The Price of Integration: Measuring the Quality of Money in Postreform Vietnam

The fight against inflation is a defining feature of neoliberalism and structural adjustment policies. Since the 1970s, inflation has been cast as a threat greater than unemployment because it destroys the pricing mechanism on which the flow of information in markets depends. In Vietnam, high rates of inflation in the 1980s led the government to implement reforms of the economy under the slogan Đổi mới (Renovation). These reforms included anti-inflationary measures characteristic of neoliberal policies. By the early 1990s, inflation was reduced to the single digits. After a decade of rapid economic growth, inflation in Vietnam returned. In 2007 and 2008, the consumer price index recorded double-digit increases, raising concerns about the government’s commitment to proper monetary and fiscal policies.

This essay considers the paradoxical return of inflation to Vietnam. By 2007, Vietnam was heralded as an “emerging market,” propelled by foreign investment and export-led growth. Yet inflation was widely attributed to “fiscal indiscipline” by officials with the International Monetary Fund (IMF) and other multilateral financial institutions. Vietnamese public intellectuals, on the other hand, attributed inflation to a consequence of economic integration with global markets. In contrast to the IMF, they pointed to social inequalities generated by the country’s decade-long economic growth and raised concerns over the redistributing wealth in Vietnamese society. These two narratives reenact the divide between Keynesian economics and monetarism that has structured twentieth-century approaches to economics. What both narratives leave unaddressed, however, is how price instability and monetary restructuring are understood within specific economic cultures. In Vietnam, many people rely on cash transactions, thus the quality of money encompasses more than its relationship to price. While the demand among Vietnamese citizens for a reliable currency resonates with contemporary neoliberalism, it cannot be reduced to it.

By way of addressing the divergent concerns with the quality of money, I examine the history of money’s disunification in Vietnam. The problem of inflation is not just a matter of price; it is also related to complex politicalcultural formations that relate to partial sovereignty over the marketplace. I show how inflation is not simply a problem of matter of price; it is also an event that calls into question the limits to how Vietnam has been neoliberalized.