Peace Finally At Hand

By JAMES WALSH

Lyndon Johnson called it a "damned little pissant country." Even less flattering language was used by many of the half a million Americans in uniform who made their way through, around and above it: trooping across swamps, languishing in Quonset huts, piloting PT boats, spacing out on drugs, shelling from offshore, amputating limbs, bombing from B-52s, killing, maiming -- and getting maimed and killed. How all that ended is well known. Bill Clinton, a college dissenter during the height of hostilities in Vietnam, showed last week that he could put a coda to that sad history and make a fresh start at pacification, this time with butter instead of guns. His lifting of Washington's 30-year-old trade embargo against Hanoi amounted to the final farewell to arms in the long, dismal, tortured struggle that devoured much of the best resources of both countries.

Even so, the President looked uncomfortable doing it. The outstanding issue between the U.S. and Vietnam is one that can still turn out to be a land mine for this war-era draft avoider: the final disposition of American servicemen whose fate in battle remains unresolved. In his announcement Clinton deferred elaborately to the families of those missing in action, stressing that he was "absolutely convinced" that ending the embargo would best serve their interests.

The salve was probably warranted, but most Americans did not require it. They had long since accepted the need to close the books on their country's most anguished 20th century war. "The drumbeat of history is moving in the opposite direction," declared Jan Scruggs, one of the movers behind the Vietnam Memorial, the black, V-shaped granite wall that draws thousands of poignant pilgrimages every year to Washington, "and we have to catch up with the rest of the world."

For now, Hanoi's breakthrough to its old foe is less than total. Though the two sides are setting up liaison offices to handle their interests, Washington is withholding diplomatic recognition pending what Clinton called "more progress, more cooperation, more answers" on missing servicemen. The list, which technically numbers 2,238, is actually far shorter. The Pentagon is satisfied that only 73 unresolved cases remain in which the missing combatants could conceivably have been captured alive. Some families, and supporting % groups of veterans, hotly dispute such a short list, calling Clinton a victim of bureaucratic flimflam.

The President took pains to meet with representatives of the veterans before the announcement. The sessions were clearly sensitive for him. When he delivered a Memorial Day speech at the Vietnam Memorial last year -- at the point when controversy over plans to admit gays to the military was still high -- many veterans turned their backs on the new Commander in Chief and shouted catcalls. Last week Clinton denied he had put a commercial gold rush ahead of veterans' concerns, which a top aide insisted were his "sole consideration." The logic was that Vietnam needed a show of good faith by the U.S. to ensure settling the MIA issue permanently.

Vietnamese leaders feel they have gone a long way by turning over remains and releasing archives. They have long been angling for the prize of U.S. trade and investment, which signals for them final access to the expanding circle of prosperity on the Pacific Rim. With its five-year-old, China-style market reforms known as doi moi, or economic renovation, the country of 70 million is hailed by entrepreneurs as one of the most fertile frontiers remaining for international investment.

How rich a prospect? Says Levi Richardson, manager of Vietnam affairs for the U.S.-ASEAN Council for Business and Technology: "There will be phenomenal growth. They're starting at ground zero." The U.S.-ASEAN Council, which includes many of the FORTUNE 500 companies that do business in Southeast Asia, has conducted the only systematic survey of Vietnam's business opportunities; it expects roughly $2.6 billion worth of trade and investment to flow within two years and $8.2 billion within five. Even then, Vietnam would not be "a powerhouse like Indonesia and other ASEAN countries," Richardson admits, "but people expect it to become a significant trading partner."

Optimists see one of the most significant economic opportunities of the next decade: the rebuilding virtually from the ground up of Southeast Asia's second most populous nation. A land that underwent almost 30 years of continuous warfare -- including bombing by more tonnage of explosives than was dropped by the Allies on Germany in World War II -- is still largely ruined terrain. About 4,000 bridges and 50,000 miles of roads need to be replaced or repaired. Hanoi anticipates spending about $1 billion before the turn of the century on harbor-dredging projects alone. The country also needs power plants, additional airliners and new hotels, dozens of which are already under construction in Saigon, now called Ho Chi Minh City.

