Friday, April 27, 2012

How Do We Square the Differences?





I saw both of these things in Saigon last week. The first picture is the interior of a Maybach 62S. Nice car I thought. I had never seen or heard of a Maybach but it looked so over the top I had to look it up. I discovered that it is a luxury car built in Germany with a base sticker price of $423,500. The price is double that in Vietnam because of the import tax. Two well dressed older women got in the back seat and drove away. Easy come, easy go.

I took the other picture just outside my office. I had watched this guy for a week or so before figuring out that this was his home. I couldn't reconcile the two things in my mind - the absolute luxury of the Maybach and the almost unbearable poverty and hardship of the sleeping man's situation.

We talk a lot about income inequality in the US these days. In fact, Occupy Wall Street has spent a lot of time drawing attention to it, but when you see it in a developing country it's obscene. The recent scandal in China is drawing attention to it as well. "From each according to his ability, to each according to his need." I wonder how Marx would react to the abuses of state socialism if he could see the situation in Vietnam and China today?

Vietnam and China are changing, and with the economic boom comes the creation of wealth and the "need" to display it. Earlier this month I attended a party to celebrate the launch of the 2012 Porsche 911. It was all glitz and formal dress, champagne and a sea of beautiful models. My friend, Kaci, is the marketing director for Porsche and her targets are the newly rich Vietnamese. She told me it would be crazy for a foreigner to buy a Porsche in Vietnam. The price is double what it is in the developed world. There is only one reason to buy a Porsche or a Maybach in Vietnam - to show everyone that you're successful and have the money to buy one. If it's crazy for a foreigner to buy one it is equally crazy for a Vietnamese. There is nowhere in Saigon and probably nowhere in Vietnam where the Porsche could get out of second or third gear. The traffic moves at a snail's pace, rarely more than 20 miles an hour. But, Porsche expects to have reasonable success in Vietnam this year. I'm sure they're right.

I'd like to think that the Golden Rule is alive and well in emerging economies, but Wall Street is still fouling it's own nest and Congress, in the richest county in the world, can't agree to the proposition that we can afford to provide health care for all of our citizens. If we can't set an example then how can we expect the rest of the world to do the right thing?

Saturday, April 21, 2012

Another Global Encounter

The emblem, flag, and mascot on the left belong to Gamba Osaka an Asian Football League team from Japan. I'd never heard of Gamba until Tuesday morning. It looks like pretty good team from what I can tell, but that's not where this is going.

On Wednesday morning Marilynn and I were working on our laptops in the airline lounge at the Incheon airport in Korea when a striking looking Japanese businessman approached us. I say striking because, although normal in all other respects this man was wearing a bizarre, royal blue, plastic, stovepipe hat with Gamba Osaka written in large letters above the logo. I can't do justice to the experience. Here is a nice looking middle aged businessman in a goofy looking hat approaching two American strangers. I only wish I had a picture of Mr. Gamba Osaka.

Mr. Gamba never told us his name or why he picked us out. We think he just wanted to practice his English, but he knelt down next to our table and asked us where we were from. His English was very simple, but he made me wish that I had the same courage to approach strangers in their own languages with the same confidence as Mr. Gamba. Some of our most memorable encounters have been with total strangers in odd places in a mixture of languages. In this case, after ascertaining that we were from the US he proceeded to tell us that he was from Osaka and that Gamba was his team. "Football is my life" he said. "I am traveling to Tashkent, Uzbekistan to see Gamba play the Uzbek champions, Bunyodkor." How bizarre; but it was clear that he loved his team and would go to great lengths to show his support. I checked the internet this morning and discovered that the Uzbeks overpowered Gamba 3-2. There was even a YouTube video of the goals scored. It looked like a very nice day in Tashkent and there were a lot of empty seats in the stadium. I hope Mr. Gamba had a good time. It's a long way to go to see your team get its ass kicked.

We didn't have a lot to say to each other. Mr. Gamba had been to LA and New York a few years ago, and he was surprised and pleased that I had been to Japan and liked it very much. When he found out that we were from Seattle he wanted to know all about Ichiro Suzuki, the Mariner's superstar from Japan. Did we know him? No, but we assured him we loved to watch him play and we were sorry that such a great player had to endure such a crappy team for his entire career in America. He felt sorry for us that the US didn't have a good men's soccer team "but the girls are very good - the best in the world, maybe." I didn't want to spoil it by reminding him that the US and Japan have had about the same results in the last two World Cups and both made it to the Round of 16 in 2010.

