulting in a total of 28.1 per cent).
5
The estimate in the Table is from an ADB source that allows regional comparisons. The
GSO estimates that about 76 per cent of the population were living in rural areas in 2000.
6
Based on the 1999 Census, the urban populations of the three provinces were Hanoi
1.552 million, Hai Phong 0.572 million and Ho Chi Minh City 4.245 million. However,
as the urban–rural distinction is necessarily somewhat arbitrary and the peri-urban rural
areas are very much part of the urban economies, the total provincial populations may be
more revealing of relative size. The total provincial population in 1999 was estimated to be
Hanoi 2.685 million, Hai Phong 1.691 million and Ho Chi Minh City 5.222 million.
7
At least in terms of the eventual production possibilities. There are still difficult water
management and infrastructure constraints to be resolved.
8
In 2001, Tokyo had a population of about 26.4 million, Shanghai, 12.9 million; Jakarta,
11.0 million; Osaka, 11.0 million; Manila, 10.9 million; Beijing, 10.8 million; and Seoul,
9.9 million in 2000 (see McNicholl 2002:20).
 VIET NAM’S DEVELOPMENT EXPERIENCE 1

Viet Nam: a transition tiger

Economic performance and key issues

Abstract for chapter 3

From the late 1980s, Viet Nam experienced an economic turnaround in terms
of growth, food production, stability, resource mobilisation, and the opening
up of the economy to trade and foreign investment. This chapter addresses the
key issues that led to the improvement of economic growth performance.
After a historical overview of macroeconomic data, two questions are posed:
‘What determined the timing of the up-turn of the economy?’ and ‘Why did
the economy respond so energetically to the opportunities offered by the new
policy environment and why did that initial response set the economy on a
path of sustained growth?’
The answer to the first question is straightforward: the Doi Moi economic
reforms sparked the turn-around in the economy. The answer to the second
question is more complex: while the change in the economic policy regime
determined the timing and direction of the change in economic performance
this does not in itself explain the pace and sustained character of subsequent
growth. A good part of the explanation of the Vietnamese performance lies in
the role of institutions, and in human capital.
The chapter closes with a discussion on entrepreneurship and innovation in
development and the removal of barriers to entrepreneurship and innovation,
specifically by the Doi Moi reforms

Keywords:
Doi Moi, economic growth, economic reforms, entrepreneurship, human capital,
inflation, reform, Seventh Party Congress, Sixth Party Congress, state
institutions, Washington consensus

Published by ANU E Press, 2003

 ECONOMIC PERFORMANCE AND KEY ISSUES 27

3
ECONOMIC PERFORMANCE AND
KEY ISSUES

A HISTORICAL OVERVIEW OF MACROECONOMIC DATA

Table 3.1 highlights Viet Nam’s economic turnaround from the late 1980s in
terms of growth, food production, stability, resource mobilisation, and opening
up of the economy to trade and foreign investment. This was achieved while
maintaining progress in social development. This strong performance took
place in an international context where median growth in per capita incomes
in developing countries fell to zero over 1980–98 (compared with 2.5 per cent
per year from 1960–79) (Easterly 2001).
Following an initial economic recovery immediately after formal reunification
in 1976, annual economic growth averaged only 0.4 per cent in the five years
to 1980. With population increasing by about 2.3 per cent each year, per
capita income declined. Prices increased by an average of more than 20 per
cent each year.
Economic growth performance improved during the early 1980s, but
macroeconomic imbalances increased and inflation accelerated. As the
government sought to stabilise the economy in the early years of reform, growth
rates declined. Average inflation remained high, but had been greatly reduced
by the end of the 1980s. The 1990s were marked by accelerating growth and
price stability.
When Doi Moi was introduced at the Sixth Party Congress at the end of
1986, Viet Nam was facing a major economic crisis. The annual rate of inflation

27
28 VIET NAM: A TRANSITION TIGER?

Table 3.1 Average annual indicators of growth and inflation, 1976–80

to 1996–2001 (per cent)
Inflation GDP Agriculture Services Industry
(CPI)
1976–80 21.2 0.4 1.9 -0.1 3.3
1981–85 74.2 6.4 5.3 4.7 9.3
1986–90 298.7 3.9 3.7 8.7 4.7
1991–95 23.5 8.2 4.3 9.5 12.6
1996–2001a 3.4 7.0 3.9 7.3 12.2
Note: a 2001 data is based on end-year government estimates. Services before 1986 only included
trade.
Sources: General Statistics Office, various issues. Statistical Yearbook, Statistical Publishing House,
Hanoi.

Figure 3.1 GDP growth by sector, 1997–2001 (per cent change)

20

Services
15

Industry
10
Per cent change

GDP

5
Agriculture

-5
1987 1989 1991 1993 1995 1997 1999 2001
 ECONOMIC PERFORMANCE AND KEY ISSUES 29

was over 700 per cent, exports were less than half of imports, there was virtually
no foreign direct investment (FDI), and only limited official development
assistance. When the Seventh Party Congress met in 1991, economic growth
had begun to accelerate, the value of exports had quadrupled, and inflation
had been brought down to 67 per cent. From the early 1990s, the picture
improved markedly, with stable macroeconomic conditions and a dramatic
acceleration in growth of income and employment. Trends in economic growth
and changes in key indicators since Doi Moi are summarised in Table 3.2.
The transition has been accompanied by changes in the structure of major
components of GDP. The share of agriculture fell from 44 per cent of GDP
(current prices) in 1986 to 24 per cent in 2001, while the share of industry
increased from 26 to 38 per cent. The share of services also increased as indicated
in the Table 3.3.
More surprising, at least for most external observers of the Vietnamese
economy, was the fact that the share of the state in economic output increased
from 22 per cent in 1986 to 40 per cent in 1996, before declining marginally
in more recent years. Possible explanations for this trend are discussed
throughout this report.

WHAT NEEDS TO BE EXPLAINED?

At the end of the 1980s, the economy was stagnating, economic survival for
most segments of the population involved a difficult struggle, infrastructure
still showed the damage of the generation of warfare, and the nation’s economic
future seemed quite uncertain. By the turn of the century, there had been a
substantial reduction in poverty, a fast-growing middle class enjoyed levels of
consumption unimaginable a decade earlier, infrastructure had not only been
rehabilitated, but in critical respects had been expanded and, perhaps most
important, there was a widely held perception, both among Vietnamese and
external observers, that the economy was firmly set on the path of economic
development. This breakthrough is not only evident in the economic numbers,
but for observers of the economy was palpable in all aspects of economic life.
This dramatic change in economic fortunes raises two questions. The first,
and easiest to answer, is what determined the timing of the up-turn of the
economy? The answer to that question is straightforward—the Doi Moi
economic reforms described throughout this volume sparked the turn-around
30 VIET NAM: A TRANSITION TIGER?

Table 3.2 Indicators of economic developments, 1986–2001

Indicator Sixth Party Seventh Party Eighth Party Ninth Party
Congress Congress Congress Congress
1986 1991 1996 2001a
Economic growth (%) 3.4 6.0 9.3 6.8
CPI (%, year to Dec.) 775 67 4.5 0.8
Illiteracy rate (% of population) 10.7 9.2 7.7 6.5
Income per capita (US$) 180 228 339 410
Food grain production
(kg of paddy/person) 301 323 385 433
Budget surplus (% of GDP) –6.2 –3.8 –0.7 –3.5
Budget revenue (% of GDP) 14.0 13.5 23.6 21.8
Gross domestic savings (% of GDP) n.a. 13.2 16.7 24.0
Current account (% of GDP) –2.7 –2.0 –11.1 1.5
Gross domestic investment
(% of GDP) n.a. 15.1 27.9 26.1
FDI inflows—US$ million - 229 1,838 1,200
ODA inflows—US$ million 147 229 939 1,700
Exports—US$ million 494 2042 7,330 15,027
Imports—US$ million 1,121 2,105 10,481 16,162
Trade (% of GDP) 25.1 63.7 100.0 n.a.
Note: a Preliminary estimates.
Sources: General Statistics Office, various issues. Statistical Yearbook, Statistical Publishing House,
Hanoi. International Monetary Fund, various issues. Vietnam: recent economic developments,
International Monetary Fund, Washington, DC.

