Two years ago, when I first moved to Việt Nam, Hà Nội had the look and feel of a boom town.

A panorama of the skyline revealed several towers rising hither and yon, and dozens of construction cranes hinting at many more developments to come.

Then came the upbeat news that Việt Nam, after years of consistently impressive economic growth, had finally edged into “middle income” status as measured by the World Bank.

So when we first drove past the expansive construction site of Ciputra Hà Nội Mall on the Tây Hồ side of that upscale, gated community, my nine-year-old daughter was excited.

California girls like shopping malls.

She saw the temporary wall that was designed to both hide the construction and show off a glorious image of the citadel of consumerism to come.

But the other day, she scowled as we drove past:

“They’ll never finish that mall.”

For my own wallet, this might be a good thing.

But for Việt Nam, the moribund mall site is more evidence of a nation treading turbulent waters.

Today, the country’s urban skyline is much less than meets the eye.

Some of those commercial buildings and apartment towers are vacant or close to it.

Many construction cranes have not moved for months.

My daughter scornfully wonders why this is so.

She will explain how, in her “market day” class, her team made sure they had enough money to buy the ingredients for the treats they prepared and sold to classmates, making a tidy profit.

So why can’t Việt Nam’s mall builders figure this business stuff out?

I try to explain how it’s much more complicated for adults, whether they are Vietnamese or foreigners investing in Việt Nam.

But she has a point.

Việt Namvis now paying the price for the greed and overreaching of its real estate developers and the bankers who backed them.

All kinds of projects are in trouble, and the banking system is saddled with what the Vietnamese English-language business press calls NPLs, for “non-performing loans.”

And so now the State Bank is trying to restructure Việt Nam’s banking industry.

To Westerners, this may seem familiar – a smaller-scale echo of the epic Wall Street financial meltdown of 2008 in which huge volumes of bad debt hastened a Washington-ordered financial consolidation and a taxpayer-funded bailout.

Now Americans are experiencing a slow economic recovery while worrying that Europe’s troubles will send the globe back into recession.

Việt Nam’s problems aren’t of the magnitude of Greece’s or Spain’s.

Việt Nam’s economy continues to grow, and unemployment isn’t as high.

But for many people, inflation has eaten into much of the economic progress, and the gains seem to be going to the few.

Việt Nam’s economic path most closely resembles China’s:

Back in 2008, while the West staggered into the Great Recession, the economies of China and Việt Nam kept growing.

Now both China and Việt Nam are slowing down too, dealing with both similar problems and some uniquely their own.

In Việt Nam, the banks and developers are now working to cut their losses.

Banks are exploring mergers while awaiting more guidance from the State Bank.

Homebuilders are slashing prices, and then slashing them again, while some also try to figure out drastic remodels to create smaller, more affordable units – while knowing that success in selling these will decrease potential buyers elsewhere.

On a recent day, a Western businessman was speculating about the prospects for a new company that could mine the financial wreckage of Việt Nam’s NPL – buying bad debt low, and making collections.

In good times and bad times, there is always money to be made, somehow.

Yet for all the reports of the gloomy economy in Việt Nam’s business press, there is still no shortage of sunny articles hyping an entire “new city” or just a new apartment complex on the outskirts of Hồ Chí Minh City or Hà Nội boasting an unsurpassed lifestyle – projects that are targeting the Vietnamese nouveau riche.

One is left with the impression that a bit more central planning – city planning, that is, and sensible zoning and scheduling – might have been in order.

The good news is that many investors keep saying that Việt Nam will get through its growing pains and go on to achieve more prosperity for its people.

And if a critical mass emerges to support a real mall in Tây Hồ, my daughter would be very pleased.

She’d rather shop than scowl.




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