Getting Financial Advantages for the U.S. from Vietnam

At every stage, one should expect that the U.S. advisers will try to obtain financial advantages for the U.S. For example, let us examine the "Recommendations in Key Areas" of the U.S.-Vietnam Education Task Force Final Report that was released in September 2009. At the end of section I.C we read:

Allow non-profit foreign colleges and universities to register as non-profit educational institutions rather than as businesses subject to taxation.

Let's think a little about this demand that the American representatives are making of the Vietnamese government. In the U.S. colleges and universities, including private ones, are given tax-exempt status as a form of government subsidy. The technical term for that status is "non-profit" -- even though in much of their operations these institutions function like businesses and, in particular, charge very high tuition. When these colleges and universities open branch campuses in Vietnam, they usually expect to make a profit from the money paid them by the relatively affluent Vietnamese families who send their children there. (As I discussed elsewhere, the major appeal of these branch campuses is that, in the first place, they accept students who were unsuccessful in the highly selective admissions competition for the government universities; and, in the second place, a degree from any American college, no matter how undistinguished, is accorded excessive prestige in Vietnam. Some people even regard an Associate Degree from Houston Community College as more worthy of respect than a 4-year degree from the Vietnam National University.)

Why on earth should the Vietnamese government grant tax-exempt status to these profit-making branch campuses of American colleges and universities? To do so would be a form of subsidy of American institutions by Vietnam, that is, a type of foreign aid from Vietnam to the U.S. The U.S. advisers seem to have no shame about demanding that the Vietnamese government do this.

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