Last summer, the globetrotting Hugo Chavez, Venezuela’s brashly anti-American president, paid visit to Hanoi, hoping to ink a batch of bilateral trade deals and express his kinship with one of the last Communist regimes still in business. True to form, Chavez met with the elderly Vo Nguyen Giap, Vietnam’s brilliant wartime general. He also launched into a familiar tirade against the forces of “imperialism,” praising his Vietnamese hosts for their defeat of the American “monster” three decades ago, which he called “a big example for the world.”

Alas for the self-proclaimed Bolivarian revolutionary, the birthplace of Ho Chi Minh and the Hanoi Hilton is now a stomping grounds for venture capitalists and investment bankers. Sure, the ruling party still sports the Communist label and displays a bust of Uncle Ho—as he is called in the government’s English-language tourism pamphlets—in the great hall of the presidential palace. But today’s Vietnamese Communists are eager to maintain warm relations with Washington. As such, they were happy to sign an oil pact with Chavez but looked askance at his blustery diatribe against Uncle Sam. So they tinkered with his itinerary.

“Chavez’s original schedule had included a visit to the military museum which contains the wreckage of shot-down American aircraft,” reported the BBC’s Bill Hayton. “He was also due to visit the ‘Peace Village,’ which looks after children suffering from health problems blamed on defoliating chemicals used in the war by the U.S. However, those elements of his trip have now been canceled.”

The Venezuelan populist was bound to be “disappointed,” said Hayton. “There are few places in the world more pro-American than modern Vietnam.” That’s not an exaggeration. The United States and Vietnam normalized relations in 1995, then signed a bilateral free trade agreement in July 2000 (which came into effect in December 2001). Vietnamese exports to the U.S. totaled $6.5 billion in 2005, up from $800 million in 2001. Today, Hanoi marks another milestone in its striking transformation from a Soviet-style economy: It officially joins the WTO.

Politically, the story of modern Vietnam begins in 1975, when North Vietnamese tanks rolled into Saigon to topple the U.S.-backed Thieu regime and unify the country. Economically, the key date is 1986, when Hanoi formally launched its economic reforms (known as “Doi Moi”). These were similar, though not identical, to the policies embraced by Chinese leader Deng Xiaoping in 1978 and later made famous by his dictum, “to get rich is glorious.” Regina Abrami, a Vietnam expert at Harvard Business School, notes that both Asian countries took a gradualist approach, recognized the bottom-up changes already underway, and charted comparable paths on agricultural reform. They were less in sync on their foreign direct investment guidelines.

“It was very much an indigenous process,” Abrami says of the Vietnamese experience. “The economy was in dire crisis.” Unlike post-Soviet Eastern Europe, where the transition to capitalism came in the form of “shock therapy” devised by the World Bank and the International Monetary Fund, Vietnam practiced what Abrami calls “bootstrap development.” Even in the former North Vietnam, petty trade had a long pedigree, which helped ease the shift from a command economy to free markets and private enterprise after 1986.

The results have been stunning. Vietnam averaged roughly 9 percent GDP growth per year in the mid-1990s, until the Asian financial crisis hit in 1997. This led to a brief dip, though as The Economist reported in 2004, “when other countries in the region were plunged into recession, growth in Vietnam never fell below 4.8 percent.” GDP expanded by 8.4 percent in 2005, making Vietnam the second fastest growing country in Asia: behind China but ahead of India.

While it remains poor in absolute terms—per capita income was only $638 in 2005, up from $220 in 1994—Vietnam has a lower rate of “extreme poverty” (defined by the World Bank as living on less than one U.S. dollar per day) than China, India, or the Philippines. Growth has been uneven, wracked by regional and other variations, and the Vietnamese Communist Party is divided on both the speed and character of future reforms. But Vietnam is unquestionably among the most dynamic economies in Asia.

Just last month it was added to the S&P/IFC Frontier Index, which tracks the performance of stocks in more than 20 developing countries. “The main Ho Chi Minh City Index doubled in value last year,” reported The Wall Street Journal in early January, “with foreigners big buyers of Vinamilk, a leading dairy producer, and Saigon Commercial Bank, the larger of Vietnam’s two listed banks. Shares there trade at about 26 times estimated 2006 earnings, above the S&P 500’s trailing price/earnings ratio of 18.”