After about 20 minutes kneeling by our table Mr. Gamba stood up and said goodbye. We wished him and his team success in Uzbekistan and he wished us safe travels home. As he walked away another Japanese businessman seated nearby looked over at us and smiled as if to say "You never know who you'll meet in an airline lounge, but the world is getting smaller every day."

Friday, April 20, 2012

Gordon Gekko Nguyen?

Remember Gordon Gekko, the Michael Douglas character in Oliver Stone's Wall Street? He's the one who proclaimed that "greed is good" at a shareholder meeting. Wall Street hasn't changed much since the 1987 film. Those nice folks who brought you the sub-prime housing crisis, the Great Recession, the too big to fail bailouts, and the obscene bonuses are still bilking all of us. America is still run by the fat cats and special interests. So is Vietnam and cynically "greed is good" could also be the national tagline in Vietnam. The cynical view doesn't take into account the incredible industry of the people, their positive outlook on life, or their willingness to sacrifice their own welfare for the welfare and education of their children. But, greed and corruption are huge problems in the country and in some ways seem to be driving the culture. It used to be unmentionable but recently it's more and more a topic of concern and conversation along with the Bo Xilai corruption scandal in China.

Every economist who discusses the business forecast for Vietnam mentions corruption and infrastructure as two of the major obstacles to growth. They go hand in hand. Every major construction project is fraught with corruption from the permitting process to the substitution of materials. Everyone takes a piece of the pie and the final product is often delayed and inferior. In 2007 we rode our bicycles from Saigon to Hanoi. There was one national highway, Highway 1, connecting the two largest cities in the country. Most of the way it is two lanes and all of the commerce north and south takes place on it. In 2005 Sandy Northrop, an American journalist and filmmaker, released a three part video series on Vietnam and Part One included a report on a second highway being built to handle north south traffic. Sandy's video said the new highway would be completed by 2007. It is now 2012 and I haven't heard or seen anything about the second highway in the last three years. My guess is that it has become so costly because of corruption that it's completely stalled and may not make sense any more.

I have an Australian friend who runs a logistics company that moves freight around the country. He told me that his company has a line item, a big line item, in its budget for bribes his drivers have to pay in order to get from A to B on the highway. Another friend in the know told me that the police have to pay the government to get exclusive rights to a section of Highway 1. The buy-in is three years salary but the payoff is enormous. Every time he stops a truck he gets 500,000VND ($25USD). An average day or night is worth about $800USD, and that's just for his section of the highway. The driver has to travel 1500 miles. Imagine.

I had dinner at a British friend's house last year and he pointed out the houses on either side of his in an exclusive gated compound in District 2. His neighbors, he also pointed out, were both local police officers. Real estate in this neighborhood is not cheap. Most of the villas in the compound are in the million dollar range. Not easy on a government salary of $300-500 a month.

On the local level, it's fascinating to watch what happens when a policeman pulls over a motorbike. There is a short conversation. I'm imagining a lecture on safe driving or mechanical soundness. Then the officer asks for the driver's papers which are tendered but include 200,000VND neatly folded between the pages. The papers are scrutinized and returned with a stern warning and both drive off. Transaction complete.

My own experience is limited, but on returning to Vietnam last month I had a small visa problem. Mine was issued in San Francisco with the wrong expiration date, a date that was earlier than my intended return date. I had a copy of the email with the correct dates and was told by the Vietnamese consulate in San Francisco that with my email confirmation it would be corrected on arrival in Saigon. It was corrected but not before the first immigration officer asked me for $50 to fix it. I pointed out that I had already paid for the visa and that the consulate had made the mistake. He did not have the stamp to make the official change, so he reluctantly took me over to another immigration line where I was told it could be done for $10. I saw the handwriting, so to speak, and rather than wait an hour for the process to work I handed over the $10 in order to speed the process up. No receipt was given but I did get the visa fixed and went on my merry way.

It's easy to get discouraged, and doing business in Vietnam can be a sordid affair. On the other hand, America has a formalized and codified brand of corruption. It's called lobbying and it's corrupting Congress and preventing the legislative branch of government from acting in the national interest. If 75% of Americans believe we should have universal health care and that banks should be closely regulated to prevent another financial crisis how can we explain to to the world that Republicans are vowing to repeal the healthcare law and stonewall financial reform if they win in November? Are those things in the national interest? I have a hard time seeing how either America or Vietnam are going to fix themselves, but I think I have more confidence that Vietnam can do it than I think America can. How's that for the cynical view?

