SINGAPORE – April 30 marked the 40th anniversary of the reunification of North and South Vietnam, and the end of one of the longest wars in contemporary history. Vietnam has come a long way since. Today it is listed highly by various economic assessments and predictions as the next tiger of Asia; a country with the fastest growing middle class in Southeast Asia and also as home for the fastest growing number of ultra-rich. Optimistic estimates place Vietnam as the world’s 8th fastest growing economy by 2050.
The Doi Moi reforms, introduced in 1986, created opportunities for economic growth, resulting in average 7 percent growth in its gross domestic product over the past decade, a remarkable achievement outnumbered only by China and India.
According to some estimates, Vietnam has the fastest growing middle class in Southeast Asia. In 2012, the middle class population was 12 million and is projected to increase to 33 million by 2020. In a population forecast to reach 97 million by 2020, approximately one-third of Vietnam’s citizens will be defined as “middle class.” It is forecast that the middle class will drive more than 50 percent of country’s total consumption. Considering the prevailing tendency of rural-urban migration, the growth of this middle class is likely to exceed such estimates.
Four decades after the unification of the North and South’s different political, economic and social systems, the issue of class seems to be silently reemerging. After four decades under a unified classless system, the nation appears to experience growing class divisions. The diversification of classes is visible in practice rather than in formal recognition, through private ownership, consumption patterns and lifestyles. The country’s increasingly stratified society with its distinctive socio-economic manifestations is a living proof that the socialist ideology no longer has application in contemporary Vietnam.
Despite the fast growth of what is considered to be the middle class in urban areas of Vietnam, a sense of class maturity, unity and identity has yet to develop and consolidate. As this emerging group will have a determining effect on the country’s social stability, it is critical to comprehend first its characteristics, preferences and concerns.
Defining the middle class in Vietnam remains challenging on a number of levels. The colonial period created a stratum of professionals in urban areas who have adopted a “modern” lifestyle that entails education (mainly abroad) and a sense of distinctiveness in their values and tastes. However, the dominance of socialism targeted the upper and middle classes (petite bourgeoisie). Communist ideology introduced collectivization and decried private wealth and ownership for equality. Socialism triggered a large-scale downward shift in social status for the urban middle class, who lost their wealth and private possessions.
“New money” is, of course, a crucial element and determines consumption power. Those who belong to the expanding middle class have benefited from the country’s transformation into “market socialism,” and have adjusted to modern consumerist lifestyles by adopting global trends.
Consumerism is an important indicator of middle class status in contemporary Vietnam. Having experienced the scarcity of basic products in the pre-Doi Moi era, the abundance of products and goods available today is not only associated with material comfort but also with the freedom to express one’s identity through consumption.
Getting rich, or having opportunities for doing so, has not been the case for everyone in Vietnam. As is the case with changes in any system, there are winners and losers. Many Vietnamese were left behind the development curve and experienced downward movement. Marginalized groups, including residents in remote areas where there are no investment projects, ethnic minorities or former supporters of the defeated South who did not manage to migrate abroad. While overall the country can boast about substantial development, it is also struggling with widening gaps and inequalities.
Four decades after reunification under a communist regime, despite, or in tandem with, the contradictions within Vietnam’s political ideology, the middle class and its consumption power is reinforcing the country’s re-orientation toward a market economy.
Vietnam’s middle class is still under construction, but its reemergence cannot be denied. Although the middle class is still a minority in a population of 90 million and in an early stage of development — or revival — the reality consisting of well-educated, globally connected property owners will present quite a different environment for the ruling regime than the postwar’s trauma and poverty-stricken citizens.
Huong Le Thu is a visiting fellow at the Institute of Southeast Asian Studies (ISEAS) Singapore. Her research interests include Vietnam’s political and social changes, Vietnam-China relations and transnational migration. Her current project examines the emerging middle class in urban Vietnam.
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