Table 3.3 Structural changes in the economy, 1986–2001

(per cent of GDP at current prices)
Sixth Party Seventh Party Eighth Party Ninth Party
Congress Congress Congress Congress
1986 1991 1996 2001
Agriculture 43.8 40.5 27.8 23.6
Industry and construction 25.7 23.8 29.7 37.8
Services 30.5 35.7 42.5 38.6
Total 100.0 100.0 100.0 100.0
State 33.1 33.2 40.0 38.6
Non-state 66.9 66.8 60.0 61.4
Sources: General Statistics Office, various issues. Statistical Year Book, Statistical Publishing
House.
 ECONOMIC PERFORMANCE AND KEY ISSUES 31

in the economy. The implications of that process for the economic growth
performance are clear enough. From the point of view of conventional economic
interpretations, the easy part of the story to understand is the impact of market
liberalisation and macroeconomic stabilisation. Viet Nam implemented ‘sound’
economic policies, and reaped the promised rewards. This could be seen as a
vindication of the ‘Washington consensus’ and, indeed, has been presented as
such. 1
There is, however, a more difficult question to be addressed. While the
change in the economic policy regime determined the timing and direction of
the change in economic performance, it does not in itself explain the pace and
sustained character of the subsequent growth. While bad policies can result in
economic stagnation and good policies can encourage and accommodate growth,
policy is only part of the story. Many countries have implemented ambitious
reform programs without stimulating the same level of sustained response.
The other part of the story is to explain why, in this case, the economy responded
so energetically to the opportunities offered by the new policy environment
and why that initial response set the economy on a path of sustained growth.

INSTITUTIONS, HUMAN CAPITAL AND ENTREPRENEURSHIP

This chapter does not claim to offer a definitive answer to the second question,
but on the basis of the authors’ observations, some clues are offered. Interestingly,
it is easier to eliminate some possible explanations than to provide all the
answers.
For example, the initial sharp acceleration in growth is not explained by any
sharp increase in capital formation. True, investment increased significantly,
but the increase in the productivity of given levels of investment was more
important than acceleration in the rate of capital formation.
Nor is Viet Nam’s performance to be explained by the flow of external aid
(although the flow of ideas and exchange of experience were important). The
story told here demonstrates that the crucial transformation and acceleration
in growth took place in a period when external assistance was declining, so
that, although it can be reasonably argued that the growth in foreign aid from
1994 on supported investments without which growth would have been
constrained in the late 1990s, it is difficult to make a plausible case that foreign
aid either initiated the process or determined the liveliness of the response.
32 VIET NAM: A TRANSITION TIGER?

The main difficulty in teasing out a credible thesis is that a good part of the
explanation of the Vietnamese performance lies in two areas of analysis, which
are important, but where evidence is imprecise—the role of institutions and
human capital. The pragmatic willingness to adopt market-oriented reforms
was combined with an institutional framework and a population which was
able to respond to the opportunities provided by the market stimuli.
The description of the role of state institutions in various parts of this study
suggests that the effectiveness of the institutional framework is difficult to
explain within the orthodoxy of the Washington consensus. The semi-reformed
state economic apparatus has done much better than proponents of faster reform
predicted. Many state institutions have performed rather well in taking
advantage of competitive markets and adjusting to the new economic realities.
Of course, the proponents of accelerated market reform and pure models of
market institutions argue that if only reform were faster and more complete,
growth would have been even faster, and if further reforms are not implemented
with some urgency, growth will falter. Alternative judgements are always possible
about counter-historical options, although it should be noted that, given the
growth performance actually achieved, it would be surprising if alternative
arrangements would have achieved much more.
The actual strengths of existing institutions and the particular path to reform
chosen were demonstrated not only by the responsiveness of the ‘semi-reformed’
system to the possibilities of export-led growth in the period 1990–97, but
also in responding with speed and effectiveness to the East Asian crisis from
1998 onwards, when pro-active state economic management (reducing barriers
to domestic private investment and curtailing lower priority public investments)
allowed the government to manage the potential crisis rather well. Indeed, the
caution in implementing advice to reform and deregulate2 the banking and
financial system appear to have helped shield the economy from the full
consequences of the speculative financial bubble that shook neighbouring
economies.
The danger is that, if institutions are judged largely on their conformity to
a predetermined and somewhat dogmatic template, then there is likely to be a
failure to understand how they work in practice. It is particularly necessary to
make that effort of understanding when institutional behaviour and performance
does not conform to preconceptions.
 ECONOMIC PERFORMANCE AND KEY ISSUES 33

In turn, however, institutions performed well because of the use Vietnamese

have made of them. The high quality of human capital and its importance is
readily observable in Viet Nam in the facility with which so many actors in the
economy—from farmers, to businessmen and state officials—have demonstrated
entrepreneurial flair in grasping economic opportunities.

ENTREPRENEURSHIP AND INNOVATION IN DEVELOPMENT

There is a long tradition in the study of economic development that places
entrepreneurship in the centre of explanations of development. Schumpeter’s
The Theory of Economic Development (1936), published before the First World
War, argued that entrepreneurship was the critical factor in explaining how
economic systems raised themselves to new levels of performance. And nearly
fifty years ago, Hirschman (1958) returned to similar themes in his Strategy of
Economic Development. More recently, discussions of human and social capital
have laid new emphasis on those human factors that determine the capability
of societies to take advantage of economic opportunities.
The difficulty in using entrepreneurship as an explanatory variable arises
from the fact that, although economists are willing to recognise the crucial
importance of human capital in general and entrepreneurship in particular, it
is not easy to define what in practice that means, in terms either of making ex
ante predictions of performance, or in terms of any policy implications. Effective
entrepreneurship is recognisable when it occurs but it is not measurable and
its appearance is not easily predictable.
However, convincing evidence has been presented of the importance of
entrepreneurship and policies supporting it as a key explanatory variable in
explaining the ‘Asian economic miracle’. In an interesting analysis of the
experience of rapid economic growth in East Asia, Nelson and Pack have
distinguished two schools of thought in interpreting the performance. One
school (assimilation theories) ‘stresses the entrepreneurship, innovation and
learning, all encouraged by the policy regime, that these economies had to go
through...’. The other school (accumulation theories) ‘emphasizes physical
and human capital accumulation’ (Nelson and Pack 1999:418).
Nelson and Pack develop a strong case in support of the assimilation approach.
One point they make is that, even if these follower countries were able to
borrow techniques developed elsewhere, this did not simply involve importing
34 VIET NAM: A TRANSITION TIGER?

an existing technology ‘off the shelf ’, but also involved an important element
of entrepreneurship in adapting and assimilating the new production
techniques.
Another recent study of the sources of economic growth by Parente and
Prescott argues in a similar vein that
[a] necessary precondition for a country to undergo a development miracle is that the country is
not exploiting a significant amount of stock of useable knowledge and therefore is poor relative
to the industrial leader. The stock of knowledge will be little exploited if barriers to the adoption
and efficient use of this stock are high and have been in place for an extended period. In 1965,
many countries besides South Korea met this precondition. Most of these countries remain
poor relative to the leader because unlike South Korea, they did not adopt new policies that
greatly reduced barriers to the efficient use of this knowledge (2000:4).

