When the woman behind the counter charged us 15,000 đồng per scoop, I pointed to the sign behind her – and she, in turn, pointed to the little handmade sign in front of the cash register with the new price.
Her colleague spoke serviceable English:
“The price of everything is going up.”
That, in retrospect, proved to be an understatement.
Việt Nam’s inflation rate soared to higher than 20 per cent in the middle of 2011, and remained in double digits through the first few months of 2012, the highest cost-of-living increase in Asia.
Since then, Việt Nam’s authorities have won praise for policies that helped bring inflation back to single digits.
Keeping it under control, authorities say, remains a top priority for 2013.
But in the Year of the Snake seems to be giving a troubling hiss.
My friend Vinh complained on Facebook about a bowl of phở gà (phở with chicken) at a favorite eatery jumping from 40,000 dong to 50,000 – double the street value, you might say.
I noticed when my favorite street venue recently added 5,000 đồng to the price of a southern dish, and how the long baguettes at French bakery hit the 20,000 dong threshold.
Even well-heeled expats are doing double takes at their electricity bills for their villas, due to the higher rates and the cold winter.
Instead of subsidizing users with below-market rates, Việt Nam’s state-run electricity monopoly must charge enough to produce profits to attract investors to grow the system that literally powers economic growth.)
Inflation isn’t really a big problem for most expats I know, though it certainly affects some.
But for the typical Vietnamese, of course, it can be a huge problem.
Việt Nam may have barely climbed into “middle income” status as measured by the World Bank, and the new Starbucks in Hồ Chí Minh City seems to be doing strong business among Vietnamese who like a little status with their latte.
But millions of Vietnamese families basically operate at subsistence level – not paycheck-to-paycheck, as Americans put it, but practically day-to-day and hand-to-mouth.
Việt Nam’s economic growth has enabled some of its citizens to cruise around Hà Nội in Rolls Royces and Bentleys, but prosperity has not trickled down very far or spread broadly.
That is why controlling inflation is so important.
For the past two years, the standard of living for most Vietnamese has moved sideways, or down.
When the poor skip meals, the rich don’t hear the stomachs rumble.
Readers of Việt Nam’s English-language business press may have noticed some tremulous signals.
On the financial front, Việt Nam’s banking system is burdened with billions of dollars worth of bad debts, much of it created by the overbuilt, paralyzed real estate market which produced thousands of homes priced too high for the market and still searching for buyers.
Meanwhile, on the trade front, the leader of a certain ministry will call for a 10 per cent increase in exports from a certain sector – while business leaders in those sectors forecast flat performance at best.
Investments by foreign companies, the source of hundreds of thousands of jobs, are declining, and so is official development aid.
Some provinces continue to bet heavily on tourist resorts and casinos, but many of those plans never materialize.
Meanwhile, authorities are counting on complex private-public partnerships involving foreign investors to upgrade the infrastructure with new highways, bridges, airports and seaports.
One economic category that has ticked upward is remittances, which were estimated to reach $11 billion in 2012, up 20 per cent from the previous year.
The money sent home is of course welcome and helpful – but actually a symptom of Việt Nam’s economic problems, hardly a solution.
Can inflation remain tamed in 2013?
Some economists who praised the government’s efforts in 2012 also suggested that they also got lucky as strong food production helped keep grocery prices in check.
A bumper rice crop boosted the exports and held down the cost of meals at home.
The Year of the Snake, I’ve heard, is supposed to bring luck.
But what if it’s bad luck?
And yet, from this expat’s perspective, so much of Việt Nam remains a bargain that I sometimes feel guilty when I haggle.
On a boat on Huế’s Perfume River during our Tết visit, I picked up two nice silk shirts for about $7.50 each instead of $10.
Now, had this expat been alone, he might have just paid the full price, or negotiated smaller discount.
But there was a Việt Kiều wife and in-laws to consider:
He had to show them that he isn’t a chump.