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Lan Barnes wrote:
> You have some confusion about life in socialist states.

I have spent a year living in a socialist state. :) But Vietnam may be
different from China. In Vietnam nobody trusts any insurance company so
nobody buys insurance and the government never advertises insurance. The
vietnamese word for insurance is "b?o hi?m" and I have never seen nor
heard it anywhere over there.

I just took a poll via IM of 6 very good Vietnamese friends of mine
(half of which are computer geeks and one of which is quickly becoming a
hard core Linux user thanks to yours truly) and none of them know anyone
who has any kind of insurance at all. Nor have they seen insurance
advertised by the government. No life insurance, health insurance,
motorbike insurance (equivalent to our car insurance which is required
by the government there also but you bribe the cop if you get caught,
cheaper than buying insurance) etc. If you are poor and get sick you
die. You could go to one of the state sponsored hospitals where you will
simply die while waiting for service or die after the doctor tells you
that the lump growing in your shoulder is there because you eat too much
meat. Seriously. This actually happened to someone I know. When they
were a teenager they had a lump in their shoulder. The doctor removed it
and left a big nasty scar and told them they ate too much meat. Lucky
they survived the surgery. When it came back around 4 months ago I
encouraged them to cough up the cash (his family isn't poor anymore) to
go to a "real" foreign-educated doctor, French-educated in this case.
After proper X-rays and ultrasound of the lump he found that it was a
cyst, nobody knows what really causes it, and that it might go away on
its own or that they could optionally have surgery to remove it
properly. Fortunately it went away after a weak.

I also do not know anyone in Vietnam who invests in anything other than
property such as houses (but never the land the house is on since
private ownership of land is forbidden and you can only lease the right
to use the land from the government), gold, or their own personal
business. They average person does not trust the stock market (yes, they
have one although it is tightly government controlled compared to the
market of the US) nor any sort of bond or mutual fund. Although clearly
someone trusts the stock market as people are trading on it.

The North Vietnamese and party members only barely trust the banks as an
option better than hiding their money in their house (which is more
likely to be robbed) but they would trust only the government banks
which are insured by the state. The South Vietnamese still don't trust
the banks but have for the most part been oppressed well enough that
they have no need for banks as they have no money to put in the bank.
But even the trust of the North Vietnamese has only evolved in recent
years as the government has moved away from a centrally planned economy
to a market economy (even they weren't foolish enough to invest their
own money into that system) and the banking system has stabilized. Until
1990 when they implemented "??i m?i" (which means something like
"renovation") the economy was a disaster as they tried to centrally
control capital allocation. Now they are trying to figure out how to
move farther towards a free market economy without losing face.

Interest on deposits in the State Bank of Vietnam is steady around 5%
now. Just last month they finally removed the 1.5% rate cap on US dollar
deposits to bring themselves more in line with international banking
practices. This will contribute to the already huge amount (by local
standards) of foreign investment going on in Vietnam.

While researching this I ran across this interesting paper about the
history of the Vietnamese economy:

http://www.iie.org/fulbrightweb/BankingPaper_Final.pdf

Written by a Vietnamese, no less. But not a Vietnamese living in Vietnam
as such a person is not allowed to write about such things.

> The governments sell insurance to augment government benefits.

Hard to sell insurance to augment government benefits in a place where
there are no government benefits. :)

- --
Tracy R Reed                  Read my blog at http://ultraviolet.org
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