What value Vietnam’s heritage? An economist ponders

By Martin Rama   August 20, 2018 | 07:00 pm PT
Typically very narrow minded in judging the value of intangible assets, an economist makes a value judgment.
Martin Rama, Chief Economist for South Asia at the World Bank

Martin Rama, Chief Economist for South Asia at the World Bank

Last month, the urban authorities of HCMC opened a consultation on whether Thuong Tho Palace should be included in the city’s heritage list.

This decision was an important milestone in the history of urban development policy in Vietnam. But it also raised difficult questions on how to think about preservation going forward.

The debate about the demolition of Thuong Tho Palace was a historic turning point for two reasons. First, it showed that many people in Vietnam were concerned about the possible disappearance of this magnificent building. Experts wrote newspaper articles about its architectural features, citizens uploaded posts in social media expressing their dismay about the possible loss, signed petitions calling for the palace’s preservation, and so on.

At a time when the drive for prosperity is so understandably important for the Vietnamese people, there was a risk that nobody would care about protecting the heritage of the city. Old bricks, plaster and stuccos could be easily dismissed as a thing of the past, or even as a scar from colonialist oppression. But the popular response showed that the Vietnamese care about the history and the identity of their cities.

In advanced economies, this kind of urban consciousness arose much later in the development process, at a time when the countries were already rich. Since Vietnam is not a rich country yet, it is heartening that the public got so involved in trying to save the Thuong Tho Palace. The 130-year-old building was used for the management and operations of all civil and judicial activities during colonial times and it is facing demolition to make way for the city's admin center expansion.

The decision by the urban authorities of HCMC to stop the palace’s demolition was also important for another reason. It showed a government that listens to the people, and reacts positively to its concerns. Newspaper articles, social media postings and signed petitions could have been easily ignored.

Instead, the local authorities took action and opened a consultation. This is the way urban development policy should be conducted and Vietnam can feel proud of it.

At the same time, the decision to take urban heritage seriously raises a difficult question, namely: what is heritage? There is no easy answer to this question. We usually check whether a site is truly outstanding from an architectural or historic point of view, but this is a narrow definition that falls frustratingly short.

To be part of the UNESCO World Heritage List, a cultural site needs to meet at least one of six criteria. Simplifying a bit, the site should: (i) represent a masterpiece of human creative genius, (ii) be important in terms of architecture, technology, town-planning or landscape design, (iii) be a unique testimony of a cultural tradition, (iv) be an outstanding example of a type of building, (v) be an outstanding example of a human settlement, or (vi) be directly associated with significant events.

Countries and cities use less restrictive criteria than the UNESCO World Heritage List. And I have little doubt that Thuong Tho Palace will qualify as being part of HCMC’s heritage list, as it is just one of a few dozen outstanding colonial buildings still standing in the city.

Thuong Tho Palace, the old French government building at 59-61 Ly Tu Trong in Saigon, is earmarked for destruction under a plan to build a new city administration center. Photo by Tim Doling

Thuong Tho Palace, the old French government building at 59-61 Ly Tu Trong in Saigon, is earmarked for destruction under a plan to build a new city administration center. Photo by Tim Doling

But as an economist who often works on urban issues I cannot be satisfied with the standard definitions of heritage.

Economists are narrow-minded people. They care about value, of the sort that can be measured in dollars or in dong. And they believe that the government’s objective should be to maximize the value of cities, because that ensures higher wellbeing for the country. From that point of view, what really matters is whether preservation will make citizens better off. This can happen in two different ways.

First, heritage can have direct economic value, similar to the value we derive from consuming goods. For example, many Vietnamese are willing to spend money (sometimes a lot of money!) to travel abroad and enjoy the charm and vibrancy of great foreign cities. Therefore, one could expect them to also be willing to sacrifice some resources to ensure that their own cities are charming and vibrant, and that they feel well even when they do not travel abroad.

Take Hanoi for example. Its ancient trees, its adorable French villas, the vitality of its sidewalk food stalls, or even the social life of its KTTs (residential complex built in the 1990s), all have direct economic value. Hanoians would experience a loss in wellbeing if these key references in their personal histories were to disappear. But ancient trees, ordinary French villas, sidewalk food stalls and the social life of KTTs would never qualify for a standard heritage list.

Heritage can also have an indirect economic value. The vibrancy of a city critically depends on the talent it attracts. Inventors who are at the forefront of research, entrepreneurs who develop new products and management techniques, artists who create value with their works, communicators who enrich the exchange of ideas... these are the people who make a city great. And rich. But these people tend to be sophisticated and they can choose where to live.

Distinct heritage increases the character of a city and helps attract top talent. So even if citizens did not care at all about trees and villas, or about sidewalk food and KTTs, it would be in their interest to protect these intangible forms of heritage.

Hanoi and HCMC have more character than most other big cities in East Asia. Their heritage is an asset in the global competition for talent. Losing this intangible asset would be as damaging for Vietnam as losing a key brand would be for a firm.

In sum, for a narrow-minded economist like me the question is not whether the heritage of Vietnam’s urban centers should be preserved. The answer is a resounding “yes.” The question is rather how to decide what exactly is worth preserving, how to assess how much money it is worth sacrificing to preservation, and how to use this money most efficiently.

Some of the answers to these questions are technical. For example, by now there are tested techniques to determine how much the value of a property increases when heritage around it is well preserved. But technical answers are only part of the solution, as there is still quite a lot of uncertainty and judgment involved.

And this is why consultation is so important in supporting good urban development policies. And this is why an economist like me is thrilled that this is taking place.

*Martin Rama is Chief Economist for South Asia at the World Bank and Project Director at the Center for Sustainable Urban Development, under the Vietnamese Academy of Social Sciences. The views expressed are his own.

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