By J.R. Reed
When visitors travel down the city of Da Nang’s newly-paved, four-lane boulevard, Vo Nguyen Gian Drive, some say they feel as though they are moving between two disparate nations. On the left side of the road, one can see a string of exclusive five-star resorts and million dollar villas aligning a pristine coastline. Seated on the southerly curve of a vast bay, Da Nang offers a breathtaking vista that would satisfy tourists with even the most discriminating taste. But, twenty-foot walls separate the Hyatt Regency, Fusion Maia Resort, and other luxurious destinations from an entirely different urban scene. On the right side of Vo Nguyen Gian Drive, tin-shacks and odd patches of vegetation dot the predominantly empty land plots. Central Vietnam’s most recognizable city has used its underdeveloped shoreline to carve out a permanent place on the world tourism map, but Da Nang’s economic development journey has not come without severe bumps along the road.
Throughout the Vietnam War, both the South Vietnamese and United States air forces used Da Nang as a major military base. This base was thought to be one of the busiest in the world at the time, conducting more traffic operations daily than any other airport. By the early 1980s, the U.S.’s wartime assistance in the prior decade had helped Da Nang greatly expand its harbor facilities, turning the city into one of Vietnam’s most modern and largest ports. And despite the significant toll that the Vietnam War did have on the region, the costs of wartime devastation would ultimately pale in comparison to the effects of postwar reconstruction. In the 1980s, globalization and neoliberalism swept the developing world, reaching Vietnam and Da Nang in the 1990s.
During a time when television started to enter the homes of millions and the modern Internet first broke ground, Da Nang’s provincial government began to eagerly pursue foreign direct investment (FDI) and spearhead infrastructural developments. As of mid-2011, 214 FDI projects, with an estimated net value of $3.5 billion, have set up shop in Da Nang. These projects have helped transform Da Nang from a city known for its hostility to foreigners into a popular vacation destination for foreign celebrities and high-level executives alike.
“As the central city of Vietnam, Da Nang has limitless land resources,” said Hoi Mai, a leading representative for Da Nang’s Institute for Socio-Economic Development (ISED), a government agency dedicated to building economically lucrative projects across the city. “The buildup of more and more of these hotels is very positive for economic growth.” Indeed, Da Nang’s boasts a staggering annual city GDP growth rate of 13% and, as of 2013, a 4.45% unemployment rate— lower than all other major cities in the country.
But, as anticipated, the redevelopment of the areas along Da Nang’s sought-after shoreline, across the river from the city center, has also led to the demolition of entire blocks and communities to create space for new roads, hotels, and luxury villas. The groomed resorts have privatized several miles of the city’s most desired beaches—an unpopular change in the eyes of many citizens. City officials hope these hotels will bring publicity, foreigners, global companies, jobs, and, ultimately, sustained economic growth, yet they also admit that the tourism industry’s rise has hurt income inequality citywide.
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Tourists can certainly drive the Da Nang’s economy for now, but it remains to be seen whether the city can continue to prosper if it relies so heavily on this one economic arena. Soon, there won’t be more space to build resorts along the coast, and the industry could lose its momentum. As Da Nang’s city planners seek out opportunities for economic diversification, might they also focus on promoting much-needed inclusive growth? In other words, can the city foster economic development in a way that fosters equality and focuses on the needs of those residents currently living in tin shacks, closing — not widening — the income gap.
The empty land between the city center and the resorts has already been sold to investors and could be used for housing for city residents, according to Dr. Ho Ky Minh, director of Da Nang’s Institute for Social-Economic Development (ISED), a government agency dedicated to building economically lucrative projects across the city. He also believes that service and logistic sectors could overtake tourism, adding that Da Nang plans to create an Information Technology (IT) Park to attract investors in this arena and champion the city as the center of Vietnam’s burgeoning IT sector. In addition to IT, Minh said Da Nang’s two largest export industries, fishing and clothing, could make significant strides if the U.S. can effectively negotiate the Trans-Pacific Partnership (TPP) — a trade agreement being worked out between 11 countries throughout the Asia-Pacific Region, including Vietnam, that focuses on opening up these countries to new markets worldwide.
“If the TPP were passed, we could see Da Nang becoming a center for processing and exporting seafood,” said Hoi Mai, a leading representative for ISED. “This could give us access to some of the fastest growing markets in the world.” Even if Da Nang developers chose to pursue these strategies to confront the city’s pronounced lack of economic diversification, they will still need to address a myriad of related concerns, from faulty municipal infrastructure to widely reported discrimination in hiring decisions.
Many Da Nang residents told the Globalist that, even though tourism has offered more job opportunities, those closest to government officials typically have better access to jobs, creating additional ripples within the city’s social fabric. Furthermore, the assumption that tourism would bring more foreigners who would spend more money on poverty tours has not seemed to hold true.
The luxury hotels and $2 million villas have also provoked a citywide identity crisis. Just a few tin shacks, some one-story stone buildings, dilapidated storefronts, and a few fields of weeds remain as remnants of Da Nang’s old fishing communities. A mile of empty land plots divides the city into a metropolis of five-star resorts and a prototypical Vietnamese city center boasting fruit vendors and banh mi stands. The newly-paved, four-lane avenue and painted brick wall further separate the luxurious hotels from the rest of the city.
To address these concerns, Hoi Mai and other members of Da Nang’s ISED believe that city planners must prioritize urbanization projects. City officials hope that these projects will integrate the city’s population, spark growth across income levels, and mitigate the current levels of inequality. The long avenue of resorts, flying the flags of many developed nations, remains undoubtedly the face of Da Nang’s services-oriented development strategy, which has catapulted the city’s GDP in the last decade. But, while recognizing that the city will continue to follow this internationally focused strategy, government officials have simultaneously devoted significant resources towards improving Da Nang’s technical infrastructure. This includes improving access to basic services like electricity, water, and public transportation. According to Mai, the government has begun to draft plans for a Bus-Rapid Transit (BRT) system and a wastewater treatment plan. Mai and her colleagues added that an urban underground rail could also be in the cards — plans that ostensibly would improve Da Nang citizens’ lives but could be five or more years from completion.
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While many Da Nang citizens have expressed concern over the burgeoning tourism sector and its rippling effects throughout society, Lien Le, a current Los Angeles resident who left Da Nang 15 years ago, has been steadfast in her positive feelings towards the one-track economic development strategy. Le loved the city when she grew up there, but says the hotels “have helped the city so much.”
“It’s brought an unprecedented amount of revenue to the city,” Le said. “Most people could not even tell you what region of the world Da Nang was before 2000. That’s completely changed now.” Located in the heart of a central Vietnam region ripe with economic potential, Da Nang is positioned to be a critical transit and transport hub, a gateway to the sea and the Central Highland provinces, and the banking and industrial center of Vietnam. Hoi Mai went so far as to call Da Nang the next Seoul [South Korea] in terms of economic progress. “We are striving to become Seoul economically, and Portland [Oregon] socially,” Minh agreed. But, Portland’s urban center does not pose a juxtaposition of vast beach resorts and corrugated tin shack towns. If Da Nang wants to attain anything close to Portland’s social progress, however, much work still needs to be done. The manicured oceanside resorts lining Vo Nguyen Gian Drive stand as visual testaments to Da Nang’s economic potential — a potential comparable to that of Seoul. But their corrugated counterparts on the interior suggest that addressing the city’s social divides will amount to a far more daunting challenge.
J.R. Reed ‘16 is an Economics and Political Science double major in Silliman College. Contact him at jonathan.t.reed@ yale.edu