May 18 - Business and Culture in Hanoi

Tuesday, May 18^th was our last day in Hanoi. Things started early with a trip to PayNet, an internet startup focused on electronic payments, including online and pay-by-mobile phone. In many ways, PayNet looked familiar to an American audience, with a large, young staff sprawled across makeshift offices occupying several floors of a building: the classic dotcom.

Like a US dotcom, they've amassed a variety of funding sources and some early successes, but they also have some challenges a dotcom with a similar focus in wouldn't encounter in the US. Namely, in a country where less than a quarter of the population is "banked" (i.e., has a bank account), getting acceptance of virtual cash transactions is a significant barrier to success. Most transactions in Vietnam are conducted in cash (or, for larger transactions – property, homes, etc. – in gold!). Only recently has government policy started pushing larger companies towards a direct deposit method as part of a broader tax reform policy. While this bodes well for long-term acceptance of electronic payment, it also represents a threat to PayNet, as the new government initiative also puts debit cards in thousands of hands across the country – and creates a direct competitor to PayNet's offering.

After an enjoyable hour at PayNet, we headed out for our next visit, but had an interesting detour along the way. We stopped at the side of Truc Bach Lake, a large, scenic lake in central Hanoi. In October of 1967, the A-4E Skyhawk being piloted by future-Senator John McCain was shot down during a bombing mission, and McCain parachuted into Truc Bach. He was badly injured when ejecting, nearly drowned in the lake, and after being pulled to safety by local Vietnamese he was beaten and bayoneted. The Vietnamese have marked this spot with a memorial detailing McCain's crash, and – if the interpretation we received is correct – taking great pride in capturing him. McCain was prominent at the time as the son of the current Commander-in-Chief of Naval Forces in Europe (and soon to be named to that position in the Pacific) and no doubt a prized prisoner for North Vietnam.

To me, the interesting thing about this marker wasn't that it existed, but that it appeared to be in relatively poor shape. Unlike the pristinely kept monuments to Ho Chi Minh we had seen two days earlier, the McCain marker was surrounded by litter and visibly eroding. There's no doubt the Vietnamese had originally erected this marker as one of pride, but I found myself wondering whether it wasn't inconvenient for them these days, when Senator McCain has played such an important role in normalizing US-Vietnamese relations and Vietnam seems to work hard to downplay the "American War" when working with tourists, business people, and other Americans. I found myself thinking of Nelson's Column, in Montreal. If you've been to Old Montreal, you've seen Nelson's Column, which was erected in 1809 to honor Admiral Horatio Nelson, who died in the Battle of Trafalgar – when a British fleet defeated a French fleet – a century earlier. In the century that had elapsed since the battle, however, England had captured "New France", and there's no doubt that it was at least a little culturally insensitive to put this giant monument to someone who engineered a famous French defeat in the middle of a predominantly French-speaking city. Two hundred years hasn't made the Column any more popular. Today, Nelson's Column looks distinctly unloved, surrounded by a heavy, wrought-iron gate to deter vandals, with weeds growing everywhere and the weather having taken its toll. It's too notable to dismantle, but suggesting that Montreal renovate it would only antagonize local passions. I suspect the McCain marker falls into this category, too, and I wouldn't be surprised to hear that future American tourists find it in an even more degraded state. It's a symbol of Vietnam's past, not their future.

After our stop by the lake, we headed on to the Family Medical Practice, located in a Hanoi neighborhood dominated by diplomats and their families. Founded by an Israeli expatriate over a decade ago and staffed heavily with foreign doctors, FMP provides 24-hour clinic-level medical services in a manner and facility that would look very familiar to someone from the US or Europe. It was a dramatic shift from the hospital we had visited the day before. Not surprisingly, FMP provides services not offered or compensated by the state in Vietnam, and caters primarily to expatriates, their families, and wealthier Vietnamese. They also have a clinic in Ho Chi Minh City that we plan to visit in several days. Anyhow, there was no end to EMBA questions at FMP, and the staff graciously spoke with us for well over an hour about the challenges of practicing and delivering medicine in modern Vietnam. Even with FMP, most persons of means in Vietnam still travel to Singapore for major medical attention. The staff also discussed the challenges of creating and staffing a startup medical service there, and how they might expand to provide more services as Vietnam grows wealthier, making their care more affordable to a broader group of people.

On our way out, we saw a young bride and groom getting their pictures taken on the street!

Next up was lunch, where we had the chance to host and hear from the American Chamber of Commerce in Vietnam, along with representatives from several US companies operating in Vietnam, including MorganStanley, ExxonMobil, and Emerson Electric. The Chamber representatives graciously answered our many questions about doing business in Vietnam today and how it has changed over the last few years. They spoke in depth in a few areas of interest that our sites visits had magnified – most notably infrastructure, corruption, and what it was like to be an expat with a family in Vietnam today.

Our last stop of the day was the Hanoi Stock Exchange. Founded only in the last few years, the HNX (and its sister exchange in Ho Chi Minh City) allows Vietnamese companies to become owned and traded publicly. While only listing several hundred companies today, the exchange has grown quickly, primarily as a way for companies to improve their capital position. EMBA toured the HSE's temporary facilities (their permanent location, across from the Hanoi Opera House, is currently under renovation) and had ample opportunity to learn more about the exchange. While it's a far cry from the NYSE today, HNX is another sign of a rapidly changing economic climate in Vietnam.

We made a last pit-stop at the hotel for an animated debrief of the day's site visits led by Professor Fernando Suarez before heading to the airport and catching an 8:30 PM flight to Ho Chi Minh City. Somewhat to our surprise, the Vietnam National flight was on a well-appointed and staffed Airbus 330, a significantly bigger and more modern flight than the one that had brought so many of us over from Hong Kong a few days earlier. We landed in Ho Chi Minh City 2 hours later, met our tour guides, and boarded our buses for the city. Immediately, we noticed the substantially better (and saner) road networks of the city and its surroundings when compared to what we'd seen in Hanoi.

Fact of the day: "Ho Chi Minh City" refers to a large, expanded metropolitan area, and it's made up of many individual districts. The central district is still called Saigon, but you'll find that most Vietnamese refer to the entire city of Saigon, regardless of what the signage says.

Tomorrow: Touring Saigon

Written by Phil Obbard