I can understand the poverty in Hanoi – it’s the wealth I don’t get
While I wondered aloud on Facebook where to head for our Hoi An honeymoon a friend made a suggestion.
The place she mentioned was literally 20 times more than my budget.
When I hinted that this was a little out of my price range, she persisted. The suggestion being that a honeymoon was a time to “splash out”.
The truth is, at 20 times less, I already was paying more than usual.
I don’t write this to illustrate how poor I am. I’m not. Not even by expat standards. Not if the classified ads on the New Hanoian site are anything to go by – half drunk bottle of whiskies for sale. Old mosquito nets, one spoon etc.
But I am slowly becoming aware of people being able to afford the kind of prices that normally have me thinking…just who pays that?
In many cases it leaves you making mental calculations as to just how much people must earn. Either it’s invariably more than I imagine or people are benefitting from other income streams.
For the Vietnamese, differences are even more extreme. Rolls Royce, Hummers and Aston Martins are all to be seen on Hanoi roads. And yet to me most businesses here appear, at least outwardly, to be failing.
Empty restaurants filled only by their own over-staffing. Empty shops strewn with sleeping shop assistants. Tourist stalls where thick dust on half the stock is a tell tale sign of literally nothing being sold.
Not to mention those Old Quarter shops selling only knitwear which don’t consider diversifying through Hanoi’s forty degree summer.
I can understand poverty here. It’s the wealth I don’t get.
People are paying $1,000 a night for hotel rooms and they’re staying for a week. People I thought of as contemporaries by age, background and, so I thought, earnings are springing for long-haul business class airline seats.
If I can just about understand how they’ve made enough money to afford nice holidays – I can’t understand how they’re wealthy enough to take so much time off from earning it.
Meanwhile many expat families regularly seem to Sunday brunch at five star hotels at $35 a head – champagne included.
People visit chocolate buffets.
I’m way beyond being sensitive over displays of wealth in a developing country and yet…a chocolate buffet almost seems like you’re rubbing it.
I shall eat till I am sick…and I shall eat only chocolate.
None of this is a complaint. The creation of wealth is how this country will grow and more people will be rescued from the most hideous poverty.
But I find myself increasingly unable to understand wealth here.
I have often wondered about this issue myself. Even down in Long Xuyen, a much smaller and poorer city than Hanoi or Saigon, there were Bentleys and Porsches driving on the streets. I just stared and wondered how.
There’s always the suggestion that rich Vietnamese are somehow “connected” to the government and while that may have been true – increasingly there is just too much wealth for that to be the case.
In Hanoi, as far as locals are concerned, I think it’s all about property. Its the same reason as there is always building work – the land itself is so valuable the cost of building or knocking down something on top of it is negligible.
Ordinary people have become super rich after buying at the right time or cashing in on long-held land.
Wider than that – as far as expats are concerned – I just don’t get it. Maybe it’s as simple as people just earn more than I thought.
What? You do not have a Mercedes or two? Didn’t you form a fictitious company, raised investment overseas, promised millions in return (without telling investors the currency in question was dong), and buy a highly overpriced car for your “company”?
Okay, okay, you probably one of them honest blokes from Europe (I have no idea what a bloke is). Here is some advice on how to make some easy money. Buy yourself some gold bars and then sell it to people. Now here is the best part, tell them if they leave it with you, for safe keeping, you will give them a really good interest rate. Really great offer and then you turn it around and sell the same bar/s to another guy with the same promises, and you keep going. You will earn some pretty good cash, have some on the side to pay interests.
Just do not let all them get their gold at the same time. Oh yeah, you can even shave the corners off to create more gold bars and possibly mix it with flour, cement, or anything that hardens and can be painted over.
Then you can buy yourself a nice $340,000 US Mercedes and give me 10.123% commission for my advice.
Get with the program, you are in Vietnam!!!
I have been wondering about this too — not so much about the obviously nouveau rich Vietnamese, but the middle class homeowners in my neighborhood. They have large houses, a car, fine furniture, and their children attend private schools. Yet my knowledge of the typical middle class Vietnamese salary does not fit this lifestyle. I have not been able to figure it out, and my Vietnamese friends haven’t provided good answers either. Since I work for a Vietnamese company on a Vietnamese middle class salary myself, I should be able to compare, and I can’t.
