BY THI LAM, PACIFIC NEWS SERVICE
EDITOR'S NOTE: Long the backbone of support for Vietnam's communist rulers, peasants are now staging violent protests in some areas of the country. The threat of rural unrest may finally force Hanoi to rethink its strategies and follow the lead of its long-time ally China. PNS commentator Thi Lam, a former army general in the Republic of South Vietnam and author of "Autopsy: The Death of South Vietnam," is working on his memoirs.
SAN JOSE, CA -- Luckily for Vietnam's rulers, no one had to deliver a State of the Nation address when the National Assembly convened in Hanoi late last month. The news is so bleak that the leadership may have to rethink its current policies or risk provoking a rural uprising.

After a decade of "doi moi" (or "economic renovation"), the economy is in serious disarray, plagued by a huge bureaucracy, rampant corruption and money-losing state enterprises. The currency chaos that swept Southeast Asia in the last few months has compounded problems caused by a mass exodus of foreign investments and a property glut. According to Vietnam's official news agency, exports are down and industrial production has fallen off-target.

For the 450 delegates attending the first open session of the Assembly, however, the real worries are social, not economic. Urban crime and violence are up, but way more significant is the mounting unrest in the countryside, long the backbone of Vietnam's communist revolution.

Last February, hundreds of peasants from Kim No, a village on the outskirts of Hanoi, openly battled security forces after local party officials sold off village land to a South Korean conglomerate planning to develop a golf course. According to reports from residents smuggled out of Vietnam, the officials pocketed the proceeds.

The Kim No incident paled in the face of violent protests since May by residents of Thai Binh province, 50 miles southeast of Hanoi. The Foreign Ministry played down the unrest claiming it was caused by "discontented elements and those harboring private disagreements." But Reuters on August 6 reported that 3,000 farmers from neighboring villages converged on the city of Thai Binh to protest new taxes and corruption by local officials. Thoi Bao and Xay Dung, two Vietnamese-language publications based in San Jose, Ca., reported that the farmers, led by decorated veterans, even arrested local party officials and razed their homes. Other unconfirmed reports suggest that the protest movement has spread to three neighboring provinces.

Vietnam watchers attribute peasant unrest to worsening economic conditions in the rural areas. Farmers in one province near Thai Binh reportedly have to pay eight types of taxes to the central government and make six contributions to local officials. Meanwhile, the income gap between urban dwellers and rural residents is widening. The average annual income per head in Ho Chi Minh City is estimated to be around US$1,000, while it is stuck at about US$50 in places like Thai Binh.

Peasant discontent also stems from the unfair way the government has implemented its agrarian reforms. In 1988, the government deactivated the country's inefficient state cooperatives and distributed lands to peasants to encourage production. However, local party officials took the most productive lands for their families. In some instances, district and provincial party officials who were not local residents wound up with the best plots in the village.

Even as Vietnam's leaders have been groping with mounting problems at home, China has been busy dismantling the economic and political model they are so determined to follow. Last month, at President Jiang Zeming's instigation, the 15th Party Congress approved the mass privatization of state enterprises, the underpinnings of China's claims to socialism. And a leading Beijing University professor not only openly advocated drastic political reforms " including a new constitution, presidential elections in 25 years, an independent judiciary " but got away with it.

Vietnamese abroad are eagerly waiting to see whether Vietnam will emulate China's dramatic economic reforms and hints of political liberalization. The country's new leadership is younger, more educated and more pragmatic. One thing is certain: the rulers can not afford to alienate peasants who represent 80 percent of the population and whose support was critical in the country's victorious wars throughout this century.