Ian Williams  /  NBC News
A Hummer sport utility vehicle competes with mopeds in traffic, in a sign of Vietnam's economic prosperity.
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NBC News
updated 11/18/2006 11:18:00 AM ET 2006-11-18T16:18:00

The waiter dressed in a smart red jacket takes orders on a handheld computer, while beyond the counter, the lattes are being lined up for customers, many of whom are hidden behind their laptop computers, eyes occasionally peering over the screen to check on the progress of the their order.

It could be a scene from a coffee shop anywhere in America, but this is Hanoi of all places, at a new branch of Highland Coffee that’s opened right next door to the old Hanoi Hilton, the notorious wartime prison, in which Senator John McCain was locked up after being shot down over the city. Another famous resident was Pete Peterson, who later went on to become the fist U.S. ambassador to Vietnam after diplomatic relations were reestablished in 1995.

“Everybody told me I was out of my mind. They didn’t believe that I could charge $3 for a cup of coffee and open a hundred shops,” says David Thai, who left Vietnam as a toddler but returned to set up one of the country’s most successful new businesses.

He’s now well on his way to that total, struggling to keep up with demand from young Vietnamese, keen to embrace the coffee shop culture. Another of his new shops is on a boat moored on the very lake where McCain landed after parachuting from his crippled aircraft. He’s hiring a hundred new employees a week.

Thai had lived in Seattle, the home of Starbucks, which is where he got his taste for coffee. He returned to Vietnam in 1996, and had to wait for two years for his first license to be processed. “Now it takes two weeks,” he says.

In the early days he lived in a tiny Hanoi apartment. When his mother came to visit him she cried.

“She told me she’d created a good life for me in America, and simply couldn't’ understand why I’d come back to that,” recalls Thai.

Now his mother is a regular visitor to his large villa, complete with swimming pool, in a new California-style development called Saigon South, a short distance from the city now officially called Ho Chi Minh City.

Opening up to the world
In the years after the war, Vietnam had been largely closed to the world. They began to open around the time Thai returned, though it was a faltering process at first. Now it seems there is no turning back, with the economy growing at a blistering pace, second only to China in the region, with investors pouring in.

Since the country opened its door, young Vietnamese — half the country’s 85 million population are under 25 — have embraced the world at breakneck pace, with little concern about politics or the past. They are more likely to be found striking a deal over a latte than reminiscing about the war.

The face of change is everywhere, from plush new shopping malls to luxury foreign cars, sales of which are growing by twenty per cent a year. Ho Ch Minh City even has its first Hummer, which has been brought by a local travel company and is hired out for $250 a day.

It’s hardly the most practical car on streets clogged with motorcycles, but the machine that may be the ultimate symbol of American motoring excess is proving popular with the city’s new rich.

America is playing catch-up. In spite of the massive billion-dollar investment announced by Intel earlier this month, U.S. companies have been slow off the mark. The U.S. is ranked ninth in terms in the inward investment league, though this may understate the real total, since much investment is made through subsidiaries in Singapore or Hong Kong.

Two-way trade has ballooned to more than $8 billion, compared with just a billion in 2001, though this is massively in Vietnam’s favor.

President Bush’s hosts have been disappointed by the failure in the House of Representatives last week of the Bill to normalize trading relations with Vietnam. Most American business people here find it very shortsighted, believing WTO entry will make Vietnam even more attractive a destination for business and that U.S. companies are well paced to take advantage of the huge anticipated demand for developing the country’s poor infrastructure.

“You can have an American-style business plan, American style structure, all implemented here with a very cooperative work force and a cooperative government,” insists Walter Blocker, who heads the American chamber of Commerce. His own business interests range from power station to cosmetics. He claims to have brought some of the first imported lipstick to the country in 1994; now that business is booming too.

He’s meeting President Bush this weekend.

Still a one-party communist state
In spite of its opening and embracing of the market, Vietnam remains a one-party communist state. Hanoi’s human rights record came under fire from Human Rights Watch a few days before the President’s visit.

But even those with good reason to be wary are very upbeat. Vietnamese like Phu Than, who was fourteen in 1975 when he and his family escaped on one of the last helicopters out of war-ravaged Saigon. How he’s country manager for Intel, and he says coming back was a “no-brainer.”

“Sixty percent of the population were born after the war. They have no recollection of the war. They are young, very forward-looking and very tech-savvy.”

Sales of computers and mobile phones, and the use of the Internet are expanding rapidly here.

“Societies change, relationships alter for the good,” said President Bush on his arrival in Vietnam. Even the most hawkish members of his administration probably recognize that in a world containing some pretty potent terrorist threats, hostility to Vietnam makes little sense, especially when the government here is so keen to reach out to Washington

Vietnam’s other attraction is that it is not China. Costs have been rising rapidly in China. By some measures labor costs are twice those in Vietnam. Many businesses are also wary of putting too many eggs in the Beijing basket. Friendship with Vietnam is also seen by many in the Bush administration as important in the growing rivalry between the U.S. and China for influence in the region.

Vietnam is seen as the next big thing, and there are a growing army of young consumers here ready to toast Asia’s newest tiger — with a cup of David Thai’s coffee.

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