REMOVING BARRIERS TO ENTREPRENEURSHIP AND

INNOVATION
While it is still early days to describe the Vietnamese achievement as an economic
miracle, the economic achievement of Viet Nam in the 1990s is consistent
with the views of these two sources. Prior to 1986, Viet Nam had gone through
an extended period where there were enormous barriers to the adoption and
efficient use of the stock of useable knowledge. During the 1970s and 1980s,
most of the population had no access to international media, books, education,
travel and research, and no contact with foreigners. The state barred most of
the population from investing in skills (for example, foreign language training)
and travel that may have opened up new opportunities.
The Doi Moi reforms removed barriers to the utilisation of the available and
potential stock of knowledge, not only in the narrowly technical sense, but
also in the broader sense of the possibilities of taking advantage of Vietnamese
comparative advantage, particularly in the regional context. A combination of
improved incentives, increased competition, and reductions in barriers to the
adoption of existing knowledge are crucial to explaining the rapid improvements
in economic performance over the last 20 years.
The other underlying institutional factor which must be addressed is that
of the energy, liveliness and entrepreneurial skills of the population A pervasive
and critical element in explaining the response to market reforms and the
success in making imperfect institutions work is undoubtedly the quality of
the Vietnamese workforce. It is, of course, characteristic of informal discussion
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We are not surprised that the historian should not mention the
invasion of Zerah, since he refers us for the wars f Asa to the
Judæan annals. It is much more remarkable that he wholly omits all
reference to the prophetic activity of which the chronicler speaks as
exercised in this reign. He had evidently formed a very high estimate
of Asa, with none of the shadows and drawbacks which in the later
annalist seemed to point to a marked degeneracy of character in his
later days. On the favourable side the historian does not mention the
high and eulogistic encouragement which the king received from
Azariah, the son of Oded; nor the multitude which joined him out of
Israel; nor the cities which he took from the hill country of Ephraim;
nor his restoration of the altar. He even passes over the solemn
league and covenant which he made with Judah and Benjamin and
many members of the Ten Tribes in his fifteenth year, at a festival
celebrated with an immense sacrifice, and with shouting and
trumpets and cornets and a great exultant oath.[559] On the
unfavourable side he does not tell us that Hanani the Seer rebuked
him for summoning the help of the Syrians instead of relying on
Jehovah; and that Asa "was in a rage because of this thing, and shut
up Hanani in the House of the Stocks," and "oppressed some of the
people at the same time," apparently because they took part with
the prophet.[560] For none of these events does the chronicler refer
us to any ancient authority. They came from separate records,
perhaps written in prophetic commentaries and unknown to the
compiler of the Kings. But whatever may have been the failings or
shortcomings of Asa it is clear that he must be ranked among the
more eminent and righteous sovereigns of Judah.
 CHAPTER XXXI.
JEHOSHAPHAT.
1 Kings xxii. 41-50.
Before we leave the House of David we must speak of Jehoshaphat,
the last king of Judah whose reign is narrated in the First Book of
Kings. He was abler, more powerful, and more faithful to Jehovah
than any of his predecessors, and was alone counted worthy in later
ages to rank with Hezekiah and Josiah among the most pious rulers
of the Davidic line. The annals of his reign are found chiefly in the
Second Book of Chronicles, where his story occupies four long
chapters. The First Book of Kings compresses all record of him into
nine verses, except so far as his fortunes are commingled with the
history of Ahab. But both accounts show us a reign which
contributed as greatly to the prosperity of Judah as that of Jeroboam
II. contributed to the prosperity of Israel.
He ascended the throne at the age of thirty-five. He was apparently
the only son of Asa, by Azubah, the daughter of Shilhi; for Asa,
greatly to his credit, seems to have been the first king of Judah who
set his face against the monstrous polygamy of his predecessors,
and, so far as we know, contented himself with a single wife. He
received the high eulogy that "he turned not aside from doing that
which was right in the eyes of the Lord," with the customary
qualification that, nevertheless, the people still burnt incense and
offerings at the Bamoth, which were not taken away. The chronicler
says that he did take them away. This stock contradiction between
the two authorities must be accounted for either by a contrast
between the effort and its failure, or by a distinction between
idolatrous Bamoth and those dedicated to the worship of Jehovah to
which the people clung with the deep affection which local
sanctuaries inspire.
To the historians of the Book of Kings the central fact of
Jehoshaphat's history is that "he made peace with the King of
Israel." As a piece of ordinary statesmanship no step could have
been more praiseworthy. The sixty-eight years or more which had
elapsed since the divinely-suggested choice of Jeroboam by the
Northern Kingdom had tended to soften old exasperations. The
kingdom of Israel was now an established fact, and nothing had
become more obvious than that the past could not be undone.
Meanwhile the threatening spectre of Syria, under the dynasty of
Benhadad, was beginning to throw a dark shadow over both
kingdoms. It had become certain that, if they continued to destroy
each other by internecine warfare, both would succumb to the
foreign invader. Wisely, therefore, and kindly Jehoshaphat
determined to make peace with Ahab, in about the eighth year after
his accession; and this policy he consistently maintained to the close
of his twenty-five years' reign.
No one surely could blame him for putting an end to an exhaustive
civil war between brethren. Indeed, in so doing he was but carrying
out the policy which had been dictated to Rehoboam by the prophet
Shemaiah, when he forbade him to attempt the immense expedition
which he had prepared to annihilate Jeroboam. Peace was necessary
to the development and happiness of both kingdoms, but even more
so to the smaller and weaker, threatened as it was not only by the
more distant menace of Syria, but by the might of Egypt on the
south and the dangerous predatory warfare of Edom and Moab on
the east.
But Jehoshaphat went further than this. He cemented the new peace
by an alliance between his young son Jehoram and Athaliah,
daughter of Ahab and Jezebel, who was then perhaps under fifteen
years of age.
Later chroniclers formed their moral estimates by a standard which
did not exist so many centuries before the date at which they wrote.
If we are to judge the conduct of these kings truthfully we must take
an unbiassed view of their conduct. We adopt this principle when we
try to understand the characters of saints and patriarchs like
Abraham, Isaac, and Jacob, or judges and prophets like Gideon,
Deborah, and Samuel; and in general we must not sweepingly
condemn the holy men of old because they lacked the full
illumination of the gospel. We must be guided by a spirit of fairness
if we desire to form a true conception of the kings who lived in the
ninth century before Christ. It is probable that the religious gulf
between the kings of Judah and Israel was not so immense as on a
superficial view it might appear to be; indeed, the balance seems to
be in favour of Jeroboam as against Abijam, Rehoboam, or even
Solomon. The worship of the golden symbols at Dan and Bethel did
not appear half so heinous to the people of Judah as it does to us.
Even in the Temple they had cherubim and oxen. The Bamoth to
Chemosh, Milcom, and Astarte glittered before them undisturbed on
the summit of Olivet, and abominations which they either tolerated
or could not remove sheltered themselves in the very precincts of
the Temple, under the shadows of its desecrated trees. To the pious
Jehoshaphat the tolerance of Baal-worship by Ahab could hardly
appear more deadly than the tolerance of Chemosh-worship by his
great-great-grandfather, and the permission of Asherim and
Chammanim by his grandfather, to say nothing of the phallic horror
openly patronised by the queen-mother who was a granddaughter of
David. That Ahab himself was a worshipper of Jehovah is sufficiently
proved by the fact that he had given the name of Athaliah to the
young princess whose hand Jehoshaphat sought for his son, and the
name of Ahaziah ("Jehovah taketh hold") to the prince who was to
be his heir. Jehoshaphat acted from policy; but so has every king
done who has ever reigned. He could neither be expected to see
these things with the illumination of a prophet, nor to read—as later
writers could do in the light of history—the awful issues involved in
an alliance which looked to him so necessary and so advantageous.
At the time of the proposed alliance there seems to have been no
protest—at any rate, none of which we read. Micaiah alone among
the prophets uttered his stern warning when the expedition to
Ramoth Gilead was actually on foot, and Jehu, son of Hanani, went
out to rebuke Jehoshaphat at the close of that disastrous enterprise.
It is to the history attributed to this seer and embodied in the annals
of Israel that the chronicler refers. "Shouldst thou help the wicked,"
asked the bold prophet, "and love them that hate the Lord? For this
thing wrath is upon thee from the Lord. Nevertheless, there are
good things found in thee, in that thou hast put away the Asheroth
out of the land, and hast set thy heart to seek God."
The moral principle which Jehu, son of Hanani, here enunciated is
profoundly true. It was terribly emphasised by the subsequent
events. A just and wise forecast may have sanctioned the restoration
of peace, but Jehoshaphat might at least have learnt enough to
avoid affinity with a queen who, like Jezebel, had introduced frightful
and tyrannous iniquities into the House of Ahab. Faithful as the King
of Judah evidently intended to be to the law of Jehovah, he should
have hesitated before forming such close bonds of connexion with
the cruel daughter of the usurping Tyrian priest. His error hardly
diminished the warmth of that glowing eulogy which even the
chronicler pronounces upon him; but it brought upon his kingdom,
and upon the whole family of his grandchildren, overwhelming
misery and all but total extermination. The rules of God's moral
government are written large on the story of nations, and the
consequences of our actions come upon us not arbitrarily, but in
accordance with universal laws. When we err, even though our error
be leniently judged and fully pardoned, the human consequences of
the deeds which we have done may still come flowing over us with
the resistless march of the ocean tides.
 "You little fancy what rude shocks apprise us.
We sin: God's intimations rather fail
In clearness than in energy."