Concerning the Vietnamese high-rollers, this debate seems to pop on the blogs every year and a bit — I’m no closer to having anything close to a decent answer, but my rough-around-the-edges tuppence to add to this is: Much of the moneyed up masses have tapped in to the economy in all sorts of ways — connections, smartness, good fortune, nepotism or right place right time-ness, or a combination of a few of those — and through good old fashioned business savvy and hard work or blind luck have profited off the industries that have had frightening growth in the last 10 – 15 years.
As me granddaddy used to say, “you can’t go wrong with bricks and mortar”, so imagine how much wealth Vietnam’s biggest construction companies (as one example) generate with the rate of construction… those profits for the various beneficiaries then get pumped back into other growth sectors/ industries — land, property, cement production, instant noodles or the Stock Market or whatever — and they become even more fantastically wealthy (Some also hit a dead end and lose the lot).
For the less flamboyantly successful and wealthy, there’s the importance of the (extended) family economy — a strong economic unit of aunts, uncles, brothers, sisters, maybe even cousins, and grandparents may help a young parent start his business, or buy a car, or buy a house, or send a kid abroad to study. Next time around he’s chipping in VND200 million for one of his sisters, or uncles, or whomever, to return the favour. Mind you people will also borrow to buy assets they can’t afford — keeping up with the Nguyens-syndrome — so some families are perhaps not as flush as they first might appear.
As for expats, when it comes to bingeing everyone has their vice, I don’t spend $35 on chocolate but I have done on booze. Also, for an expat on an overseas-hire package with rent, kids education, insurance, transport, flights home, all paid for, (and maybe even a tax-free salary)… well, getting a chance to spend money might almost be a novelty. With champagne included, Sunday buffets here also probably sound like good value to some.
Others might just be larging it up — it is a boomtown after all and people get carried away. Just ask the guy/ gal in the backseat of the Rolls. Now THEY’RE really rubbing it in!
Well, this may help put things into perspective.
In my circle of Vietnamese friends in HCMC, a couple of the guys in their mid to late-20s told me they earned about US$700-$800/month doing mid-management kind of jobs. They told me they earned so much because they worked for foreign companies.
Another guy, who had a government job and so, I assumed, earned less, suddenly bought a house. He paid US$100,000 CASH for it. I was told the cash would have been his cut of the bribes his department took.
Wow – thanks for such good comments. It would seem that there is no clear answer.
Corruption comes into but, my belief, is that it’s far from the be all and end all. Certainly the family “pooling” of cash must also be of major assistance.
And as Teddy says all the fall out from construction must reach along way. My neighbours are my landlords. They own this house, their own obviously and the next door neighbours.
Between them the land must be worth enough for them to never have to work again but you wouldn’t call them a wealthy family. Yet they’re sitting on millions. The Dad tends his bonsai and does exercises and collects cash. Their must be so much money generated in this way – people from the land value in Hanoi.
As for expat wealth – I don’t think it is so different in many way. Teddy you are right about vices but there’s also something about being an expat, for some people, where they wallow in the luxurious lifestyle. I saw an advert recently for a chocolate massage. What next? A caviar massage? A champagne enema?
I think with Vietnamese and with rich expats – it’s not about the wage – it’s about the extras and the add-ons and the kick backs etc.
It seems almost like it’s impossible to get rich on a wage alone.
If I had to pick an answer, it would be “tourism”. As you know, I’ve been there 6 times over the last 4 years, and you went a couple of years before I did.
The number of tourists, visibly at least, has skyrocketed in the last couple of years. The Old Quarter now has *at least* 6 hostels (not hotels) that I saw on this most recent trip when there used to be one. The HBH alone used to host around 60 people at a peak and often was fairly quiet. Now it hosts nearer 200 and is rammed to the rafters virtually every single night.
The people running hotels, travel shops and upper market (ie tourist friendly) venues will therefore be raking it in. I’m sure they’re not the only ones who are making it rich, and the other reasons mentioned above will certainly come into it. But Johnny Foreigner is certainly helping make some people very wealthy indeed.
