Good shopping, Vietnam!

Despatches from Hanoi

The stage is floodlit, and a spiky-haired DJ is gesticulating wildly. Hundreds of fashionable young men and women shake their bodies to the rhythm of western rock in the warm night air. Suddenly, two young men in police uniforms burst on to the stage to the cheering of the crowd. On a closer look, the uniforms are their party outfits, and the red characters on their sleeves read "Security - the Big One". This is the European Music Festival, held at a park in downtown Hanoi.

Since launching Doi Moi, its open-door policy, in the early 1990s, Vietnam has become the second-fastest-growing nation in east Asia after China, and Hanoi, the capital city in the historically backward north, is showcasing the change. At the brand-new Noi Bai Airport, a large poster greets you: "Visit Vietnam For The VISA Experience". Communist Vietnam has finally embraced the plastic card, and Hanoi boasts French restaurants and American cafes, shopping malls with global brand names, and a six-screen cinema complex showing the latest Hollywood films. Beside its old-world charm, Hanoi has gained a touch of glamour.

Away from the city glitz, however, a bumpy bus ride into the provincial areas of the country reveals a tired-looking Vietnam, still exhausted by war and poverty. The lack of basic infrastructure doesn't stop Chinese businesses from moving in to take advantage of the cheap local labour. Nguyen Thi Huong comes from a village two hours' drive from Hanoi, where farmland is being rapidly taken over by incoming Chinese firms. Like many of her neighbours, 27-year-old Huong abandoned farming to work in a Chinese-owned textile factory.

For $40, she had to work ten hours a day, seven days a week. A few months ago, she lost her job after joining a hunger strike with some of her co-workers in protest against the conditions. Others still consider their job a better deal than toiling in the fields.

The strains of the new market economy are beginning to show in Vietnam: high unemployment, the emergence of illegal labour markets, the level of pollution, and the collapse of the health-care system. But the biggest concern for the one-party state is not in trying to maintain economic growth, but in keeping a tight rein on what it calls religious freedom.

In a quiet building in the Dong Da district of Hanoi, Frédéric Labarthe, a Frenchman, is giving lessons to a group of young Vietnamese. The building is marked as the Unesco office, but Frédéric's teaching is all about spirituality. He is the representative for Brahma Kumaris, an organisation from India that practises a particular type of mental yoga. The group only managed to come into Vietnam under the Unesco umbrella, and has had to identify itself as an educational body. "I have to be very careful not to use the word God," says Frédéric.

Another sensitive word in Vietnam is "demo cracy". The visit by the Vietnamese president, Nguyen Minh Triet, to the US in June this year was overshadowed by the arrest of two human rights lawyers in Hanoi whom the authorities accused of using the label "democracy" to distort the situation in the country.

Discontent about the Communist Party is widespread, and many Vietnamese consider the party deeply corrupt, even those who were once its most ardent followers. In a small courtyard in Hanoi, Mrs Huong, a musician who fought in the Vietnam War with her famous composer husband, looks back on her life with great bitterness. The revolutionary anthems her husband wrote about the war are still favourites in Vietnam, but the spirit of those songs is lost for ever. "I remember the days when we walked through the fields where the Americans had just sprayed Agent Orange," she says. "I will never forget that fear. Our generation sacrificed so much, but what for? I couldn't believe how devoted we were to the party!"

Mrs Huong's son, a musician himself, happens to be the organiser of the Hanoi European Music Festival. His life and music are different from those of his parents' generation, but he is not exactly having an easier time. He has had to ask the authorities for permission to organise such a major public event as this, and promise to wrap up at 11pm sharp. Otherwise, the real policemen will arrive. This is Vietnam, after all.

This article first appeared in the 17 December 2007 issue of the New Statesman, Christmas and New Year special 2007