Pham Binh Minh, whose father fought to force the U.S. out of Vietnam, is working fervently to elevate the interest and involvement of his country’s former enemy.

Vietnam wants a U.S. presence for economic reasons and as a balance to China, the regional superpower. Minh is the new foreign minister; his father was part of Ho Chi Minh’s Communist regime during the bitter conflict of the 1960s and 1970s; later, he was foreign minister when Vietnam clashed with China.

“One cannot imagine how fast the relationship between the United States and Vietnam has developed,” Minh, 52, says in an interview in Hanoi. “After 16 years of normalization, we’ve come to the stage where we’ve developed the relationship in nearly all aspects.”

While the U.S. hasn’t fully erased the pain of that war, the Vietnamese, who suffered far more, embrace their old adversary.

Economic ties between the nations are growing; the U.S. is the largest importer of Vietnamese goods. There are regular military contacts, and this month the two countries signed the first defense pact regarding military medicine. Last year, Vietnamese officers observed a U.S. military operation aboard a Navy destroyer, the USS John S. McCain, named after two admirals, the father and grandfather of Republican Senator John McCain of Arizona, who was a prisoner of war in Hanoi for six years.

Strategic Relationship

Now, the foreign minister says, the two countries are discussing upgrading their strategic relationship to “a new level.” That, he declares, would be “good for the stability of the region,” in accord with Vietnam’s “multilateral” approach.

None of this, the top Vietnamese diplomat insists, is intended to counter China. Still, talk of multilateralism and encouraging the U.S. role in the stability of the region isn’t appreciated by the Beijing regime.

Vietnam has a long history of conflict with China; the most recent outbreak was in 1979, when it turned back a cross-border incursion. The Vietnamese know China is a superpower that isn’t going away and prefer to have good relations with the big guy next door.

Nevertheless, there are tensions, particularly over territory in the South China Sea. Recently, there have been public protests in Vietnam against China, though the Hanoi government wants these to stop, fearing that nationalistic fervor could spiral out of control.

Washington’s Commitment

Common interests aside, the relationship with the U.S. is complicated. Vietnam isn’t sure America is committed to Asia for the long run, and officials privately complain that the region is a low priority for Washington. In a one-hour interview with Charlie Rose that was broadcast July 21, President Barack Obama’s national security adviser, Tom Donilon, spoke at length about China, but never mentioned Vietnam.

Minh says he’d like “more consistency” in U.S. policy, which should “pay more attention” to Southeast Asia. More troubling is the continuing friction over Vietnam’s human and political rights policies. Progress has been made, especially in the area of religious freedom: Jim Webb, a U.S. senator from Virginia and a Vietnam veteran, noted during a visit to Hanoi the other day that when he first attended a Catholic service in Vietnam 20 years ago there were a handful of worshipers; a few years ago, there were 2,000 people at a Christmas Mass he attended. Still, a few dozen dissidents have been jailed over the past several years, and crackdowns on the press are routine.

Chinese Colossus

The record is better than China’s. The realpolitik, however, is that with about 90 million people, the world’s 14th-largest population, and a gross domestic product of $102 billion, Vietnam is treated differently than the colossus China.

Yet U.S. policy makers, who worry about the aggressiveness of an increasingly confident China, want deeper alliances with Vietnam. They look to a younger generation epitomized by Foreign Minister Minh, who remembers that as a teenager he would dash “to the shelters when the bombs were dropped.” As an adult, he received a graduate degree at Tufts University’s Fletcher School of Law and Diplomacy and spent several years at the United Nations in New York and at the Vietnamese Embassy in Washington.

The depth of the association in the years ahead depends on the evolution of Vietnam’s economic, legal and political system. There have been striking gains since the Communists opened the system to private enterprise more than two decades ago. Per capita income is about $1,200, almost 10 times more than a quarter century ago; the country has fully joined the global economic community. American foreign investment is $10 billion, small but growing rapidly. Companies such as Intel Corp. and Chevron Corp. are making major investments.

Cheap Labor

The economy, however, is still driven largely by cheap labor. The Communist Party bureaucracy stifles the entrepreneurial spirit. Corruption is rampant. Though he claims that it’s a “top priority,” of the regime, Minh admits that reducing corruption “is hard.”

Paradoxes persist: Internet use per capita is among the highest in the region and the illiteracy rate is relatively low; yet the educational system is inferior.

One of the few jewels is the small Ho Chi Minh City-based public-policy center affiliated with Harvard University’s John F. Kennedy School of Government. This is part of Harvard’s Vietnam program, directed by Tom Vallely, a veteran who has spent much of his life since the war trying to improve U.S.-Vietnam relations.

Asian Tigers

A few years ago, the center published a study on the challenges facing Vietnam. It concluded that the hallmarks of the successful East Asian economies of South Korea, Singapore and Taiwan -- transparency, little corruption, first-class health and education systems and a viable legal structure -- all are lacking in Vietnam.

“Countries that compete on the basis of cheap labor cannot, by definition, move beyond lower-income status,” it said.

Younger leaders such as the foreign minister face daunting challenges. Among the biggest: walking the delicate line between maintaining decent relations with the superpower next door and strengthening ties with Washington; and dramatically curbing corruption and reforming an educational system the Harvard study described as abysmal.

That raises an interesting possibility, one the foreign minister says he would welcome: Harvard, the institution that produced many of the architects of the ill-fated Vietnam War, could take the lead in creating a first-class Vietnamese university.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Albert Hunt in Washington at ahunt1@bloomberg.net

To contact the editor responsible for this story: Max Berley at mberley@bloomberg.net.