Other people’s wealth is just as confusing here in the States, and frustrating that some of us with genuine smarts & ability cannot seem to get ahead. It is uncomfortable, to say the least, to see someone my age (about the same as yours) or younger driving a Bentley or similarly-priced vehicle. Personally, I have been stuck in an entry-level desk job (with nearly 15 years of broader experience) since roughly 2006.
re: Hoi An — It appears to be too late to be of help, but I recently enjoyed a stay at the Ancient House Resort, which is VERY reasonably priced, if a bit far from the old town. (To be perfectly honest, it was the only enjoyable thing about Hoi An. I found the town to have, as another reviewer once wrote, “died of tourism.”) The Ancient House supplies almost the entire town with fresh noodles and I never thought I’d be able to tell the difference in noodles, but they’re very good. [Interestingly (perhaps only to me), I was in Nha Trang (at the very same Novotel) the week before you but had moved-on, northward, by the time you arrived. Not that we would have known each other from any other two my trang, but I digress...]
How about you export Violet rice to the UK????????????
Get in on the ground floor!!!!!!!!!!!!!!!!
I live in the U.S., but I have an aunt who is quite wealthy who lives in Vietnam. I can tell you that she really worked hard for her money. When my aunt and dad were young, their family was very poor. My aunt started working in the timber/lumber business at a young age. This was prior to the fall of Vietnam. Eventually, she worked her way to starting her own very small company. She was able to purchase her own equipment and started her own small lumber cutting business.
When Vietnam felled, she was able to still prosper under communism. There were much more bribing that occurred under communism to not only get the job, but also get the job done. And when Vietnam moved to heavily restrict the cutting down of trees for lumber due to environmental concerns during the 1990′s, she sold her business and bought land to grow rubber. When this happen, it really hit her hard financially and all the people in the timber/lumber industry in Vietnam. Many went bankrupt. And bankruptcy in Vietnam is not the same as in the U.S. and Europe where you are under the protection of the court. In Vietnam, you get harrassed, beaten, and, I am sure in some cases, killed.
She was able to survive because she also invested in properties. She sold all her properties to purchase land to grow rubber. After four years of growing the rubber trees and during which time she lost money due to the initial investment of getting the plantation started, she was able to start to make a profit. Then after that, she was making really good money monthly from selling the rubber sap because the price and demand for natural rubber increased. Now, she owns a house that is closed to $1 million USD, a brand new luxury SUV, a driver, maids, and some land to grow her fruit orchards (not for sell, but more for fun and personal consumption). She traveled to the U.S. to visit several times for leisure.
When I visited her in Vietnam , she was always busy traveling. She had to over-see the plantation and the workers. She had to go and sell and purchase equipments. She had to negotiate for the buyers. She had to deal with the government on so many issues including permits, tax, legal profit sharing, and probably some bribing. She worked hard. If anyone tried traveling 30 miles in Vietnam, it’s not the same as in the U.S. and Europe where it probably takes you 30 minutes to make the commute. In Vietnam, it’s like half a day. She traveled hundreds of of miles on some trips.
I tell this story to give everyone some background on some people who did make it rich in the Vietnam. And it’s not always through “connections”, but through hard work and sacrifices.
By the way, I really don’t want to make it sound so easy for her to start her own company. She literally started out small by purchasing one piece of very used equipment. No one buys new equipment back in those days. All the equipment were used in some other countries and they get discarded. The old equipment gets shipped back to Vietnam where they find innovative people to fix them up again. She would have one piece to cut down the trees, but she didn’t have anything to haul them. She would hired someone or shared in the profit with someone with a big truck to haul the lumber to the mill. She kept on doing this until she was able to purchase her own hauling truck. And she kept on expanding.
Judging from the comments spike, I’d say you’ve pinched a nerve with this post.
Sometimes during the waning years of the Cold War, the powers that be in VN realized they didn’t want Communism and themselves to be rolled up and chucked into the dust bin of history. So I imagined at some propitious moment someone in the Politburo chirped up: “Comrades, Communism just ain’t footing the bills anymore. Therefore, we should cook up some cockamamie Market Economy with Socialist Orientation policy, and invite the American and his capitalist kins back to Vietnam to do business and we will drink Coca-Cola and leech some cold hard cash from the whole shebang while we are at it.”
By all acounts, the Vina SOE sector is bleeding serious money and a big chunk goes into the hands of corrupt officials and their cronies.
Maybe you should put a wire on people?
Other income streams, that would be a major factor. Many, many people pay large amounts of money for their jobs. Often months or even years of salary. This is not jsut in the government sector either. Of course the willingness to do this is often because the salary the job brings in is the least of what you can earn.
