Vietnam eager to learn capitalism’s lessons

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Outside the Hanoi School of Business, a man in a tatty khaki uniform insists on “ordering” a taxi on his mobile. When a taxi stops, he shouts: “Here it is!” and demands payment.

One has to admire his chutzpah although, since his efforts went unrewarded, his business plan may need refining.

There is no doubting the entrepreneurial spirit in a country that appears to be tumbling into lusty free market capitalism, albeit with an ostensibly communist government attempting to keep hold of the reins. But most of its budding tycoons must learn to ride the opportunities that are rapidly opening up.

They would wish it otherwise. Inside the Hanoi School of Business, middle- aged graduates are gearing up for their part-time Executive MBA programme. They are shy about revealing their names, let alone their ambitions. “I’m here to learn the latest management techniques, obviously,” says one.

The stern faces of these men and woman, some running corporations that employ thousands, signal their desire to get a grip on a fluid, unmediated world.

“The demand for business education is phenomenal. Our directors have experience and spirit – they just need the tools,” says Ha Nguyen, head of academics at Hanoi Business School.

There is no mystery why the Vietnamese are novices in modern business. Historically, cynics quip, an agrarian economy has been successively controlled by court mandarins, Corsicans, black-marketeers and communist apparatchiks.

The government, mindful of the 1m Vietnamese who join the job market every year, is opening up to globalisation with a convert’s earnestness. Officials talk of Singaporean levels of sophistication as their target. Foreign business schools are eager to help (and to make money) yet, with a few exceptions, have gained little more than a foothold.

Flaunt partnerships

The education establishment still clings to many Soviet-era practices and remains suspicious of outsiders. Many universities offer mediocre degrees, taught by out-of-touch professors, using obsolete textbooks. Academic bribery is rife and ordinary Vietnamese consequently distrust domestic paper qualifications.

Not surprisingly, Vietnamese business schools go to some trouble to flaunt any partnerships with foreign institutions, of which there are about 10 significant ones.

The National University of Vietnam’s Hanoi School of Business opened in 1995 following the abandonment of Stalinist state planning in the 1980s. It is autonomous, separately funded and reports only to the rector, who reports to the prime minister.

Tuck School of Business at Dartmouth in the US supplied the curricula as well as lecturers. Hanoi’s EMBA is a partnership with the University of Hawaii and the school claims its graduates “manage” a quarter of the country’s gross domestic product.

All schools seem to have difficulty finding decent faculty because so few Vietnamese business professors have “matured” sufficiently and because overseas faculty tend to avoid jobs that pay the equivalent of a few good meals in New York.

Vietnam produces about 3,000 MBAs a year but the quality varies sharply.

The National Economic University’s Business School remains firmly embedded in the official university system but boasts a score of “international partners”, including the Swedish development agency and Swinburne University of Technology in Australia. The university produces 800 masters degrees a year, about 20 per cent being MBAs in English or Vietnamese.

All business schools are required to teach Marxist-Leninist philosophy, which they appear to regard as an increasingly tedious chore. When a group of MBA lecturers at the National Economics University were asked what kind of business education was best, they automatically chanted “American!”

And yet in a singular, evolving environment the standard business case studies have limited efficacy, forcing business schools to produce their own. Many are thin efforts, resembling the narratives beloved of Vietnamese newspapers.

Expanding economy

The government recently published a reform agenda that foresees a huge jump in the quantity and quality of higher education by 2020, with more private education, more autonomy, more research and more foreign engagement. It is sorely needed: barely a 10th of Vietnamese wanting higher education actually get into college. But the reform plan is hazy on how Vietnamese students, who earn an average of $600 a year, will pay for this education.

However, the economy is continuing to expand at rates of close to 10 per cent a year. “We are going to feel more and more pain if quality people do not start coming down the pipeline soon,” says Hoang Thanh Duong, a senior associate with VinaCapital, the country’s leading finance company.

The National Economics University recently put on ice its online Henley Management College MBA (with local support) because few ordinary Vietnamese could afford a course that soaks up a decade’s worth of a junior manager’s salary.

“The sons and daughters of the new rich elite or party members can get good qualifications; the rest are struggling,” says Mark Ashwill, the Vietnam representative of the Institute of International Education, a non-
governmental organisation that promotes education exchanges.

The result is a boom time for charlatans offering to help ordinary Vietnamese make sense of the new economy, he says. “People will spend several months’ salary on a fancy foreign name but they end up with a worthless piece of paper from some diploma mill,” he says.

Exceptionally, the Royal Melbourne Institute of Technology was invited to set up an entirely autonomous campus in Vietnam, offering management and technology degrees identical to those in Australia.

It has 1,500 students, five years after opening. At $13,000 its MBA might appear wildly expensive, but RMIT’s Vietnam president, Michael Mann, believes explosive demand is in the offing. “When an economy is rising as quickly as this, there are tremendous opportunities being opened up for trained entrepreneurs. More and more people will realise that an MBA is an investment, not a cost,” he says.

RMIT’s existence in Vietnam should give hope to other foreign business schools, although Mr Mann suggests that a similar greenfield investment now might cost $100m for an investor prepared to jump through bureaucratic hoops. “We love it here but it is not easy and it takes time.”

The authorities are aware of the challenges but appear determined to approach globalisation by their own path. Nevertheless, common sense suggests the business education market will become more open. The expert consensus is that Vietnam is a country to watch.

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