Jehoshaphat did not live to see the ultimate issues of massacre and
despotism which came in the train of his son Jehoram's marriage.
[561] Perhaps to him it wore the golden aspect which it wears in the
forty-fifth Psalm, which, as some have imagined, was composed on
this occasion. But he had abundant proof that close relationship for
mutual offence and defence with the kings of Israel brought no
blessing in its train. In the expedition against Ramoth Gilead when
Ahab was slain, he too very nearly lost his life. Even this did not
disturb his alliance with Ahab's son Ahaziah, with whom he joined in
a maritime enterprise which, like its predecessors, turned out to be a
total failure.
Jehoshaphat in his successful wars had established the supremacy
over Edom which had been all but lost in the days of Solomon. The
Edomite Hadad and his successors had not been able to hold their
own, and the present kings of Edom were deputies or vassals under
the suzerainty of Judæa.[562] This once more opened the path to
Elath and Ezion-Geber on the gulf of Akaba. Jehoshaphat, in his
prosperity, felt a desire to revive the old costly commerce of
Solomon with Ophir for gold, sandal wood, and curious animals. For
this purpose he built "ships of Tarshish," i.e., merchant ships, like
those used for the Phœnician trade between Tyre and Tartessus, to
go this long voyage. The ships, however, were wrecked on the reefs
of Ezion-Geber, for the Jews were timid and inexperienced mariners.
Hearing of this disaster, according to the Book of Kings, Ahaziah
made an offer to Jehoshaphat to make the enterprise a joint one,—
thinking, apparently, that the Israelites, who, perhaps, held Joppa
and some of the ports on the coast, would bring more skill and
knowledge to bear on the result. But Jehoshaphat had had enough
of an attempt which was so dangerous and which offered no solid
advantages. He declined Ahaziah's offer. The story of these
circumstances in the chronicler is different. He speaks as if from the
first it was a joint experiment of the two kings, and says that, after
the wreck of the fleet, a prophet of whom we know nothing, "Eliezer,
the son of Dodavahu of Mareshah,"[563] prophesied against
Jehoshaphat, saying, "Because thou hast joined thyself with
Ahaziah, Jehovah hath made a breach in thy works." The passage
shows that the word "prophesied" was constantly used in the sense
of "preached," and did not necessarily imply any prediction of events
yet future. The chronicler, however, apparently makes the mistake of
supposing that ships were built at Ezion-Geber on the Red Sea to sail
to Tartessus in Spain![564] The earlier and better authority says
correctly that these merchantmen were built to trade with Ophir, in
India, or Arabia. The chronicler seems to have been unaware that
"ships of Tarshish," like our "Indiamen," was a general title for
vessels of a special build.[565]
We see enough in the Book of Kings to show the greatness and
goodness of Jehoshaphat, and later on we shall hear details of his
military expeditions.[566] The chronicler, glorifying him still more,
says that he sent princes and Levites and priests to teach the Book
of the Law throughout all the cities of Judah; that he received large
presents and tribute from neighbouring peoples; that he built castles
and stone cities; and that he had a stupendous army of 160,000
troops under four great generals. He also narrates that when an
immense host of Moabites, Ammonites, and Meunim came against
him to Hazezon-Tamar or Engedi, he took his stand before the
people in the Temple in front of the new court and prayed.
Thereupon the Spirit of the Lord came upon "Jahaziel the son of
Zechariah, the son of Benaiah, the son of Jeiel, the son of Mattaniah
the Levite, of the sons of Asaph," who told them that the next day
they should go against the invader, but that they need not strike a
blow. The battle was God's, not theirs. All they had to do was to
stand still and see the salvation of Jehovah. On hearing this the king
and all his people prostrated themselves, and the Levites stood up to
praise God. Next morning Jehoshaphat told his people to believe
God and His prophets and they should prosper, and bade them chant
the verse, "Give thanks unto the Lord, for His mercy endureth for
ever," which now forms the refrain of Psalm cxxxvi.[567] On this
Jehovah "set liers in wait against the children of Ammon, Moab, and
Mount Seir." Intestine struggles arose among the invaders. The
inhabitants of Mount Seir were first destroyed, and the rest then
turned their swords against each other until they were all "dead
bodies fallen to the earth." The soldiers of Jehoshaphat despoiled
these corpses for three days, and on the fourth assembled
themselves in the valley of Beracah ("Blessing"), which received its
name from their tumultuous rejoicings.[568] After this they returned
to Jerusalem with psalteries and harps and trumpets, and God gave
Jehoshaphat rest from all his enemies round about. Of all this the
historian of the Kings tells us nothing. Jehoshaphat died full of years
and honours, leaving seven sons, of whom the eldest was Jehoram.
[569] His reign marks a decisive triumph of the prophetic party. The
prophets not only felt a fiercely just abhorrence of the abominations
of Canaanite idolatry, but wished to establish a theocracy to the
exclusion on the one hand of all local and symbolic worship, and on
the other of all reliance on worldly policy. Up to this time, as Dean
Stanley says in his usual strikingly picturesque manner, "if there was
a 'holy city,' there was also an 'unholy city' within the walls of Sion.
It was like a seething caldron of blood and froth 'whose scum is
therein and whose scum has not gone out of it.' The Temple was
hemmed in by dark idolatries on every side. Mount Olivet was
covered with heathen sanctuaries, monumental stones, and pillars of
Baal. Wooden images of Astarte under the sacred trees, huge
images of Molech appeared at every turn in the walks around
Jerusalem."[570] Jehoshaphat introduced a decisive improvement
into the conditions which prevailed under Rehoboam and Abijah, but
practically the conflict between light and darkness goes on for ever.
It was in days when Jerusalem had come to be regarded by herself
and by all nations as exceptionally holy, that she, who had been for
centuries the murderess of the prophets, became under her priestly
religionists the murderess of the Christ, and—far different in God's
eyes from what she was in her own—deserved the dreadful stigma
of being "the great city which spiritually is called Sodom and Egypt."
 CHAPTER XXXII.
THE KINGS OF ISRAEL FROM ZIMRI TO AHAB.
b.c. 889-877.
1 Kings xvi. 11-34.
As far as we can understand from our meagre authorities—and we
have no independent source of information—we infer that Elah, son
of the powerful Baasha, was a self-indulgent weakling. The army of
Israel was encamped against Gibbethon—originally a Levitical town
of the Kohathites, in the territory of Dan—which they hoped to wrest
from the Philistines. It was during the interminable and intermittent
siege of this town that Nadab, the son of Jeroboam, had been
murdered. Whatever may have been his sins, he was in his proper
place leading the armies of Israel. Elah was not there, but in his
beautiful palace at Tirzah. It was probably contempt for his
incapacity and the bad example of Baasha's successful revolt, that
tempted Zimri to murder him as he was drinking himself drunk in the
house of his chamberlain Arza. Zimri was a commander of half the
chariots, and probably thinking that he could secure the throne by a
coup de main he slew not only Elah, but every male member of his
family. To extinguish any possibility of vengeance, he even
massacred all who were known to be friends of the royal house.
It was a consummate crime, and it was followed by swift and
condign judgment. Through that sea of blood Zimri only succeeded
in wading to one week's royalty, followed by a shameful and
agonising death. We are told that he did evil in the sight of the Lord
by following the sin of Jeroboam's calf-worship. The phrase must be
here something of a formula, for in seven days he could hardly have
achieved a religious revolution, and every other king of Israel, some
of whom have long and prosperous reigns, maintained the
unauthorised worship. But Zimri's atrocious revolt had been so ill-
considered that it furnished a proverb of the terrible fate of rebels.
[571] He had not even attempted to secure the assent of the army at
Gibbethon. No sooner did the news reach the camp than the soldiers
tumultuously refused to accept Zimri as king, and elected Omri their
captain. Omri instantly broke up the camp, and led them to besiege
the new king in Tirzah. Zimri saw that his cause was hopeless, and
took refuge in the fortress (birah) attached to the palace.[572] When
he saw that even there he could not maintain himself, he preferred
speedy death to slow starvation or falling into the hands of his rival.
He set fire to the palace, and, like Sardanapalus, perished in the
flames.[573]
The swift suppression of his treason did not save the unhappy
kingdom from anarchy and civil war. However popular Omri might be
with the army, he was unacceptable to a large part of the people.
They chose as their king a certain Tibni, son of Ginath, who was
supported by a powerful brother named Joram. For four years the
contest was continued. At the end of that time Tibni and Joram were
conquered and killed,[574] and Omri began his sole reign, which
lasted eight years longer.
He founded the most conspicuous dynasty of Israel, and so
completely identified his name with the Northern Kingdom that it
was known to the Assyrians as Beit-Khumri, or "the House of Omri."
[575] They even speak of Jehu the destroyer of Omri's dynasty, as
"the son of Omri."
Incidental allusions in the annals of his son show that Omri was
engaged in incessant wars against Syria. He was unsuccessful, and
Benhadad robbed him of Ramoth Gilead and other cities, enforcing
the right of Syrians to have streets of their own even in his new
capital of Samaria.[576] On the other hand, he was greatly successful
on the south-east against the Moabites and their warrior-king
Chemosh-Gad, the father of Mesha.