Tuesday, April 17, 2012

Like Bali or Goa 30 Years Ago

I've missed a few chances over the years to be in the first wave of travelers to "discover" a place before the hordes arrive. In the 70's I had a ticket to Bali but decided to trek in Nepal instead.

Nepal was amazing but I felt I had missed its "undiscovered" phase. Others had been there when it was even less civilized. As it turns out I'm glad I chose Nepal. For 23 days a friend and I walked from Pokhara to the Tibetan border, from Mansalu and Dhaulagiri to the Mustang area. It was unspoiled and the only other Westerner we saw in those 23 days was a German woman I knew from Berlin. But, I'm a beach rat and I always regretted not seeing Bali, Goa, and the Seychelles in those days.

Last week we took four days off to visit Phu Quoc the largest of the Vietnamese islands. It's a 40 minute flight south from Ho Chi Minh City on Air Mekong, which as a matter of interest and security contracts with Delta's commuter airline SkyWest for its cockpit crews. All of Vietnam's islands have been subjects of territorial dispute. Phu Quoc is no exception. It lies just 12km south of Cambodia in the Gulf of Thailand. Cambodia claimed it. The French colonized it, and Vietnamese fishermen and farmers settled it. It's physically closer to Cambodia than it is to Vietnam but in the French, Cambodian, Vietnamese tug of wars it ended up under Vietnamese control - mostly because the Vietnamese settlers had a numerical advantage. Until tourism started to gel it was known for pepper and fish sauce. It's local fame comes from the its reputation as the source of the Vietnam's finest fish sauce, that ubiquitous add-on made from anchovies and served with almost everything from pork to pizza. Those two products are still important but tourism is overtaking them in importance to the local economy.

During the various wars that raged in the 20th Century a small island off the south tip of Phu Quoc housed a notorious prison. It was not as infamous as the tiger cage prison on the island of Con Dao, but the treatment of prisoners was the same. During the "American War" the prison's inmates were Viet Cong insurgents and supporters of Ho Chi Minh.

Phu Quoc has now been discovered. It's a favorite destination for people living in Vietnam and it's drawing more and more European travelers. Washington State's Governor, Christine Gregoire, stayed here after her trade mission to Vietnam in 2010 but most Americans still haven't found it. We only saw one other American couple during our stay. What is cool is that the island is very much like Bali and Goa were 30 or 40 years ago. There are a couple of luxury resorts. La Veranda (the second photo) is only 5 years old, but it is built in the style of the French Colonial villas of the past. I felt like we were stepping back in time. Graham Greene would have been comfortable with a G&T at the bar. But, if you step out onto the beach and walk 100' in either direction you find another less luxurious but very vibrant island. You can still find a bungalow for $20-30. You can eat fresh seafood and quaff a frosty Tiger at a rickety wooden table on the sand. You can be massaged for an hour in the sun for $4 or get a manicure for $2. Sure, the hygiene standards might not include auto-claved instruments but the experience can't be found many other places these days. The water is clear and it's hotter than hell. This is April and Phu Quoc is 10 degrees north of the equator. We're nearing the end of the dry season and you can almost feel the approaching rainy season. I love the sun but even I can't take more than a few minutes of direct sun. It's a scorcher. Great for afternoon naps in the tile-floored rooms with ceiling fans and mosquito nets (La Veranda has A/C; Goa didn't).

We have stayed in eleven Vietnamese beach resorts over the last 5 year. Phu Quoc is one that I would happily revisit. I didn't discover it, but I like to think I got to see it before it became wall to wall luxury hotels like China Beach.

Wednesday, April 4, 2012

Living Vertically

In 2007 I learned that 60% of Vietnam's population was born after 1975. That's when the "American" war ended and Vietnam's reproductive juices got going again. Five years later my guess is that the number is closer to 70%. There are kids and young adults everywhere. Tu Du Pediatric Hospital in Saigon sees 50,000 new babies every year. One hospital - 50,000 babies every year. So, what am I thinking? Well, sooner or later all those babies will get old and when they do they will find out that life is difficult when they can't climb stairs, step over curbs or get their wheelchairs in and out of a bathroom or restaurant. I'm not there but I know what the future looks like. America has the(ADA) Americans with Disabilities Act to help make life easier for disabled people. Vietnam has nothing like it.

Here's the issue: In Saigon, people live vertically. There are stairs and stairways everywhere. There are very few elevators or escalators. I climb three flights of stairs to get to one of my favorite restaurants. It's rare to find one that doesn't have at least one flight of stairs. The buildings here are tall and narrow. The stairways twist vertiginously up up up. There are a few wheelchair ramps in the best Vietnamese resorts but virtually none in Saigon. The Nam Hai, one of the most luxurious resorts in the world, is a minefield of ledges, steps, and drop offs. Even the young and fit stumble and trip there. My guess is that it couldn't be built anywhere else in any developed country because they couldn't find a company to write the liability insurance.