The enthusiasts believe that assets like oil, timber and an industrious, literate population are the makings of another Asian miracle. Harder heads are skeptical, noting that the nation consolidated by Ho Chi Minh's heirs after the 1975 fall of Saigon is poverty-stricken and still at least partly under the thumb of ancient Marxists. Per capita income remains at $200 a year, one of the poorest in the world. Says Julian Reid, a director of Jardine Fleming Securities in Hong Kong: "In the medium to long term, Vietnam is extremely exciting. The short term is full of frustrations."

Nevertheless, the world has been beating a path to the reforming communist country's door, and American business scouts have been like frustrated greyhounds in the traps, waiting to spring. Practically within minutes after Clinton's announcement, Pepsi-Cola was passing out free cans of Pepsi on the streets of Ho Chi Minh City. United Airlines promised to inaugurate regular flights from Los Angeles quickly. American Express signed a contract to return with its charge cards, the first to be admitted in 19 years. A regime that used to revile Uncle Sam as an imperialist aggressor was rolling out the welcome mat for a strategic economic partnership with Yankee might and know- how.

At least 34 U.S. firms have set up in-country offices, and several of them were waiting only for Clinton's go-ahead before putting ink to paper. Pepsi's rival Coca-Cola has lined up two joint ventures; Cokes will sell for the equivalent of 10 cents each. Division president Andrew Angle explains, "We want to keep the price as low as we can. We think Vietnam, with its hot, humid climate, has the potential to become one of our major markets in Asia."

Mobil Oil has an inside track too. It is prepared to buy a 38% stake in a consortium that will explore the offshore Blue Dragon field about 150 miles southeast of Ho Chi Minh City. Some outside consultants believe Vietnam is saving for American interests a share in the offshore Big Bear field. It would be a significant move. Big Bear stretches over South China Sea beds also claimed by China, which has been flexing its naval muscle in the neighborhood. Should the People's Republic begin exploiting the field in waters it controls, it could drain away profits important to Hanoi. American involvement would be an effective political counterweight.

Lack of legal safeguards is a large cloud on the golden horizon, though Hanoi recently passed its first bankruptcy code after the war. Another major caveat: a near dearth of normal banking procedures. Can a stock exchange open in the country before the end of the year, as Vietnam hopes? Hong Kong analyst Reid doubts it: "You can't even write a check. The largest currency denomination is a 50,000-dong bill ((about $5)). If you wanted to buy $1 million worth of stock, you'd have to go around with eight wheelbarrows full of cash."

A more basic quandary is the political system, reform communist in name but still pouring revenues into antiquated, money-losing state-owned industries. Bureaucratic decisions are almost whimsical, says Meridee Matson, vice president of Dallas-based Channel Marketing Corp. Her firm won a license to do business in the country two months ago. "Things change on a daily basis," she says. "You think something's been approved, and it's not." She adds, "No one wants to talk about it, but bribery is very big over there. If people don't want cash under the table, they want a paid trip to the U.S."

What Hanoi has yet to show is whether its market experiments are built to last. Bui Diem, a former South Vietnamese ambassador to Washington, faults the revolutionary generation itself for leading the country down a bombed-out economic road. "For Vietnam to become some kind of new tiger," he argues, "you need economic development and political liberalization. The party is in control. Its leaders can change the laws the way they want. If there's no liberalization, there's no possibility of long-range, stable development."

All the same, Vietnamese tend to believe that the return of Uncle Sam, offering strategic security with one hand and commercial goodwill with the other, will redeem a history of mutual mistakes. "Everyone I know is interested in doing business in Vietnam," says Hong Kong-based U.S. businessman Warren Williams. "Expectations on both sides are unrealistic. When I was there in the mid- to late '60s, the Vietnamese thought nothing would go right until the Americans got out. Now they say nothing will go right until the Americans come back. I thought they were wrong then, and I think they are wrong now." Fair warning: a generation after 58,000 Americans and 650,000 Vietnamese died fighting one another, Clinton's fresh start may prefigure some disillusionments. But it is a welcome start to a better future for all that.

With reporting by John Colmey and William Dowell/Hong Kong, Jay Peterzell/Washington and Barbara Rudolph/New York