Few details of either war have come down to us.[577] We learn,

however, from the famous Moabite stone that he began his assault
on Moab by the capture of Mediba, several miles south of Heshbon,
overran the country, made the king a vassal, and imposed on Moab
the enormous annual tribute of 100,000 sheep and 100,000 rams.
[578] Mesha in his inscription records that Omri "oppressed Moab
many days," and attributed this to the fact that Chemosh was angry
with his chosen people.
He stamped his impress deep upon his subjects. It must have been
to him that the alliance with the Tyrians was due, which in his son's
reign produced consequences so momentous. He "did worse we are
told than all the kings that were before him."[579] Although he is
only charged with walking in the way of Jeroboam, the indignant
manner in which the prophet Micah speaks of "the statutes of Omri"
as still being kept,[580] seems to prove that his influence on religion
was condemned by the prophetic order on special grounds. It is
clear that he was a sovereign of far greater eminence and
importance than we might suppose from the meagreness of his
annals as here preserved; indeed, for thirty-four years after his
accession the history of the Southern Kingdom becomes a mere
appendix to that of the Northern.
One conspicuous service he rendered to his subjects by providing
them with the city which became their permanent and famous
capital. This he did in the sixth year of his reign. The burning of the
fortress-palace of Tirzah, and the rapidity with which the town had
succumbed to its besiegers, may have led him to look out for a site,
which was central, strong, and beautiful. His choice was so prescient
that the new royal residence superseded not only Penuel and Tirzah,
but even Shechem. It was, says Dean Stanley, "as though Versailles
had taken the place of Paris, or Windsor of London." He fixed his eye
on an oblong hill, with long flat summit, which rose in the midst of a
wide valley encircled with hills, near the edge of the plain of Sharon,
and six miles north-west of Shechem. Its beauty is still the
admiration of the traveller in Palestine. It gave point to the
apostrophe of Isaiah: "Woe to the crown of pride, to the drunkards
of Ephraim, whose glorious beauty is a fading flower, which is on the
head of the fat valleys of them that are overcome with wine!... The
crown of pride, the drunkards of Ephraim, shall be trodden under
foot: and the fading flower of his glorious adornment, which is on
the head of the fat valley, shall become as a fading flower and as an
early fig."[581] All around it the low hills and rich ravines were
clothed with fertility. They recall more nearly than any other scene in
Palestine the green fields and parks of England.
It commanded a full view of the sea and the plain of Sharon on the
one hand, and of the vale of Shechem on the other. The town sloped
down from the summit of this hill; a broad wall with a terraced top
ran round it. "In front of the gates was a wide open space or
threshing floor, where the kings of Samaria sat on great occasions.
The inferior houses were built of white brick, with rafters of
sycomore, the grandeur of hewn stones and cedar (Isa. ix. 9, 10).
Its soft, rounded, oblong platform was, as it were, a vast luxurious
couch, in which the nobles securely rested, propped and cushioned
up on both sides, as in the cherished corner of a rich divan."[582]
Far more important in the eyes of Omri than its beauty was the
natural strength of its position. It did not possess the impregnable
majesty of Jerusalem, but its height and isolation, permitting of
strong fortifications, enabled it to baffle the besieging hosts of the
Aramæans in b.c. 901 and in b.c. 892. For three long years it held
out against the mighty Assyrians under Sargon and Shalmanezer. Its
capture in b.c. 721 involved the ruin of the whole kingdom in its fall.
[583] Nebuchadnezzar took it in b.c. 554, after a siege of thirteen
years. In later centuries it partially recovered. Alexander the Great
took it, and massacred many of its inhabitants, b.c. 332. John
Hyrcanus, who took it after a year's siege, tried to demolish it in b.c.
129. After various fortunes it was splendidly rebuilt by Herod the
Great, who called it Sebaste, in honour of Augustus. It still exists
under the name of Sebastïyeh.[584]
When Omri chose it for his residence it belonged to a certain
Shemer, who, according to Epiphanius, was a descendant of the
ancient Perizzites or Girgashites. The king paid for this hill the large
sum of two talents of silver,[585] and called it Shomeron. The name
means "a watch tower," and was appropriate both from its
commanding position and because it echoed the name of its old
possessor.[586]
The new capital marked a new epoch. It superseded as completely
as Jerusalem had done the old local shrines endeared by the
immemorial sanctity of their traditions; but as its origin was purely
political it acted unfavourably on the religion of the people. It
became a city of idolatry and of luxurious wealth; a city in which
Baal-worship with its ritual pomp threw into the shade the worship
of Jehovah; a city in which corrupted nobles, lolling at wine feasts on
rich divans in their palaces inlaid with ivory, sold the righteous for
silver and the needy for a pair of shoes. Of Omri we are told no
more. After a reign of twelve years he slept with his fathers, and
was buried in the city which was to be for so many centuries a
memorial of his fame.
The name of Omri marks a new epoch. He is the first Jewish king
whose name is alluded to in Assyrian inscriptions. Assyria had
emerged into importance in the twelfth century before Christ under
Tiglath-Pileser I., but during the eleventh and down to the middle of
the tenth century it had sunk into inactivity. Assurbanipal, the father
of Shalmanezer II. (884-860), enlarged his dominions to the
Mediterranean westwards and to Lebanon southwards. In 870, when
Ahab was king, the Assyrian warriors had exacted tribute from Tyre,
Sidon, and Biblos.[587] It is not impossible that Omri also had paid
tribute, and it has even been conjectured that it was to Assyrian help
that he owed his throne. The Book of Kings only alludes to the
valour of this warrior-king in the one word "his might";[588] but it is
evident from other indications that he had a stormy and chequered
reign.
BOOK IV.
AHAB AND ELIJAH.
b.c. 877-855.
 CHAPTER XXXIII.
KING AHAB AND QUEEN JEZEBEL.
"Besides what that grim wolf with privy paw
Daily devours apace, and nothing said."
Lycidas.

