Property rights could spell Vietnam Communist Party’s downfall

In Civilization: The West and the Rest, historian Niall Ferguson poses an interesting question. Why, in the 17th century, did the English colonies of North America become more economically successful and politically stable than the Spanish colonies of South America formed almost a century earlier?

The answer lies in Ferguson’s notion of why Europe has dominated global affairs for the last few centuries – and why Asian nations are on the ascendancy today. This is his theory of the so-called “killer apps.” These include the scientific revolution; a strong work ethic; the dominance of capitalism that furthered competition, including over distant lands; and the development of a consumerist society that guaranteed financial expansion.

For Ferguson, all of the above “killer apps” have now been replicated in other parts of the world, which goes to explain the rise of China, as well as the likes Vietnam and Indonesia. But the one that many Asian nations, especially those lingering under socialist pretenses, have yet to replicate is that of property rights.

This, returning to the opening paragraph, was the reason Ferguson gave for why British North America was so dominant over Spanish South America. Land in the south was almost exclusively controlled by either the monarchy or elites, which meant it remained under authoritarian control. In the north, meanwhile, land rights were freely shared among most of society, which created and required a government based on rule of law. What follows then is a Lockean view of progress: With expanded property rights came the need for rule of law. And to enforce rule of law came representational democracy and an independent judiciary.

If we look at Vietnam today, it has readily adopted all the other “killer apps” but not property rights, which could be the ruling Communist Party’s downfall. The nationwide protests of June 10, which an independent Vietnamese journalist described as “one of the most historic days in [Vietnam’s] postwar history,” came about because of property rights.

The Communist Party wanted to introduce three new special economic zones (SEZs) in which foreign enterprises could lease land for up to 99 years. Given the closeness of one of these SEZs to the China border, and the historic anti-China sentiment in Vietnam, it was no surprise that many people felt the Communist Party was selling Vietnamese land to the highest Chinese bidder.

Ordinary people protested accordingly, claiming it was their right, not the party’s, to decide what happens to the country’s land. They won; the government has delayed debating this legislation until later in the year.

Less obvious, but just as important, are the numerous land-rights protests witnessed in recent years, many of which continue. One of the largest came to a head in April 2017 when a years-long dispute by residents of Dong Tam, a village near Hanoi, against the military’s confiscation of their land turned ugly.

Authorities arrested dozens of demonstrators before the protesters fought back, holding police officers hostage for almost a week. But so strong was the furor unleashed on social media (and even in state-run media) that the government eventually capitulated, pledging to reinvestigate their complaint and releasing all the protesters, even those who fought back against the police.

Last year, The Economist correctly defined Vietnam’s endless battles over land as “the primary cause of complaints in the country and one of the ruling Communist Party’s biggest headaches.” Among the numerous battles over land rights is the question of acquisition. The Communist Party says that, by default, all land belongs to the state, though its grants some people the right to “own” their land through leases.

But when the party wants to retake this land forcibly, either for itself or to sell to developers, it normally offers lower than market-rate compensation, which occupants cannot independently contest through the party-controlled courts. Often, the party imposes such reacquisitions through force, leading to many tenants being relocated elsewhere.

Growing numbers of activists argue that all Vietnamese land belongs to the Vietnamese people, not the Communist Party, and that the people must have a greater say over what happens to it in order to prevent future environmental disasters

It doesn’t help that many developers pay off local officials for assistance, nor technical complications in land administration. Equally important is that in a many cases those affected by acquisition are the Communist Party’s rural base, which further alienates its longtime supporters.

Important, too, is the rise of environmental activism, especially since the Formosa protests of 2016. In contrast to the current situation, growing numbers of activists argue that all Vietnamese land belongs to the Vietnamese people, not the Communist Party, and that the people must have a greater say over what happens to it in order to prevent future environmental disasters. After all, dam building is choking the Mekong Delta, smog suffocates Hanoi for much of the year, and parts of Ho Chi Minh City could be underwater by the end of the century.

Some changes have been enacted. A 2013 land law didn’t recognize private ownership but did extend the leases of many plots for another 50 years. Still, this doesn’t seem to have done any good, and many analysts think land-rights protests will continue to plague the Communist Party in the coming years.

But if the party wants to prevent all of this, it will have to dismantle its own monopoly of power. First, it may have to accept that land can actually be owned by individuals without state interference. Second, to  settle disputes between land owners and developers properly, including government-backed ones, it requires an independent judiciary to decide over these cases. But that would mean the party has to loosen its dominance over the judiciary, something that would certainly curtail its ability to enforce its own laws. If this happens, why not representational democracy as well?

Much like the Spanish colonies of South America in the past, Vietnam is likely to suffer economically because of the lack of property rights. This is not to say that none of those colonies were prosperous; some were. But in the long run they were dominated by the northern economies where property rights were enjoyed by most in society.

Just the same, this isn’t to say that Vietnam won’t experience economic growth; it is, at an average of 6.5% in recent years. But it could be growing faster with property rights and, without them, the ruling Communist Party could come up against insurmountable problems.