Last night I had dinner in an outdoor restaurant. Across the street was a very nice hotel. I counted 33 steep stairs going from the street to the lobby. It is the only way in. So... if the arriving guest gets lucky and finds a bellman to carry his or her luggage up to the lobby he still has to negotiate those 33 stairs without a railing.

In two other restaurants I like, the kitchen is on the ground floor and dining areas are on floors 2, 3 and 4. The wait staff has to hump it up three flights to get the food to the customer and then one, two, three flights down to clear the tables. They do it happily. They really don't think much about it. That's the way it is, but I'm thinking about those old professional waiters in France and Germany. They couldn't do it. In 20 or 30 years when the population starts to have knee and hip problems, so will the wait staff and the customers. You see it already with a lot of people who can't manage the steep, narrow, curving stairways without banisters or handrails. Yikes!

I owned a restaurant once and I grumbled when I had to install a handicapped bathroom. Our total space was just 1000 square feet. The restroom took up about 10% of the total. Once it was in I forgot about it, and although it got very little use from wheelchair customers it was the right thing to do. Vietnam isn't there, but it will have to deal with stairways, curbs and bathrooms in the future. Until then, just think about the exercise value of living vertically - while you still can.

Sunday, April 1, 2012

Risk Management

Howard Hughes was afraid of germs (and so is my wife). His fear drove him to extremes. Sometimes I think it's doing the same to her. Living in Saigon, I think she has better reasons but he wouldn't touch doorknobs and eventually he removed himself, as much as possible, from all human contact. He was managing risk. He was a nut case, but we all do it to one degree or another.

For a Western expatriate, Saigon can be a challenge in risk management. Yesterday, a friend told Marilynn that she was surprised and appalled to find out that her house cleaner was "cleaning" all the surfaces in her bathroom with water from the toilet. A less extreme case was our discovery that our household help was washing all the dishes with cold water. That is more understandable when you know that most Vietnamese houses don't have hot water. Cold water is the only kind available so naturally everything, clothes, dishes, and bodies are washed with cold water. Even when we told her to use hot water for the dishes she had a hard time complying because she said it burned her hands. She didn't perceive any risk from bacteria and she thought it was too expensive to use hot water. Sidewalk food vendors have a bucket of water that they use to wash dishes and utensils. They use the same water for hours. It may not be the food that gives you stomach cramps. It could be the dish it's served on.

Newcomers to Vietnam are advised not to eat uncooked fruits and vegetables. Human and animal waste is used for fertilizer and the luscious looking greens provided for your Pho might not be so luscious 6 hours later. After awhile you begin to know which restaurants are safe and can be counted on to wash their vegetables. Vegy is the name of the product used to insure their cleanliness. When asked most people will tell you that everyone gets sick occasionally. You do build up immunity over time, but no Westerner would drink water from the tap. I have been lucky and eat almost everything except fresh greens from street vendors. Marilynn has been less fortunate and doesn't even brush her teeth with tap water.

Multinational companies almost uniformly forbid their expat employees from driving a car or riding ON a motorbike. At the top level they provide a car and driver; at lower levels they pay for taxis. It's another risk management strategy. It makes sense. I see a motorbike accident almost every day. With 10 million people and almost as many motorbikes the streets are chaotic and the traffic rules unclear. Motorbikes use the sidewalks, drive up one way streets the wrong direction or two-way streets on the wrong side. Taxis make U-turns on the busiest streets in town and red lights are only cautionary.

Crime is another issue and a difficult one to risk manage. At first, we were relieved to know that there is almost no violent crime in Vietnam - no guns. On the other hand there is plenty of petty street crime, mostly purse snatching, so the risk management strategy is to be alert, walk close to buildings and not close to the curb, and to carry your purse or laptop on the inside not the street side of the sidewalk. Nothing is perfect, however, and last week we heard a story from a friend who had her purse snatched while walking in the middle between her boyfriend and another friend. The thief got away with the goods and when the three of them went to the police they were told to forget it. Our friends, who are fluent in Vietnamese, using the Find My Phone app, showed the police exactly (within 13 feet) where her phone was - in a used mobile phone shop. The police again refused to help. I have another blog post about the police, but Marilynn is afraid I will get run out of the country before our planned departure. Watch for the blog later in the month.