1 Kings xvi. 29-34.

Omri was succeeded by his son Ahab, whose eventful reign of
upwards of twenty years[589] occupies so large a space even in
these fragmentary records. His name means "brother-father," and
has probably some sacred reference. He is stigmatised by the
historians as a king more wicked than his father, though Omri had
"done worse than all who were before him.". That he was a brave
warrior, and showed some great qualities during a long and on the
whole prosperous career; that he built cities, and added to Israel yet
another royal residence; that he advanced the wealth and prosperity
of his subjects; that he was highly successful in some of his wars
against Syria, and died in battle against those dangerous enemies of
his country; that he maintained unbroken, and strengthened by yet
closer affinity, the recent alliance with the Southern Kingdom,—all
this goes for nothing with the prophetic annalists. They have no
word of eulogy for the king who added Baal-worship to the sin of
Jeroboam. The prominence of Ahab in their record is only due to the
fact that he came into dreadful collision with the prophetic order, and
with Elijah, the greatest prophet who had yet arisen. The glory and
the sins of the warrior-king interested the young prophets of the
schools solely because they were interwoven with the grand and
sombre traditions of their mightiest reformer.
The historian traces all his ignominy and ruin to a disastrous alliance.
The kings of Judah had followed the bad example of David and had
been polygamists. Up to this time the kings of Israel seem to have
been contented with a single wife. The wealth and power of Ahab
led him to adopt the costly luxury of a harem, and he had seventy
sons.[590] This, however, would have been regarded in those days as
a venial offence, or as no offence at all; but just as the growing
power of Solomon had been enhanced by marriage with a princess
of Egypt, so Ahab was now of sufficient importance to wed a
daughter of the King of Tyre. "As though it had been a light thing for
him to walk in the sins of Jeroboam the son of Nebat, he took to
wife Jezebel, the daughter of Ethbaal, King of the Zidonians."
It was an act of policy in which religious considerations went for
nothing. There is little doubt that it flattered his pride and the pride
of his people, and that Jezebel brought riches with her and pomp
and the prestige of luxurious royalty.[591] The Phœnicians were of
the old race of Canaan, with whom all affinity was so strongly
forbidden. Ethbaal—more accurately, perhaps, Itto-baal (Baal is with
him)[592]—though he ruled all Phœnicia, both Tyre and Sidon, was a
usurper, and had been the high priest of the great Temple of
Ashtoreth in Tyre. Hiram, the friend of Solomon, had now been dead
for half a century. The last king of his dynasty was the fratricide
Phelles, whom in his turn his brother Ethbaal slew. He reigned for
thirty-two years, and founded a dynasty which lasted for sixty-two
years more. He was the seventh successor to the throne of Tyre in
the fifty years which had elapsed since the death of Hiram.
Menander of Ephesus, as quoted by Josephus, shows us that in the
history of this family we find an interesting point of contact between
sacred and classic history. Jezebel was the aunt of Virgil's Belus, and
great-aunt of Pygmalion, and of Dido, the famous foundress of
Carthage.[593]
A king named after Baal, and who had named his daughter after
Baal—a king whose descendants down to Maherbal and Hasdrubal
and Hannibal bore the name of the Sun-god[594]—a king who had
himself been at the head of the cult of Ashtoreth, the female deity
who was worshipped with Baal—was not likely to rest content until
he had founded the worship of his god in the realm of his son-in-
law. Ahab, we are told, "went and served Baal and worshipped him."
We must discount by recorded facts the impression which might
primâ facie be left by these sweeping denunciations. It is certain
that to his death Ahab continued to recognise Jehovah. He enshrined
the name of Jehovah in the names of his children.[595] He consulted
the prophets of Jehovah, and his continuance of the calf-worship
met with no recorded reproof from the many true prophets who
were active during his reign. The worship of Baal was due to nothing
more than the unwise eclecticism which had induced Solomon to
establish the Bamoth to heathen deities on the mount of offence. It
is exceedingly probable that the permission of Baal-worship had
been one of the articles of the treaty between Tyre and Israel,
which, as we know from Amos, had been made at this time. It had
probably been the condition on which the fanatical Phœnician
usurper had conceded to his far less powerful neighbour the hand of
his daughter. It was, as we see, alike in sacred and secular history a
time of treaties. The menacing spectre of Assyria was beginning to
terrify the nations. Hamath, Syria, and the Hittites had formed a
league of defence against the northern power, and similar motives
induced the kings of Israel to seek alliance with Phœnicia. Perhaps
neither Omri nor Ahab grasped all the consequences of their
concession to the Sidonian princess.[596] But such compacts were
against the very essence of the religion of Israel, which was "Yahveh
Israel's God, and Israel Yahveh's people."
The new queen inherited the fanaticism as she inherited the ferocity
of her father. She acquired from the first a paramount sway over the
weak and uxorious mind of her husband. Under her influence Ahab
built in Samaria a splendid temple and altar to Baal, in which no less
than four hundred orgiastic priests served the Phœnician idol in
splendid vestments, and with the same pompous ritual as in the
shrines at Tyre. In front of this temple, to the disgust and horror of
all faithful worshippers of Jehovah, stood an Asherah in honour of
the Nature-goddess, and Matstseboth pillars or obelisks which
represented either sunbeams or the reproductive powers of nature.
In these ways Ahab "did more to provoke the Lord God to anger
than all the kings of Israel that were before him."[597] When we
learn what Baal was, and how he was worshipped, we are not
surprised at so stern a condemnation. Half Sun-god, half Bacchus,
half Hercules, Baal was worshipped under the image of a bull, "the
symbol of the male power of generation." In the wantonness of his
rites he was akin to Peor; in their cruel atrocity to the kindred
Moloch; in the demand for victims to be sacrificed to the horrible
consecration of lust and blood he resembled the Minotaur, the
wallowing "infamy of Crete," with its yearly tribute of youths and
maidens. What the combined worship of Baal and Asherah was like
—and by Jezebel with Ahab's connivance they were now
countenanced in Samaria—we may learn from the description of
their temple at Apheka.[598] It confirms what we are incidentally told
of Jezebel's devotions. It abounded in wealthy gifts, and its
multitude of priests, women, and mutilated ministers—of whom
Lucian counted three hundred at one sacrifice—were clad in splendid
vestments. Children were sacrificed by being put in a leathern bag
and flung down from the top of the temple, with the shocking
expression that "they were calves, not children." In the forecourt
stood two gigantic phalli. The Galli were maddened into a tumult of
excitement by the uproar of drums, shrill pipes, and clanging
cymbals, gashed themselves with knives and potsherds, and often
ran through the city in women's dress.[599] Such was the new
worship with which the dark murderess insulted the faith in Jehovah.
Could any condemnation be too stern for the folly and faithlessness
of the king who sanctioned it?
A consequence of this tolerance of polluted forms of worship seems
to have shown itself in defiant contempt for sacred traditions. At any
rate, it is in this connexion that we are told how Hiel of Bethel set at
naught an ancient curse. After the fall of Jericho Joshua had
pronounced a curse upon the site of the city. It was never to be
rebuilt, but to remain under the ban of God. The site, indeed, had
not been absolutely uninhabited, for its importance near the fords of
Jordan necessitated the existence of some sort of caravanserai in or
near the spot.[600] At this time it belonged to the kingdom of Israel,
though it was in the district of Benjamin and afterwards reverted to
Judah.[601] Hiel, struck by the opportunities afforded by its position,
laughed the old cherem to scorn, and determined to rebuild Jericho
into a fortified and important city. But men remarked with a shudder
that the curse had not been uttered in vain. The laying of the
foundation was marked by the death of his firstborn Abiram, the
completion of the gates by the death of Segub, his youngest son.
[602]