Where it once carried a noxious stigma, capitalism now has surprising cachet in Vietnam. As The New York Times reported last April, Vietnam’s president, prime minister, and deputy prime minister all ducked out from a Communist Party confab on Lenin’s birthday to meet with … Bill Gates. The founder of the Soviet Union apparently had nothing on the founder of Microsoft. The Gates visit became a national news story, as crowds of Vietnamese clamored to welcome him in the streets of Hanoi. “That was very symbolic,” remarked Le Dang Doanh, senior economist at Vietnam’s ministry of planning and investment. “It is a very clear sign of the new mood of society and the people. Everybody wants to be like Bill Gates.”

Raymond Burghardt, who served as U.S. ambassador to Vietnam from 2001 to 2004, agrees: “Young Vietnamese idolize Bill Gates and aspire to study at our universities.” As Burghardt writes, the computer software giant Intel has won an investment license to build a $605 million manufacturing facility in Ho Chi Minh City (formerly Saigon), while Lockheed Martin will construct Vietnam’s first commercial satellite, due to launch in 2008. He also quotes a pair of seasoned diplomats, former U.S. ambassadors Stephen Bosworth and Morton Abramowitz, as saying that Vietnam might well be “the most pro-American country in Southeast Asia.”

The Hanoi School of Business, founded in 1995 as part of Vietnam National University, now boasts around 1,000 students, who also benefit from the school’s close ties with the Amos Tuck School of Business Administration at Dartmouth. The current dean of the Hanoi school, Truong Gia Binh, is one of the most successful Vietnamese CEOs, running the massive technology firm FPT.

“Vietnam ranks right up there with the Philippines in pro-American attitudes,” says Joseph Massey, director of the Center for International Business at Tuck, who spearheaded the Tuck-Hanoi partnership in the mid-1990s. On a geopolitical level, this can partly be attributed to a mutual wariness of China and a shared concern over Islamic terrorists in Southeast Asia. On a personal level, one may cite the large expatriate communities that each nation has sent to the other.

But Massey also points to the youth of the Vietnamese population: Of some 84 million people, roughly 70 percent are below the age of 35—and thus too young to remember, let alone nurse a grudge over, the war. Indeed, most Vietnamese seem to be forward-looking and optimistic—two very American qualities. They have eschewed a persecution complex and moved on from past hostilities. “The attitudes toward the U.S. are largely positive across all age groups,” says Abrami. “They’re remarkably positive, actually.” Abrami has often thought that the “deeply entrepreneurial” Vietnamese “were more like Americans than many Americans realized.”

None of this is to deny the brutal reality of political and religious persecution in Vietnam. It is still a one-party dictatorship—the same dictatorship whose record in the 1970s (executions, labor and “reeducation” camps, boat people) reflected a bloody Stalinism. For certain generations of Vietnamese, those memories are impossible to erase, no matter how many of their countrymen trot off to business school or how many Fortune 500 companies buy real estate in Ho Chi Minh City.

In its 2006 report on “Freedom in the World,” the nonpartisan Freedom House classified Vietnam as “Not Free,” giving Hanoi its lowest possible grade on “political rights” and a slightly better mark on “civil liberties.” Repression is especially tough on certain ethnic groups, including the rural Montagnards and the Hmong Christians. But Freedom House also acknowledged that contemporary Vietnam is no longer a totalitarian state: “Ordinary Vietnamese, particularly those living in major cities, are increasingly free of government intrusion into their daily lives, including their choice of work, place of residence, and participation in economic and religious activities.”

In April 2005, the 30th anniversary of the fall of Saigon, The Economist published an update on Vietnam under the wry headline, “America lost, capitalism won.” Though democracy still lags behind, the remarkable growth of Vietnamese capitalism is worth cheering. So is the extraordinary degree of Vietnamese pro-Americanism. Rarely does historical irony come in so neat a package.

Duncan Currie is a reporter at The Weekly Standard.

Image credit: J. Alex Halderman