Thirty five dollars for a large buffet lunch is not so bad. You’d pay that for a basic meal and glass of wine back home. And many, many locals will pay those prices for a ‘special’ meal, a business-oriented jungle meat and Hennessey sort of deal. And ultimately, it’s their money. They want to spend it at a chocolate buffet rather than something more worthy, it’s their business. What’s more annoying are expat blog lists of their top ten best things about Vietnam and it’s all cheap massage, cheap booze, more cheap massages, some acupunture and cheap flowers and the “smiling” pho vendor. Not sure about anyone else but I find that lamer than Spend Up Sundays.
Okay I’ll do this backwards….
Helen, As regards the cheap thing. Yeah that kind of bugs me too. I always find it odd when people have to add the price to everything on blogs.
Then again a friend recently asked me if I had a million dollars would I stay here – and suddenly, being rich you have different options – so maybe the cheap thing is more important than we might think.
But a country has to be more than either cheap OR luxury right..the stuff between the commerce. But you’re right. Interesting perspective on paying for jobs too.
Jobs in that case are kind of like houses – you may earn some rent from them but the big money comes when you want to sell it on. Jobs as an investment – interesting.
Dames – step away from the TV.
TNB and such is life – in England we do it a different way. MPs dodge systems and get free second homes and then pay for their wives and kids to work for them on massive salaries while spending less and less time in government and more picking up directorships.
Both, to my mind, unforgiveable, although one largely accepted.
Springroll thank you so much for that. That was fascinating. It reminded me of the parents of the Girl in the Picture book. I recall her setting off selling pho on a street corner and working her way up to a nice restaurant – but the hours of work were incredible. Sometimes even to the point of her not sleeping for two to three days at a time.
Tiny Hands – last couple of times I went home I started to note that friends had suddenly become noticeably richer. That had probably taken 15 years after college. It set me wondering whether my years of volunteering had made me miss the “get rich” bit. Thanks for your Hoi An advice – a few others have said that place but we’re headed to the beach bit. All booked now.
Mosh – I’m not so sure about tourism. My impression is that most of the big resorts that make real money are in the hands of foreigners while the local own the small hotels. I am sure that overall tourism has made a big difference but not sure it has out weighed other sectors particularly property.
I recall a tourism blogger here saying that he had met officials at a some tourist event and they said tourism to them was just a hobby, the real money was in factories. I think they are being short sighted but, at present, that could be how it is. Or I could be wrong. What do I know.
Thanks all for comments – been really interesting.
Not sure I am closer to a specific answer – except – there is no specific answer. Just all of the above.
A few things, from a Vietnamese person’s point of view
1. Corruption has always been mentioned as the main “cause”, but this doesn’t apply much any more, not all the cases. So yes, you may take a wild guess, but don’t always assume that’s the case.
2. Some people are doing real good business and such, but how about your normal salary men and government work? The answer is that most people in Vietnam do more than 1 job: a day job and then at least 1 side job. More often than not, this side job brings as much (or even more) income as the main one. Why do they still do the main job you ask? Many reasons, but the main reason is usually that the main job bring you connections which can be useful when you do your side job.
Take me as an example, my normal job salary is ~6mil/month (around 300usd), my side job earns me…. well I won’t tell, but a lot more. And before you jump to your own conclusion, it’s perfectly legal/ethical/… side job.
3. Another ugly truth: we all (may be not all, but most of us) know the truth that Vietnamese people like to show off (this can be listed in the top 10 ugly truths about Vietnamese ^_^, I know foreign retailers here love this trait), I personally know people who borrowed money to buy Iphone, laptop, cool bikes etc not for the real application of the items themselves but mainly to show off.
A wedding, for example, can be a great chance to show off as well.
4. And then, in the West it can be quite abnormal for you to ask your family for money to buy a house (or not? Im not sure here), but in Vietnam it’s quite normal for the parents to help out if they can afford to.
As much as I am perplexed about crumby looking shops in Hanoi with owners that drive 10,000 dollar motorbikes, I am even more confused about the “have nots”. In Thai Nguyen a first year University teacher makes less than 100 dollars a month. Students at Thai Nguyen University will attempt to cook food in their dorm room (of 8 people) in order to save 5,000 dong per day (about 25 cents). The gap is ridiculous.
love this entry! Every year I came back to Hanoi from the US and I always had the same question: how did people earn their Mercedes/BMW? I don’t have an answer. I think even with my education background in a well known university in the US, i’ll never be able to afford such luxury if I work in Hanoi