The shadow of Queen Jezebel falls dark for many years over the
history of Israel and Judah. She was one of those masterful,
indomitable, implacable women who, when fate places them in
exalted power, leave a terrible mark on the annals of nations. What
the Empress Irene was in the history of Constantinople, or the "She-
wolf of France" in that of England, or Catherine de Medicis in that of
France, that Jezebel was in the history of Palestine. The unhappy
Juana of Spain left a physical trace upon her descendants in the
perpetuation of the huge jaw which had gained her the soubriquet
of Maultasch; but the trace left by Jezebel was marked in blood in
the fortunes of the children born to her. Already three of the six
kings of Israel had been murdered, or had come to evil ends; but
the fate of Ahab and his house was most disastrous of all, and it
became so through the "whoredoms and witchcrafts" of his Sidonian
wife. A thousand years later the name of Jezebel was still ominous
as that of one who seduced others into fornication and idolatry.[603]
If no king so completely "sold himself to work wickedness" as Ahab,
it was because "Jezebel his wife stirred him up."[604]
Yet, however guilty may have been the uxorious apostasies of Ahab,
he can hardly be held to be responsible for the marriage itself. The
dates and ages recorded for us show decisively that the alliance
must have been negotiated by Omri, for it took place in his reign and
when Ahab was too young to have much voice in the administration
of the kingdom. He is only responsible for abdicating his proper
authority over Jezebel, and for permitting her a free hand in the
corruption of worship, while he gave himself up to his schemes of
worldly aggrandisement. Absorbed in the strengthening of his cities
and the embellishment of his ivory palaces, he became neglectful of
the worship of Jehovah, and careless of the more solemn and sacred
duties of a theocratic king.
The temple to Baal at Samaria was built; the hateful Asherah in front
of it offended the eyes of all whose hearts abhorred an impure
idolatry. Its priests and the priests of Astarte were the favourites of
the court. Eight hundred and fifty of them fed in splendour at
Jezebel's table, and the pomp of their sensuous cult threw wholly
into the shade the worship of the God of Israel. Hitherto there had
been no protest against, no interference with the course of evil. It
had been suffered to reach its meridian unchecked, and it seemed
only a question of time that the service of Jehovah would yield to
that of Baal, to whose favour the queen probably believed that her
priestly father had owed his throne. There are indications that
Jezebel had gone further still, and that Ahab, however much he may
secretly have disapproved, had not interfered to prevent her. For
although we do not know the exact period at which Jezebel began to
exercise violence against the worshippers of Jehovah, it is certain
that she did so. This crime took place before the great famine which
was appointed for its punishment, and which roused from cowardly
torpor the supine conscience of the king and of the nation. Jezebel
stands out on the page of sacred history as the first supporter of
religious persecution. We learn from incidental notices that, not
content with insulting the religion of the nation by the burdensome
magnificence of her idolatrous establishments, she made an attempt
to crush Jehovah-worship altogether. Such fanaticism is a frequent
concomitant of guilt. She is the authentic authoress of priestly
inquisitions.
The Borgian monster, Pope Alexander VI., who founded the Spanish
Inquisition, is the lineal inheritor of the traditions of Jezebel. Had
Ahab done no more than Solomon had done in Judah, the followers
of the true faith in Israel would have been as deeply offended as
those of the Southern Kingdom. They would have hated a toleration
which they regarded as wicked, because it involved moral corruption
as well as the danger of national apostasy. Their feelings would have
been even more wrathful than were stirred in the hearts of English
Puritans when they heard of the Masses in the chapel of Henrietta
Maria, or saw Father Petre gliding about the corridors of Whitehall.
But their opposition was crushed with a hand of iron. Jezebel, strong
in her entourage of no less than eight hundred and fifty priests, to
say nothing of her other attendants, audaciously broke down the
altars of Jehovah—even the lonely one on Mount Carmel—and
endeavoured so completely to extirpate all the prophets of Jehovah
that Elijah regarded himself as the sole prophet that was left. Those
who escaped her fury had to wander about in destitution, and to
hide in dens and caves of the earth.
The apostasy of Churches always creeps on apace, when priests and
prophets, afraid of malediction, and afraid of imperilling their worldly
interests become cowards, opportunists, and time-servers, and not
daring to speak out the truth that is in them, suffer the cause of
spirituality and righteousness to go by default. But "when Iniquity
hath played her part, Vengeance, leaps upon the stage. The comedy
is short, but the tragedy is long. The black guard shall attend upon
you: you shall eat at the table of sorrow, and the crown of death
shall be upon your heads, many glittering faces looking upon you."
[605]
 CHAPTER XXXIV.
ELIJAH.
1 Kings xvii. 1-7.

"And Elias the prophet stood up as fire, and his word was
burning as a torch."—Ecclus. xlviii. 1.

"But that two-handed engine at the door

Stands ready to smite once, and smite no more."
Lycida
s
.

Many chapters are now occupied with narratives of the deeds of two
great prophets, Elijah and Elisha, remarkable for the blaze and
profusion of miracles and for similarity in many details. For thirty-
four years we hear but little of Judah, and the kings of Israel are
overshadowed by the "men of God." Both narratives, of which the
later in sequence seems to be the earlier in date, originated in the
Schools of the Prophets. Both are evidently drawn from documentary
sources apart from the ordinary annals of the Kings.
Doubtless something of their fragmentariness is due to the
abbreviation of the prophetic annals by the historians.
Suddenly, with abrupt impetuosity, the mighty figure of Elijah the
Prophet bursts upon the scene like lightning on the midnight. So far
as the sacred page is concerned, he, like Melchizedek, is "without
father, without mother, without descent." He appears before us
unannounced as "Elijah the Tishbite of the inhabitants of Gilead."
Such a phenomenon as Jezebel explains and necessitates such a
phenomenon as Elijah. "The loftiest and sternest spirit of the true
faith is raised up," says Dean Stanley, "face to face with the proudest
and fiercest spirit of the old Asiatic Paganism."
The name Elijah, or, in its fuller and more sonorous Hebrew form,
Elijahu, means "Jehovah is my God." Who he was is entirely
unknown. So completely is all previous trace of him lost in mystery
that Talmudic legends confounded him with Phinehas, the son of
Aaron, the avenging and fiercely zealous priest; and even identified
him with the angel or messenger of Jehovah who appeared to
Gideon and ascended in the altar flame.
The name "Tishbite" tells us nothing. No town of Tishbi occurs in
Scripture, and though a Thisbe in the tribe of Naphtali is mentioned
as the birthplace of Tobit,[606] the existence of such a place is as
doubtful as that of "Thesbon of the Gileadite district" to which
Josephus assigns his birth.[607] The Hebrew may mean "the Tishbite
from Tishbi of Gilead," or "The sojourner from the sojourners of
Gilead"; and we know no more. Elijah's grandeur is in himself alone.
Perhaps he was by birth an Ishmaelite. When the wild Highlander in
Rob Roy says of himself "I am a man," "A man!" repeated Frank
Osbaldistone; "that is a very brief description." "It will serve,"
answered the outlaw, "for one who has no other to give. He who is
without name, without friends, without coin, without country, is still
at least a man: and he that has all these is no more." So Elijah
stands alone in the towering height of his fearless manhood.
Some clue to the swift mysterious movements, the rough asceticism,
the sheepskin robe, the unbending sternness of the Prophet may lie
in the notice that he was a Gileadite, or at any rate among the
sojourners of Gilead, and therefore akin to them. It might even be
conjectured that he was of Kenite origin, like Jonadab, the son of
Rechab, in the days of Jehu.[608] The Gileadites were the
Highlanders of Palestine, and the name of their land implies its
barren ruggedness.[609] They, like the modern Druses, were
 "Fierce, hardy, proud, in conscious freedom bold."

We catch a glimpse of these characteristics in the notice of the four

hundred Gadites who swam the Jordan in Palestine to join the
freebooters of David in the cave of Adullam, "whose faces were like
the faces of lions, and who were as swift as the roes upon the
mountains." Though of Israelitish origin they were closely akin to the
Bedawin, swift, strong, temperate, fond of the great solitudes of
nature, haters of cities, scorners of the softnesses of civilisation.
Elijah shared these characteristics. Like the forerunner of Christ, in
whom his spirit reappeared nine centuries later, he had lived alone
with God in the glowing deserts and the mountain fastnesses. He
found Jehovah's presence, not in the

"Gay religions, full of pomp and gold,"

which he misdoubted and despised, but in the barren hills and wild
ravines and bleak uplands where only here and there roamed a
shepherd with his flock. In such hallowed loneliness he had learnt to
fear man little, because he feared God much, and to dwell familiarly
on the sterner aspects of religion and morality. The one conscious
fact of his mission, the sufficient authentication of his most
imperious mandates, was that "he stood before Jehovah." So
unexpected were his appearances and disappearances, that in the
popular view he only seemed to flash to and fro, or to be swept
hither and thither, by the Spirit of the Lord. We may say of him as
was said of John the Baptist, that "in his manifestation and agency
he was like a burning torch; his public life was quite an earthquake;
the whole man was a sermon, the voice of one crying in the
wilderness." And, like the Baptist, he had been "in the deserts, till
the day of his showing unto Israel."
Somewhere—perhaps at Samaria, perhaps in the lovely summer
palace at Jezreel—he suddenly strode into the presence of Ahab.
Coming to him as the messenger of the King of kings he does not
deign to approach him with the genuflexions and sounding titles
which Nathan used to the aged David. With scanted courtesy to one
whom he does not respect or dread—knowing that he is in God's
hands, and has no time to waste over courtly periphrases or
personal fears—he comes before Ahab unknown, unintroduced.
What manner of man was it by whom the king in his crown and
Tyrian purple was thus rudely confronted? He was, tradition tells us,
a man of short stature, of rugged countenance. He was "a lord of
hair"—the thick black locks of the Nazarite (for such he probably
was) streamed over his shoulders like a lion's mane, giving him a
fierce and unkempt aspect. They that wear soft clothing are in king's
houses, and doubtless under a queen who, even in old age, painted
her face and tired her head, and was given to Sidonian luxuries,
Ahab was accustomed to see men about him in bright apparel. But
Elijah had not stooped to alter his ordinary dress, which was the
dress of the desert by which he was always known. His brown limbs,
otherwise bare, were covered with a heavy mantle, the skin of a
camel or a sheep worn with the rough wool outside, and tightened
round his loins by a leathern girdle. So unusual was his aspect in the
cities east of Jordan, accustomed since the days of Solomon to all
the refinements of Egyptian and Phœnician culture, that it impressed
and haunted the imagination of his own and of subsequent ages.
The dress of Elijah became so normally the dress of prophets who
would fain have assumed his authority without one spark of his
inspiration, that the later Zechariah has to warn his people against
sham prophets who appeared with hairy garments, and who
wounded their own hands for no other purpose than to deceive.[610]
The robe of skin, after the long interspace of centuries, was still the
natural garb of "the glorious eremite," who in his spirit and power
made straight in the deserts a highway for our God.
Such was the man who delivered to Ahab in one sentence his
tremendous message: "As Jehovah, God of Israel, liveth, before
whom I stand"—such was the introductory formula, which became
proverbial, and which authenticated the prophecy—"There shall not
be dew[611] nor rain these years but according to my word." The
phrase "to stand before Jehovah" was used of priests: it was
applicable to a prophet in a far deeper and less external sense.[612]
Drought was one of the recognised Divine punishments for
idolatrous apostasy. If Israel should fall into disobedience, we read in
Deuteronomy, "the Lord shall make the rain of thy land powder and
dust; from heaven shall it come down upon thee—until thou be
destroyed"; and in Leviticus we read, "If ye will not hearken, I will
make your heaven as iron and your earth as brass." The threat was
too significant to need any explanation. The conscience of Ahab
could interpret only too readily that prophetic menace.
The message of Elijah marked the beginning of a three, or three and
a half years' famine. This historic drought is also mentioned by
Menander of Tyre, who says that after a year, at the prayer of
Ethbaal, the priest and king, there came abundant thunder showers.
St. James represents the famine as well as its termination as having
been caused by Elijah's prayer.[613] But the expression of the
historian is general. Elijah might pray for rain, but no prophet could,
proprio motu, have offered up a prayer for so awful a curse upon an
entire country as a famine, in which thousands of the innocent
would suffer no less severely than the guilty. Three years' famine
was a recognised penalty for apostasy. It was one of the sore
plagues of God. It had befallen Judah "because of Saul and his
bloody house,"[614] and had been offered to guilty David as an
alternative for three days' pestilence, or three years' flight before his
enemies.[615] We are not here told that Elijah prayed for it, but that
he announced its commencement, and declared that only in
accordance with his announcement should it close.
He delivered his message, and what followed we do not know.
Ahab's tolerance was great; and, however fierce may have been his
displeasure, he seems in most cases to have personally respected
the sacredness and dignity of the prophets. The king's wrath might
provoke an outburst of sullenness, but he contented himself with
menacing and reproachful words. It was otherwise with Jezebel. A
genuine idolatress, she hated the servants of Jehovah with
implacable hatred, and did her utmost to suppress them by violence.
It was probably to save Elijah from her fury that he was bidden to fly
into safe hiding, while her foiled rage expended itself in the
endeavour to extirpate the whole body of the prophets of the Lord.
But, just as the child Christ was saved when Herod massacred the
infants of Bethlehem, so Elijah, at whom Jezebel's blow was chiefly
aimed, had escaped beyond her reach. A hundred other imperilled
prophets were hidden in a cave by the faithfulness of Obadiah, the
king's vizier.
The word of the Lord bade Elijah to fly eastward and hide himself "in
the brook Cherith,[616] that is before Jordan." The site of this ravine
—which Josephus only calls "a certain torrent bed"—has not been
identified. It was doubtless one of the many wadies which run into
the deep Ghôr or cleft of the Jordan on its eastern side. If it
belonged to his native Gilead, Elijah would be in little fear of being
discovered by the emissaries whom Ahab sent in every direction to
seek for him. Whether it was the Wady Kelt,[617] or the Wady el
Jabis,[618] or the Ain Fusail,[619] we know the exact characteristics
of the scene. On either side, deep, winding and precipitous, rise the
steep walls of rock, full of tropic foliage, among which are
conspicuous the small dark green leaves and stiff thorns of the nubk.
Far below the summit of the ravine, marking its almost imperceptible
thread of water by the brighter green of the herbage, and protected
by masses of dewy leaves from the fierce power of evaporation, the
hidden torrent preserves its life in all but the most long-continued
periods of drought. In such a scene Elijah was absolutely safe.
Whenever danger approached he could hide himself in some fissure
or cavern of the beetling crags where the wild birds have their nest,
or sit motionless under the dense screen of interlacing boughs. The
wildness and almost terror of his surroundings harmonised with his
stern and fearless spirit. A spirit like his would rejoice in the
unapproachable solitude, communing with God alike when the sun
flamed in the zenith and when the midnight hung over him with all
its stars.
The needs of an Oriental—particularly of an ascetic Bedawy prophet
—are small as those of the simplest hermit. Water and a few dates
often suffice him for days together. Elijah drank of the brook, and
God "had commanded the ravens to feed him there." The shy, wild,
unclean birds[620] "brought him"—so the old prophetic narrative tells
us—"bread and flesh in the morning, and bread and flesh in the
evening." We may remark in passing, that flesh twice a day or even
once a day, if with Josephus we read "bread in the morning and
flesh in the evening," is no part of an Arab's ordinary food. It is
regarded by him as wholly needless, and indeed as an exceptional
indulgence. The double meal of flesh does not resemble the simple
diet of bread and water on which the Prophet lived afterwards at
Sarepta. Are we or are we not to take this as a literal fact? Here we
are face to face with a plain question to which I should deem it
infamous to give a false or a prevaricating answer.
Before giving it, let us clear the ground. First of all, it is a question
which can only be answered by serious criticism. Assertion can add
nothing to it, and is not worth the breath with which it is uttered.
The anathemas of obsolete and a priori dogmatism against those
who cannot take the statement as simple fact do not weigh so much
as a dead autumn leaf in the minds of any thoughtful men.
Some holy but uninstructed soul may say, "It stands on the sacred
page: why should you not understand it literally?" It might be
sufficient to answer, Because there are many utterances on the
sacred page which are purely poetic or metaphorical. "The eye that
mocketh at his father, and despiseth to obey his mother, the ravens
of the brook shall pick it out, and the young vultures shall eat it."
[621] The statement looks prosaic and positive enough, but what
human being ever took it literally? "Curse not the king—for a bird of
the air shall carry the voice, and that which hath wings shall tell the
matter." Who does not see at once that the words are poetic and
metaphorical? "Where their worm dieth not, and their fire is not
quenched." How many educated Christians can assert that they
believe that the unredeemed will be eaten for ever by literal worms
in endless flames? The man who pretends that he is obliged to
understand literally the countless Scriptural metaphors involved in an
Eastern language of which nearly every word is a pictorial metaphor,
only shows himself incompetent to pronounce an opinion on subjects
connected with history, literature, or religious criticism.
Is it then out of dislike to the supernatural, or disbelief in its
occurrence, that the best critics decline to take the statement
literally?
Not at all. Most Christians have not the smallest difficulty in
accepting the supernatural. If they believe in the stupendous
miracles of the Incarnation and the Resurrection, what possible
difficulty could they have in accepting any other event merely on the
ground that it is miraculous? To many Christians all life seems to be
one incessant miracle. Disbelieving that any force less than the fiat
of God could have thrilled into inorganic matter the germs of
vegetable and still more of animal life; believing that their own life is
supernatural, and that they are preserved as they were created by
endless cycles of ever-recurrent miracles; believing that the whole
spiritual life is supernatural in its every characteristic; they have not
the slightest unwillingness to believe a miracle when any real
evidence can be adduced for it. They accept, without the smallest
misgiving, the miracles of Jesus Christ our Lord, radiating as ordinary
works from His Divine nature, performed in the full blaze of history,
attested by hundredfold contemporary evidence, leading to results of
world-wide and eternal significance—miracles which were, so to
speak, natural, normal, and necessary, and of which each revealed
some deep moral or spiritual truth. But if miracles can only rest on
evidence, the dullest and least instructed mind can see that the
evidence for this and for some other miracles in this narrative stands
on a wholly different footing. Taken apart from dogmatic assertions
which are themselves unproven or disproved, the evidence that
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